With the novel coronavirus (“COVID-19”) continuing to spread across the country, the U.S. House of Representatives (“House”) voted in the early hours of March 14, 2020 to provide emergency relief to Americans through the Families First Coronavirus Response Act (the “Act”).  While the Act has not yet become law – it must still be passed by the U.S. Senate and signed by President Donald Trump – it is already getting a great deal of attention.

The version of the Act that the House first adopted on March 14^th included a variety of resources and benefits, including emergency paid sick leave and emergency paid family and medical leave, for which the Act provides covered employers with a tax credit.  Just two days later, however, on March 16, 2020, the House voted to trim back some of these benefits with respect to emergency paid family and medical leave.

Below is a summary of the latest version of the Act’s highlights for employers; however, employers should note that if the Act becomes law, the emergency paid leave provisions described below will generally only apply to private employers with fewer than 500 employees and to government employers.

In addition, employers should also note that if the Act becomes law, it will take effect 15 days after President Trump’s execution of the law and will remain effective until December 31, 2020.

Emergency Paid Sick Leave

• Under the Act, full-time employees will immediately become entitled to up to 80 hours of emergency paid leave[1] only for the following circumstances:
  • To self-quarantine after a diagnosis of COVID-19 (in which case the paid leave must be equal to the employee’s regular rate of pay);
  • To obtain a medical diagnosis or care if the employee is experiencing symptoms of COVID-19 (in which case the paid leave must be equal to the employee’s regular rate of pay);
  • To comply with orders from public health officials or healthcare professionals not to report to work due to the employee being exposed to COVID-19 or experiencing COVID-19 symptoms (in which case the paid leave must be equal to the employee’s regular rate of pay);
  • To care for a family member who is self-quarantined, obtaining a medical diagnosis or care after experiencing COVID-19 symptoms, and/or complying with an order from a public health official or healthcare professional (in which case the paid leave must be equal to 2/3 of the employee’s regular rate of pay); or
  • To care for child whose school or child care provider is closed due to COVID-19 (in which case the paid leave must be equal to 2/3 of the employee’s regular rate of pay).
• The Act provides that this emergency paid sick leave will be in addition to any other paid leave options that the employer provides (including paid sick leave) to employees, the employer will not be able to require an employee to first exhaust other paid leave, and an employer will not be permitted to change other leave policies in light of the Act.
• The Act also includes anti-retaliation protections for employees who use the paid sick leave and/or complain of violations of the same.

Emergency Paid Family and Medical Leave[2]

• Under the Act, employees will be entitled to job-protected paid family and medical leave if they are unable to work (or telework) and have to care for a child (under age 18) whose school or child care provider is closed due to COVID-19.[3]
• Unlike traditional FMLA which applies only to employees who, among other things, have been employed for 12 months, the only prerequisite for leave under the Act is that the employee have been employed for 30 calendar days.
• The Act provides that the first 10 days of the leave will be unpaid (unless the employee chooses to use other paid leave, such as emergency paid sick leave available under the Act, during the 10 day period). For the remainder of the leave, the employee must be paid 2/3 his or her regular rate of pay.  Unlike with regard to regular FMLA leave, the employer will not be permitted to require the substitution of paid leave.
• Under the Act, employees will still only be entitled to a combined 12 weeks of leave (paid and unpaid) during any 12 month period for FMLA-covered reasons.

In addition, employees without paid leave rights under the Act may be entitled to unemployment insurance benefits.

Employer Tax Credits

• Under the Act, employers are permitted to claim a quarterly credit against the employer’s social security tax obligations for qualified emergency paid sick leave wages that are paid. The credit will be subject to certain limitations, including a cap based on the type of paid sick leave wages paid. For example:
  • Wages paid because an employee must self-quarantine, obtain a diagnosis or medical care, or comply with a public health order will be capped at $511 per day.
  • Wages paid because an employee must care for an ill family member or because a school or child care provider is closed will be capped at $200 per day.

The Act will also permit employers to claim a quarterly refundable credit against the employer’s social security tax liability for qualified emergency paid family and medical leave wages that are paid.  This credit will also be subject to certain limitations, including a cap for each employee of $200 per day and $10,000 for all calendar quarters.

[1] Part-time employees will be entitled to a prorated amount of paid leave based on their normally scheduled hours.

[2] Under the Act, paid emergency family and medical leave benefits are to be provided through an amendment to the Family and Medical Leave Act (“FMLA”).

[3] The March 14^th version of the Act also provided job-protected paid family and medical leave if: (A) the employee: (i) has been exposed to COVID-19 or is experiencing COVID-19 symptoms AND (ii) cannot perform his or her job functions; or (B) if the employee needs to care for a family member who has been exposed to COVID-19 or is experiencing COVID-19 symptoms.

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