On March 18, 2020, President Donald Trump signed the bipartisan Families First Coronavirus Response Act (H.R. 6201) into law. The Act comes on the tail of the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074), which provided funding to federal and state agencies to address the COVID-19 pandemic. The Act will have widespread effects on employers in the United States. Our team has prepared the following summary of the Act.
Two provisions in the Act give paid leave to employees who have to miss work because of the COVID-19 outbreak: these are an emergency expansion of the Family Medical Leave Act (FMLA) and a new federal paid sick leave law. Note the law will go into effect April 2, 2020 and expires December 31, 2020.
FMLA Expansion
FMLA has been significantly changed and expanded under the Act. Relevant FMLA provisions now apply to all employers with fewer than 500 employees. Employees will be FMLA eligible if they have worked for the employer for at least 30 days prior to the designated leave. (Note the Act includes language allowing the Secretary of Labor to exclude healthcare providers and emergency responders from the definition of employees who are allowed to take FMLA leave and exempts small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business). This FMLA expansion means that any eligible employee may take up to 12 weeks of protected leave to care for their child if their school or place of care is closed or if their childcare provider is unavailable.
The first 10 days of leave may be unpaid (although note the mandatory sick leave provisions below), with the remainder paid at two-thirds the employee’s regular rate for the remainder of the time period – capped at $200 per day and $10,000 in the aggregate. Employers with 25 or more employees will have the same obligation as under traditional FMLA to return any employee who has taken emergency FMLA leave to the same or equivalent position upon the return to work. However, employers with fewer than 25 employees are generally excluded from this requirement if jobs no longer exist and if the employer makes reasonable attempts to return the employee to an equivalent position for up to a year following the employee’s leave.
Employers will receive reimbursement for these payments in the form of payroll tax abatement.
Emergency Paid Sick Leave Act
This portion of the law allows an eligible employee to take paid sick leave in the event the employee is subject to a quarantine or isolation order or advised to quarantine by a health care provider (and cannot work); is displaying symptoms of COVID-19 and seeking medical diagnosis; is caring for someone in quarantine, subject to an isolation order, or has been advised to self-quarantine by a health care provider; is caring for a child if that child’s school or place of care is closed or childcare provider isn’t available; and in related circumstances defined by the Department of Health and Human Services. This is not limited just to family members.
Employers with fewer than 500 employees must provide 80 hours of paid sick leave at the employee’s regular rate, subject to a cap. (There is an exception for healthcare providers and emergency responders). Sick leave pay is capped at $511 per day up to $5,110 total per employee for their own use and $200 per day up to $2,000 total to care for others. Employees with irregular schedules are paid based on the average number of hours worked in the six months prior to the leave, with other obligations for shorter service periods.
This paid sick leave will not carry over from year to year and may be in addition to any paid sick leave currently provided by employers.
Employees may use this time prior to the paid FMLA time described above; use of this time will not extend the FMLA time available.
Sick pay tendered to employees will also be offset by a 1:1 reduction in payroll tax obligations.
