The H.R. 6201 bill passed in the House on March 14, and goes to the Senate next.
It is expected to be passed there and signed by President Trump in short order.
EXECUTIVE SUMMARY
- The bill applies only to employers who employ less than 500 employees.
- The bill mandates that those employers provide paid sick leave for employees affected by the coronavirus. First, two weeks (80 hours) of paid sick time at the employee’s full regular rate of pay (reduced to 2/3 pay if the leave is due to care for a sick or isolated family member or a child whose school is closed), Second, ten additional weeks of FMLA leave paid at the 2/3rds the regular rate of pay.
- The bill provides payroll tax credits to offset the costs of providing these paid leaves.
PRACTICAL IMPLICATIONS
For employers who employ less than 500 employees, this can impose significant monetary burdens. Because the credit is only realized when the payroll tax is paid, there may be cash flow concerns for certain employers. Regardless, such employers must adjust their policies to comply, including communicating the specific of the new policies to your employees.
For employers who employ more than 500 employees, this legislation just does not apply.
The Emergency Paid Sick Leave Act section of this legislation requires employers who employ less than 500 employees to provide two weeks of paid sick leave (80 hours or the amount of hours a part-time employee works over a two week period). This emergency paid sick leave is to be available for use immediately, no matter how long the employee has been employed. It does not, however, apply retroactively. It must be made available in addition to any paid sick leave an employer might already provide on its own or as required by local or state law, and the employer cannot require the employee to use other paid leave first. This emergency paid sick leave does not create a requirement to payout employees for the unused emergency paid sick leave.
This emergency paid sick leave may be used for any of the following purposes:
(1) to self-isolate because the employee is diagnosed with coronavirus;
(2) to obtain a medical diagnosis or care if such employee is experiencing symptoms of coronavirus;
(3) to comply with a recommendation by a public official or a health care provider because the physical presence of the employee on the job would jeopardize the health of others because of exposure to that employee;
(4) to care with a family member who is self-isolated based on a diagnosis, is experiencing symptoms and needs medical care, or has recommended or ordered stay home by a health care provider or public official;
(5) to care for a child if the school or place of care is closed or child care provider is unavailable due to coronavirus.
There are no certification requirements, but an employer may require an employee to follow reasonable notice procedures following the first workday (or portion thereof) an employee takes the emergency paid sick leave. The emergency paid sick leave is to be provided at the employee’s regular rate of pay unless it is used for the care of a family member or to care for a child whose school or place of care is closed; in those circumstances, it is paid at 2/3rds the employee’s regular rate of pay.
The Emergency Family and Medical Leave Expansion Act section of this legislation adds “qualifying need related to a public health emergency” as a ground for FMLA leave. But, unlike traditional FMLA (which is unpaid), leaves under this exception will be paid after the first two weeks.
Practically, a qualifying employee will utilize the two weeks (80 hours) of paid sick leave provided by the Emergency Paid Sick Leave Act. For the remainder of the twelve workweek period, the employer must provide paid leave at 2/3rds the employee’s regular rate of pay, as determined by the FLSA. In the case that an employee works variable hours, the regular of pay is determined by either the hours the employee was expected to work or the average week based on a six month period.
A “qualifying need related to a public health emergency” includes each of the following:
(1) leave to comply with recommendation of a health authority or a health care provider because the employee’s physical presence would jeopardize others by exposing them to coronavirus or the employee is unable to perform the functions of their job and comply with the recommendation or order;
(2) to care for such a person; or
(3) to care for a son or daughter under the age of 18 if the school or daycare is closed or the childcare provider unavailable due to coronavirus.
In any case where the necessity of this leave is reasonably foreseeable, an employee shall provide the employer with notice of that leave. There are, however, no certification provisions.
This legislation does provide for tax credits to offset its anticipated costs. With respect to sick leave required by the Emergency Paid Sick Leave Act and the paid leave required under the paid leave mandate of the amended FMLA, employers are allowed a credit against the employer portion of Social Security taxes equal to 100% of the qualified sick leave wages paid during each calendar quarter but subject to caps.
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