In response to the coronavirus pandemic sweeping across the nation, the U.S. House of Representatives has passed the “Families First Coronavirus Response Act” (H.R. 6201). The bill is essentially a coronavirus financial aid package and contains several provisions that will significantly impact employers. The bill is headed to the Senate and may undergo additional amendments and/or revisions, but it is expected to pass and become law very soon as it has President Trump’s support.

In its current form, the bill applies only to employers with fewer than 500 employees. An employer’s obligations become effective 15 days from the date of enactment and automatically expire on December 31, 2020. Here is a summary of select provisions of the bill that entitle qualified employees to job-protected paid sick leave. Rather than repeatedly referring to the bill’s “current form,” this post addresses what the House version provides and assumes it will be enacted as it currently exists.

Family & Medical Leave Act Expansion

• Twelve weeks of job-protected paid Family and Medical Leave Act (FMLA) leave — of which the first 14 days may be unpaid — for employees of employers with fewer than 500 employees.
• The U.S. Secretary of Labor may develop regulations to exempt small businesses with fewer than 50 employees when the imposition of the new requirements would jeopardize the business as a going concern.
• Employees may use accrued personal or sick leave (including Emergency Paid Sick Leave under the new regulation outlined below) during the first 14 days, but employers may not require employees to do so.
• To qualify for this leave benefit, an employee must have been working for at least 30 calendar days. There is no minimum number of hours worked required.
• Among other uses, employees may use the leave to respond to quarantine requirements or recommendations, to care for family members who are responding to quarantine requirements or recommendations, and to care for a child whose school has been closed as a result of the COVID-19 pandemic. The amendment appears to leave open whether a work from home arrangement would remove the obligations to provide leave.
• The first 14 days are generally unpaid (but see the Emergency Paid Sick Leave requirement of two weeks of paid sick leave below). After the first 14 days, employers must compensate employees in an amount that is not less than two-thirds of the employee’s regular rate of pay for the remaining 10 weeks. These pay requirements apply to only the COVID-19-related leave reasons listed above.
• Restoration to position:
  • Employers with 25 or more employees must return employees to the same or substantially equivalent position under existing FMLA rules.
  • Employers with fewer than 25 employees are not required to return the employee to work if:
    • The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a public health emergency during the period of leave.
    • The employer makes a reasonable effort to restore the employee to a position equivalent to the position the employee held when leave commenced with equivalent benefits, pay and other terms and conditions of employment.
    • If the reasonable efforts of the employer fail, the employer makes reasonable efforts to contact the employee if an equivalent position described above becomes available. This “contact period” remains in effect for a one-year period beginning on the earlier of: (a) the date on which the qualifying need related to a public health emergency concludes; or (b) the date that is 12 weeks after the date on which the employee’s leave commences.
• The provisions will go into effect 15 days after the date of enactment and expire on December 31, 2020.

Emergency Paid Sick Leave

• Employers with fewer than 500 employees and government employers will be required to provide full-time employees with two weeks (80 hours) of paid sick leave for specific circumstances related to COVID-19 (e.g., self-isolating, doctors’ visits, etc.).
• Part-time employees are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a two-week period.
• Immediate use: Paid sick time is available for immediate use regardless of length of employment.
• Rate of pay:
  • For absences related to the employee’s own condition, the employee receives the greater of the employee’s regular rate of pay or the applicable minimum wage.
  • For absences to care for others, the employee receives the greater of two-thirds of the employee’s regular rate or the applicable minimum wage.
• Employers will be required to post a notice informing employees of their rights to leave. The DOL will be creating a required posting within seven days of the enactment of the new law.
• As currently drafted, the bill expressly provides that it does not preempt existing state or local paid sick leave entitlements. Also, this paid sick time is in addition to time available under an employer’s existing policies.
• The provisions will go into effect 15 days after the date of enactment and expire on December 31, 2020.
• A violation of the law is a minimum wage violation under the FLSA. The penalties include lost wages, an equivalent amount as liquidated damages, and attorneys’ fees and costs. Intentional violations may result in up to a $10,000 fine and, for repeat offenders, up to six months in prison after a prior conviction.

The Senate will take up the bill this week and may make modifications. However, the bill is expected to become law shortly thereafter. Employers will receive a refundable tax credit against the employer share of Social Security taxes equal to 100% of qualified paid sick leave wages paid for each calendar quarter under the Emergency Paid Sick Leave Act or the FMLA Expansion.

It is important to note the proposed bill is not the final word on whether, when or how laws may change or how an employer’s obligations under these new regulations might change. There may be significant revisions to the current version of the bill or new regulations altogether, including new tax provisions, additional response measures, or new industry-specific relief provisions issued over the next several weeks.

We will continue to provide guidance and updates on the status of these emergency measures as they rapidly evolve over the coming weeks.