Families First Coronavirus Response Act

On March 19, 2020, new legislation was signed into law that provides for significant government funding of a variety of government programs concerning public health, public nutrition, child nutrition, family leave, paid sick leave, expanded unemployment insurance, and more. The new legislation is a strong and swift bipartisan effort that when presented to the President, was promptly signed into law.

Several provisions of the Act concern both businesses and employees, but in particular the Emergency Family Medical Leave Expansion Act and the Emergency Paid Sick Leave Act are both impactful to and for many. Regulatory guidance is expected soon (but it does not yet exist) and that guidance may assist in implementing the law and further explain some exemptions going forward. Below are the key and primary provisions important to you in following the new laws.

Emergency Family Medical Leave Expansion Act

This new law provides for family leave when an employee is unable to work (or telework) because the employee has to care for a minor child if the child’s school or place of care has been closed, or if the childcare provider is unavailable due to the current Public Health Emergency related to COVID-19. This new Act will apply from the effective date of the law, that is April 2, 2020, through and including December 31, 2020.

As with other leave under the traditional Family Medical Leave Act (FMLA), eligible employees may take up to 12-weeks of leave for this newly identified purpose; however, leave under this new purpose is a combination of unpaid and paid leave as outlined below.

Here are key components:

• Eligible Employees
  • Employees who have been employed 30 or more calendar days
  • Employers of certain healthcare providers and emergency responders may elect to exclude these types of employees from the emergency family leave provisions

• Covered Employers
  • Employers with fewer than 500 employees.
  • The Department of labor may exempt private sector businesses with fewer than 50 employees when the law would “jeopardize the viability of the business as a going concern”.
• Combination of Unpaid and Paid Leave
  • Unpaid Leave
    • The first 10 days of leave may be unpaid leave
    • Employee’s option – the employee may substitute paid leave (accrued vacation, personal leave, medical, or sick leave) for the unpaid time.
    • Employer may not require an employee to substitute accrued paid leave (accrued vacation, personal leave, medical, or sick) for the unpaid period.
  • Paid Leave
    • After the initial 10 days of unpaid leave (or for which the employee elects to substitute accrued paid leave) –
      • Employer shall pay not less than 2/3 regular rate of pay; and
      • The number of hours the employee would normally be scheduled to work (or as calculated under the Act)
    • Paid leave is capped at $200 per day or $10,000 in the aggregate
    • If an employee has a varying schedule – a 6-month average (or reasonable expectation at the time of hiring) is used.
• Notice
  • Employee shall provide notice of the need for leave as soon as practicable
• Job Restoration
  • Generally, the employees shall be restored to the same or equivalent position following the family leave.
  • Smaller businesses (less than 25 employees) may be excluded from the job restoration requirement if certain conditions apply (such as the position no longer exists due to economic conditions or other changes in operations – caused by the public health emergency). Reasonable efforts to restore employees to an equivalent position will be nonetheless required during a “contact period” requirement.

Emergency Paid Sick Leave Act

Similarly, the new Emergency Paid Sick Leave Act applies to private-sector employers with fewer than 500 employees, in addition to public agencies of 1 or more employees. The law will require covered employers to provide emergency paid sick leave to employees who are unable to work (or telework) due to certain specified needs arising in connection with the current Public Health Emergency.

Key components of the new law are briefly outlined below.

• Paid Sick Leave – Qualifying Reasons
  • Employees will be entitled to paid sick leave if they are unable to work (or telework) due to any one or more of the following reasons:
    • (1) Employee is subject to Federal, state, or local quarantine or isolation order related to COVID-19;
    • (2) Employee is advised by a Health Care Provider to self-quarantine due to concerns related to COVID-19;
    • (3) Employee has symptoms of COVID-19 and is seeking a medical diagnosis;
    • (4) Employee is caring for an individual subject to direction in (1) or (2) above.
    • (5) Employee is caring for the employee’s son or daughter if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions; or
    • (6) Employee is experiencing other substantially similar conditions specified by the Secretary of Health and Human Services in consultation with Secretary of the Treasury and the Secretary of Labor.
• Paid Leave and Duration of Paid Leave
  • Paid sick leave is available to all employees, without regard to tenure. Both full-time and part-time employees are entitled to paid according to the amounts and calculations below.
    • Full-time employees
      • Shall be paid 80-hours of paid sick leave at the rates below
    • Part-time employees
      • Shall be paid a two-week average of hours worked at the rates below (if work hours vary, calculations are provided for determining the “average”).
    • How Much to Pay
      • Employees are to be paid the greater of their regular rate of pay, or the federal, state, or local minimum wage rate. However, the type of sick leave, (1) – (6) above, determines the pay rate to which they are entitled.
        • Sick leave for the Employee, under (1) – (3) above, is paid at their regular rate of pay or applicable minimum wage, whichever is greater; and is capped at $511 per day or $5,110 in the aggregate.
        • Sick leave for an Employee caring for others under (4) – (6) above, is paid at a rate not less than 2/3 their regular rate of pay; and is capped at $200 per day or $2,000 in the aggregate.
• Notice Requirement
  • Employers will be required to Post and keep posted Notice of the Act; and a model Notice shall be prepared by the Secretary of Labor within 7-days.
• Prohibitions
  • Employers may not require the affected employee to assist with finding a replacement employee to cover the employee’s sick leave.
  • Employers may not require the employee to use other accrued paid leave first.
  • Employers may not discriminate, discipline or discharge an employee for exercising a right to emergency paid sick leave.
• Regulations
  • The Department of Labor is authorized to issue regulations that may exempt small businesses (with fewer than 50 employees) when “the requirements would jeopardize the viability of the business as a going concern”, to provide interpretive guidance, and to ensure consistency between this Act and the new Emergency Family Medical Leave Expansion Act.

Employer Tax Credits

Finally, there are also refundable tax credits that will be applied against the employer portion of quarterly payroll tax obligations; the credit is intended to account for wages paid by employers to employees for time taken under the newly expanded family leave and sick leave provisions. Particulars should be discussed with your tax professional.

Legal assistance as you prepare for and implement these new laws is recommended.