Updated: March 18, 2020
Since we issued an Alert on Monday, much has already changed with respect to the U.S. House of Representatives’ new Families First Coronavirus Response Act, H.R. 6201 (the “Act”). As a recap, in the wee morning hours of Saturday, March 14, 2020, the House of Representatives passed the Act, which included the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. On Monday, March 16, 2020, House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, and Treasury Secretary Steven Mnuchin negotiated certain “technical corrections” to the Act, which have resulted in meaningful changes to the paid leave requirements in the Act, as discussed in more detail below. The House and now the Senate have passed the revised version of the Act, which will now go to the President for signature.
The revised version of the Act narrows the proposed paid leave requirements as follows:
Changes to the Emergency Paid Sick Leave Provisions:
The Act requires that private employers with fewer than 500 employees (along with certain covered public employers) provide paid sick time to an employee who is unable to work (or telework) for any of the following reasons:
- the employee is subject to a federal, state, or local quarantine or isolation order related to coronavirus;
- the employee has been advised by a health care provider to self-quarantine because of coronavirus;
- the employee is experiencing symptoms of coronavirus and is seeking a medical diagnosis;
- the employee is caring for an individual subject or advised to quarantine or isolation;
- the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to coronavirus precautions; or
- the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
As with the previous version of the Act, all employees of covered employers are entitled to eighty hours of paid sick time (an amount that is pro-rated for part-time employees) that can be used before any amounts of paid time off that may otherwise be provided by the employer. The revised version of the Act, however, caps the amount that covered employers must pay, on a per individual basis, to $511 per day (or $5,111 in the aggregate) where leave is taken for one of the first three reasons above and $200 per day (or $2,000 in the aggregate) where leave is taken for the last three reasons above. Therefore, more expansive benefits under this portion of the Act are available if a person is sick, instead of caring for others who are sick or unable to go to school.
Changes to the Emergency Family and Medical Leave Act Provisions:
The Act requires that private employers with fewer than 500 employees (along with certain covered public employers) provide up to 12 weeks of FMLA leave for “a qualifying need related to a public health emergency.” This leave must be provided to all employees who have been employed for 30 days.
As opposed to the prior version of the Act – which provided for extended FMLA for a broad range of coronavirus-related reasons – the “qualifying need” has been limited to only those circumstances where an employee is unable to work due to the need to care for a minor child if the child’s care provider is unavailable or the child’s place of child care or school has been closed or is unavailable due to a public health emergency. Thus, following the first ten days of leave, the remaining ten weeks must be paid at two-thirds of the employee’s regular rate only under the child care trigger events, and not under the other eligibility criteria for paid sick leave mentioned above. For situations where the employee is sick because of a coronavirus-related event, other forms of available PTO or state-mandated leave would apply, as would “traditional” unpaid FMLA leave for that serious health condition. Therefore, the FMLA portions of the Act provide less generous benefits for persons who are actually sick (versus caring for others or for a child), the effective inverse of the Paid Sick Leave portions of the Act.
The second significant change to the Act is that the amount of paid leave is limited, on a per individual basis, to no more than $200 per day and $10,000 in the aggregate.
Furthermore, companies now can exclude employees from the paid sick leave who are health care providers or emergency responders.
In the early morning hours of March 14, 2020, the House of Representatives, with strong bipartisan support, passed the Families First Coronavirus Response Act, H.R. 6201 (the “Act”). In addition to providing for relief measures including free coronavirus testing, enhanced unemployment insurance, and increased food aid for those in need, the Act includes the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, both of which provide for groundbreaking mandatory paid leave applicable to (certain) private employers under federal law.
General Provisions of the Act:
The Act goes into effect fifteen (15) days after it is enacted into law, which is expected to occur early this week when it heads to the Senate, as only forty (40) Republicans voted against the Act in the House, and the Trump Administration has voiced its support for the legislation. The Act has a “sunset” date of December 31, 2020, meaning that it will only be in effect for the rest of this year absent further legislative action (the likelihood of which could depend on the status of the pandemic by the late fall of this year). Although the current version of the Act may be modified in conference after the Act goes to the Senate for consideration, it is expected to pass without any significant revisions.
