EDITOR’S NOTE (UPDATED MARCH 17th):
Late March 16, 2020, the U.S. House of Representatives passed a technical amendment to the Families First Coronavirus Response Act. The technical amendment revised certain available benefits, including reducing the circumstances for when paid leave is available under the Family & Medical Leave Act. A copy of the most recent bill is available here. McAfee & Taft continues to monitor this fluid legislative situation as it develops. The U.S. Senate is expected to vote on the Act today, and we will provide an update once the final bill is passed.
The number of confirmed cases of COVID-19 continue to increase in the United States. On Saturday, March 14, 2020, to reduce the impact of this illness on individuals and businesses alike, the U.S. House of Representatives passed the Families First Coronavirus Response Act. The Act is an emergency spending bill that provides paid employment leave for employees affected by COVID-19, amends the Family & Medical Leave Act to provide coverage for absences related to COVID-19, allocates additional funding for emergency unemployment insurance, and requires free coronavirus screening tests. The Act applies to all public employers regardless of size and to private employers with less than 500 employees. The U.S. Senate is expected to vote on the Act early this week.
Paid leave
The paid leave required by the Act is separate and above any existing sick leave entitlements. The Act requires that covered employers must provide all employees who are affected by COVID-19 up to 80 hours of paid sick time. Paid sick leave is available under the following circumstances: (1) To self-isolate because the employee is diagnosed with coronavirus; (2) To obtain a medical diagnosis or care if the employee is experiencing the symptoms of coronavirus; (3) To comply with a recommendation or order by a public official with jurisdiction or a health care provider on the basis that the physical presence of the employee on the job would jeopardize the health of others because of the exposure of the employee to coronavirus or the exhibition of symptoms of coronavirus by the employee; (4) To care for or assist a family member of the employee who is self-isolating because such family member has been diagnosed with coronavirus; or is experiencing symptoms of coronavirus and needs to obtain medical diagnosis or care; and (5) To care for the child of such employee if the school or place of care has been closed, or the child care provider of such child is unavailable, due to coronavirus.
For absences related to the employee’s own exposure to coronavirus, employers must pay the paid sick time at 100% of the employee’s regular wages. For absences related to the employee’s family member or school and/or childcare closings, employers must pay the paid sick time at two-thirds the employee’s regular wages. Part-time employees are entitled to the number of paid sick time hours equal to the average number of hours they work, over a two-week period. Employers also are required to post notices explaining an employee’s right to paid sick leave. Employers cannot compel employees to utilize other paid leave (such as existing sick leave, vacation leave, or paid time off) before using the paid sick time granted by the Act. Additionally, employers cannot require employees to find a replacement to cover time taken pursuant to the Act. Further, the Act contains certain employment protections for employees who take paid leave. Employers shall not take any disciplinary action or discriminate manner against employees who takes leave under the Act. The right to paid sick leave related to COVID-19 expires December 31, 2020.
Family Medical Leave Act
Typically, employees are not eligible for FMLA leave until they have worked for an employer for at least 12 months and 1,250 hours. For absences related to COVID-19, employees must only be employed for 30 consecutive days, and there are no hours worked requirement. Expanded FMLA leave is available for the same reasons as discussed above for paid sick leave. Employees are entitled to 12 weeks of job-protected leave for absences related to COVID-19. The first 14 days are unpaid; however, employees would be able to utilize the paid sick leave discussed above. After the first 14 days, employees are eligible for paid leave at 2/3 their regular pay rate of pay. Employees may choose to use previously available sick leave, vacation leave, or paid time off; however, employers cannot require employees to utilize such leave. The Act exempts certain health care providers from the expanded coverage, and the right to expanded FMLA leave related to COVID-19 expires December 31, 2020.
Tax credits for the leave
Certain tax credits are available to help offset the cost of the paid leave requirements. While caps and limits do apply, employers can file for a refundable tax credit for paid sick or family leave. Employers can seek a full credit for an employee’s own sickness or self-isolation and a lesser credit when employees have taken time off work to care for a child after a school/daycare closure or an ill family member.
Penalties
Failing to allow employees to take paid sick leave under the Act will be deemed to be a violation of the Fair Labor Standards Act. If an employer willfully discriminates against or retaliates against an employee in violation of the Act, the employer will be deemed to have violated Section 15(a)(3) of the FLSA and will be subject to the penalties for lost wages, an equal amount in liquidated damages, attorneys’ fees, and costs.
The bottom line
The Families First Coronavirus Response Act is not yet a law; however, because the Act has support from the President and the Senate Majority Leader, it is extremely likely that some version of the Act will be enacted soon. Best practices for employers involving this fluid situation will continue to evolve as more information about the impact of coronavirus comes to light. The Act as currently drafted allows employers only 15 days to achieve full compliance with the paid leave obligations.
