As people everywhere struggle to adjust to the rapid changes caused by the COVID-19 outbreak, the financial impact on businesses and employees has been a primary concern. Employees are facing reduced work hours and layoffs as businesses scale back or close. At the same time, employees are dealing with the reality of a serious health threat to themselves and family members. The scale of disruption to the normal functioning of businesses and to people’s lives is unprecedented.
To address the severe impact of Covid-19 on people’s lives, on Wednesday, March 18, 2020, President Trump signed into law sweeping COVID-19 relief titled the Families First Coronavirus Relief Act, H.R. 6201 (the Act). Congress passed the Act—which includes significant, immediate employment law implications—with broad, bipartisan support.
- requires private insurance plans to provide free COVID-19 testing;
- requires employers to provide emergency paid sick leave to workers affected by COVID-19 and expands family and medical leave; and
- provides increased funding for state unemployment insurance programs, food stamp and nutritional programs and others.
This update focuses on the emergency family and medical leave and emergency sick leave aspects of the Act, which will affect most employers and employees across the country.
Emergency Family and Medical Leave Expansion Act
Effective 15 days after enactment and ending December 31, 2020, i.e., Thursday, April 2nd, the Act will temporarily expand coverage and eligibility under the federal Family and Medical Leave Act (FMLA) for reasons relating to the COVID-19 pandemic.
Employer Coverage and Employee Eligibility
Usually, the FMLA applies only to private-sector employers with 50 or more employees (as well as public agencies regardless of the number of employees they employ). The Act expands FMLA benefits to all private-sector employers with fewer than 500 employees. The Act also redefines “eligible employee” as any employee who has been employed for at least 30 calendar days. This definition of “eligible employee” contrasts the pre-Act FMLA requirement that employee eligibility was contingent upon working at least 1,250 hours during the 12 months prior to the start of FMLA leave.
New Reason for Job-Protected FMLA Leave
The Act identifies a new reason for eligible employees to take job-protected FMLA leave. Specifically, eligible employees who are unable to work (including telework) may take leave for the purpose of caring for a child under 18 years of age whose school or childcare provider has been closed, or is unavailable due to the COVID-19 emergency.
Pay Benefits Under Expanded FMLA
The first 10 days of this expanded FMLA leave will be unpaid, although employees can use paid time off or sick time to cover some, or all of the initial unpaid period. After 10 days, the employer will be obligated to pay full-time employees 2/3 of their regular rate of pay for the employee’s regular weekly hours for up to 10 weeks. Part-time employees or those with irregular schedules will be paid at 2/3 of their regular rate for the average number of hours worked over the prior 6 months of employment. Family and medical leave payments will be capped at $200 per day ($10,000 in the aggregate) for employees who take leave for any of the qualifying reasons set forth above.
Small businesses with fewer than 50 employees may seek an exemption from the expanded FMLA requirements from the Secretary of Labor if the business can show that compliance with the law would jeopardize the business as a going concern.
An employer of an employee who is a “health care provider” or an “emergency responder” may elect to exclude such employee from the Act’s FMLA amendments.
Emergency Paid Sick Leave Act
The emergency paid sick time component of the Act will require all employers with fewer than 500 employees to provide full-time employees with 80 hours (pro-rated for part time employees) of paid sick time. This paid sick time is in addition to any paid sick leave already provided by the employer but will not carry over to the following year (employers cannot adjust their policies to avoid the paid sick time obligations of the Act). Upon the request of an employee, the employer must permit the employee to use the paid sick time discussed in this section to cover the initial 10-day period of unpaid leave under the FMLA, discussed above.
Covered employers must provide employees paid sick time to the extent an employee is unable to work (or telework) due to a need for leave because:
- The employee is subject to a Federal, State, or local quarantine, or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to an order as described in paragraph (1) or has been advised as described in paragraph (2).
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Emergency Paid Leave Benefits
Full time employees will receive paid leave at their full regular rate of pay for reasons 1, 2, and 3, above, and 2/3 of their regular rate of pay for reasons 4 and 5.
For part-time employees or those with irregular hours, emergency paid sick leave will be calculated based on the number of hours the employee works on average over a 2-week period.
Sick leave payments to employees who have worked less than 6 months shall be calculated based on the average number of hours that the employee would regularly be scheduled to work.
Emergency sick leave payments will be capped at $511 per day ($5,110 total) for employees who take leave because of reasons (1), (2), or (3), i.e., illness or quarantine. Payments are capped at $200 per day ($2,000 total) for employees who take leave for reasons (4), (5), or (6), i.e., care for affected individuals or school closure.
The paid sick leave provisions of the Act do not preempt state paid sick leave laws such as Connecticut’s Paid Sick Leave Law. Also, the paid sick leave provisions do not diminish an employee’s existing rights under a collective bargaining agreement or existing employer policy.
Tax Credits to Employers
Employers who are required to provide Emergency Paid Family and Medical Leave and Emergency Paid Sick Leave under the Act shall be eligible to receive refundable tax credits to ease the financial burdens of these requirements.
The Covid-19 situation is changing rapidly, and the legal landscape is becoming more complex as regulators and lawmakers respond to it. The Emergency Family and Medical Leave Expansion Act provides immediate relief to employees, and the implementation of the new law by employers is critical.