Notably, the Act’s paid leave provisions do not apply to all private employers. Instead, after intensive negotiations between Speaker Pelosi and Treasury Secretary Mnuchin, the paid sick leave mandates in the Act apply only to employers with fewer than 500 employees. Therefore, if your business has 500 or more employees, the Act’s leave provisions do not apply to your business, and you may continue to follow your current leave policies and the other applicable laws (e.g., ADA, FMLA, OSHA, workers’ compensation) that conceivably regulate aspects of the coronavirus pandemic.
Covered employers who pay their employees for leave under either portion of the Act are entitled to a 100% tax credit, subject to certain limitations set forth in the Act. Furthermore, payments under the Act are not to be considered “wages” for the purpose of employer tax obligations under Section 3111(a) of the Internal Revenue Code.
The Emergency Paid Sick Leave Act:
Turning first to the Emergency Paid Sick Leave Act, all employees of companies with fewer than 500 employees are eligible regardless of their respective length of employment. An employee is eligible for paid sick for any of the following events:
- To self-isolate because of a diagnosis of coronavirus;
- To obtain a medical diagnosis or care if the employee is experiencing symptoms of coronavirus;
- To comply with the recommendation of a public official or health care provider that the physical presence of the employee would jeopardize the health of others because of (a) exposure to the coronavirus or (b) exhibition of symptoms of coronavirus;
- To care for a family member that falls within the criteria of item 3 above; OR
- To care for a child under the age of eighteen (18) if the child’s school or place of care has been closed OR if a paid child care provider of such child is unavailable due to coronavirus.
If any of these trigger events occur, a full-time employee is entitled to 80 hours of paid leave and a part-time employee is entitled to pro-rated paid leave based on that person’s regular hours. This paid leave moreover takes priority over all other paid leaves, meaning employers cannot require substitution of other leaves or the taking of other leaves before this leave benefit. The Emergency Paid Sick Leave Act also includes a robust anti-retaliation provision preventing employers from taking adverse employment action as a result of the exercise of protected leave. In other words, this paid leave is in addition to other forms of paid leave that may be offered to employees.
The Secretary of Labor also is developing a Notice regarding this paid leave that must be posted in the workplace.
The Emergency Family and Medical Leave Expansion Act
Under the Emergency Family and Medical Leave Expansion portions of the Act, there are some minor differences in scope of coverage than under the Emergency Paid Sick Leave portion. First, for employers with fewer than 500 employees, the Secretary of Labor has the ability to issue regulations exempting health care and emergency response providers, as well as employers who may be jeopardized as a going concern as a result of compliance. Eligible employees include all employees who have worked at least thirty (30) calendar days for the employer. Accordingly, while this portion of the Act does not cover all employees, it still applies a much lower threshold for eligibility than the FMLA’s other provisions.
Assuming eligibility, an employee qualifies for paid leave under the Emergency Family and Medical Leave Expansion Act for any of the following reasons:
- A public official or health care provider recommends that (a) the presence of the employee would jeopardize the health of others because of (i) exposure to the coronavirus or (ii) the exhibiting of symptoms of coronavirus, AND (b) the employee is not able to perform the essential functions of his/her job and also be able to comply with the recommendation;
- To care for a family member that meets the criteria within item 1 above as to that person; OR
- To care for a child under the age of 18 if the child’s school or place of care has been closed OR if a paid child care provider of such child is unavailable due to coronavirus.
For eligible employees the first fourteen (14) days of twelve (12) weeks of coronavirus-related protected leave may be unpaid, but an employee may elect to substitute any form of available paid leave. (Presumably, this provision contemplates availability of paid leave under the Emergency Paid Sick Leave Act.) In a major shift from the current provisions of the FMLA, the remainder of the up to twelve (12) weeks of protected leave under the Act must be paid at two-thirds of the employee’s regular pay. Please note that it is unclear from the text of the Emergency Family and Medical Leave Expansion Act as to whether this benefit provides employees an additional twelve weeks of leave so that it would apply to employees who have already exhausted some or all of their FMLA rights. With that being said, our immediate thought is that employers should take an expansive view of the rights afforded by the Act.
The Act also provides for job restoration rights unless the employer has fewer than twenty-five (25) employees and the employee’s position no longer exists due to economic conditions or changes in operations caused by the public health emergency.