President Trump signed into law the Families First Coronavirus Response Act (H.R. 6201) (FFCRA or Act) on Wednesday, March 18, 2020. As reported in prior alerts, the enacted federal legislation provides paid sick leave and paid family leave to employees working for private-sector employers with fewer than 500 employees or covered public agencies regardless of size. Employers will have 15 days from March 18, or until April 2, to implement paid leave and family paid leave under the Family and Medical Leave Act (FMLA) in accordance with the FFCRA, as detailed below.
Emergency Paid Sick Leave Act
Covered Employers. The Act only covers certain employers—private employers with fewer than 500 employees, and public agencies regardless of size. Covered employers also include successors in interest.
Covered Employees. The mandated sick leave is available for immediate use by all employees, full-time and part-time, regardless of how long the employee has worked for the employer.
Amount of Leave. Covered employers are required to provide full-time employees with 80 hours of emergency paid sick leave. Part-time employees are entitled to emergency paid sick leave at their regular rate of pay for the average number of hours that such employees work in a two-week period. Emergency paid sick time does not carryover from one year to the next; nor is it paid upon separation from employment.
Qualifying Reasons for Use. Employees who are unable to work or telework are eligible for emergency paid sick leave for the following reasons:
- To comply with a federal, state, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- To care for an individual who is subject to an order as described in (1) above or has been advised as described in (2) above;
- To care for the employee’s son or daughter if a school or place of care is closed, or the childcare provider is unavailable, due to COVID-19 precautions; or
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.
In addition, emergency paid sick leave is provided to care for any “individual” subject to a quarantine or isolation order or whose health care provider advised the individual to self-quarantine. Prior versions of H.R. 6201 had limited this provision to “family members.” With the change in the legislation, the broader definitions of “parent” and “child” that had appeared in the bill have been removed.
Calculation of Paid Leave. Paid sick leave is capped at $511 per day ($5,110 in the aggregate) for the uses described in 1, 2, and 3 above, which is to be paid at the employee’s full regular rate of pay. Paid sick leave for the uses described in 4, 5, and 6 above, is be capped at $200/day ($2,000 in the aggregate), which payment is limited to two-thirds of the employee’s regular rate of pay.
Employer Policies and Other Mandated Leave. The Act provides that it does not diminish an employee’s rights or benefits under state or local laws or an existing employer policy. An employee may first use emergency paid sick leave under the Act for qualifying reasons, and an employer may not require employees to use other paid leave provided by the employer before the employee uses emergency paid sick leave. These provisions seem to suggest that an employer’s existing leave policies do not count toward or reduce the 80-hour entitlement; however, in a press release issued by the House Ways and Means Committee with the passage of HR 6201 on March 16, 2020, the Committee specifically stated that “existing leave offered can count towards the 10 days”—creating confusion about whether the new leave entitlement adds to existing employer-sponsored leave entitlements.
Termination of Leave. The emergency paid sick leave under HR 6201 ceases on the employee’s next scheduled work shift immediately following the termination of the need for such leave for a qualifying COVID-19 reason.
Bargaining Units. The Act applies to bargaining unit employees and provides that it does not diminish any rights under a bargaining agreement. For employees in multiemployer bargaining units, the Act contains provisions for how the emergency paid sick time provisions will operate under multiemployer funds or plans.
Notice and Documentation. Once leave has commenced, an employer may require the employee to follow “reasonable” notice procedures of an employee’s need for leave in order to continue receiving emergency sick time. However, the Act does not require employees to provide medical or other verification documenting the need for leave.
Enforcement Provisions. The Act contains anti-discrimination and non-retaliation provisions. It also contains penalties for non-compliance, which is deemed a violation of the FLSA.
Regulations. The Secretary of Labor has authority to issue regulations for good cause: (1) excluding certain health care workers and emergency responders by allowing their employer to “opt out;” (2) to exempt small businesses with fewer than 50 employees if imposition of the paid sick leave requirements would jeopardize the viability of the business; and (3) “as necessary to carry out the purposes of this Act, including to ensure consistency between the [Emergency Paid Sick Leave Act and the FMLA Expansion Act],” as well as the tax credit provisions of the FFCRA.
Emergency FMLA Expansion Act
The FFCRA contains the “Emergency Family and Medical Leave Expansion Act,” amending the FMLA to create a new category of public health emergency leave related to COVID-19. This leave is partially paid.
Covered Employers. The Expansion Act covers private employers with fewer than 500 employees and public agencies regardless of size. The law grants the Secretary of Labor the authority to issue regulations to exclude certain health care providers and emergency responders as eligible employees under the Act. The Secretary of Labor also may exempt small businesses with fewer than 50 employee from the Act’s requirements if imposing such requirements would jeopardize the viability of the business. Significantly, health care providers or emergency responders may be excluded at their employer’s discretion.
Covered Employee. The leave benefit is available to any employee who has been employed for at least 30 calendar days.
Leave Usage. Public health emergency leave only applies to employees unable to work (or telework) due to a need for leave to care for the employee’s son or daughter under 18, if the son or daughter’s school or place of child care has been closed, or the child care provider is unavailable due to a public health emergency. This is a significantly narrowed reason to use the leave as compared to earlier versions of HR 6201. Public health emergency is defined to mean an emergency with respect to COVID-19 declared by Federal, State, or local authority.
Relationship to Paid Leave. The first 10 days of leave will be unpaid. Employees may elect, but are not required, to substitute any accrued vacation leave, personal leave, or medical or sick leave for unpaid leave, including emergency paid sick leave pursuant to the FFCRA.
Paid Leave Amount. After the first 10 days, eligible employees will be entitled to not less than two-thirds of their regular rate of pay for the number of hours that the employee would normally be scheduled to work, capped at $200/day ($10,000 in the aggregate). The FFCRA does not address whether employees are permitted to use other forms of accrued paid leave during the period they are receiving reduced pay for expanded FMLA leave. Presumably, this will be a matter of policy for employers to determine, including whether paid leave, if used to supplement the two-thirds rate, will be used in partial day (e.g., one-third) or full day increments.
Job Restoration. The job restoration rights are the same as under the FMLA today, except that employers of fewer than 25 employees may be excused from reinstating an FMLA user if certain conditions are met, including the fact that the position held by the employee when leave commenced no longer exists due to economic conditions or other changes in operations caused by the public health emergency.
Effective Dates
Both the emergency paid sick leave and expanded FMLA leave provisions take effect 15 days after the President signed the bill into law on March 18, making them effective on April 2. The provisions sunset on December 31, 2020.
Tax Credits
The FFCRA also contains provisions for employer tax credits to offset the cost of the new leave entitlements and continuing employee health care coverage during periods of leave. Refundable payroll tax credits are intended to cover the full cost of wages paid with an additional credit (uncapped) for employer contributions to health insurance premiums. As described by the House Ways and Means Committee in its press release, the tax credits are intended to “get money out the door quickly,” and are designed to reimburse employers as they make deposits. Employers also do not pay the employer side of payroll taxes on the mandated leave.
The FFCRA also contains tax credits for employers and self-employed individuals (described in more detail in our alert here) who pay emergency sick leave and expanded FMLA leave under the FFCRA. Likewise, employees will not have payroll taxes withheld from such emergency sick leave. As described by the House Ways and Means Committee, the tax credit provisions are intended to “get money out the door quickly.”
Employer Preparedness
Employers should prepare emergency leave policies to address COVID-19 related absences. In addition, employers should monitor state and local activity, as some jurisdictions are adopting or expanding mandated leave entitlements for workers to cover COVID-19 related circumstances.
