Many clients have been asking about “emergency sick leave” which had been mentioned in various press conferences, but until last night, not finalized. On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”) into law. The new law becomes effective on April 2, 2020, and covers employers with fewer than 500 employees. The following is a summary of changes and expansion of the Family Medical Leave Act (“FMLA”) and the new Emergency Paid Sick Leave Act that will both become effective with the new law. Please note that this new law gives the U.S. Secretary of Labor the authority to issue regulations and guidance regarding the new laws. That has not occurred yet, but we will be closely monitoring any additional developments. The following is a summary of what we know today. Finally, the new law contains tax credit provisions for private employers.
Emergency Paid Sick Leave Act
In summary, this statute is new and it requires all employers, including all government employers, with fewer than 500 employees to provide all of their employees with up to 2 weeks of paid sick leave for qualifying COVID-19 related absences. This law will take effect on April 2, 2020, and will extend through December 31, 2020. The leave will be available for immediate use and may be used by any employee regardless of how long they have been employed.
Many of our clients employ police and firefighter/paramedics. These employees will be considered “emergency responders” under the Act, which contains a provision that allows employers to exclude these employees from eligibility under the Act. The Act also provides the U.S. Secretary of Labor with the authority to issue regulations that will exempt these employees. That has not happened as of this posting. We will continue to monitor this issue and update accordingly. We believe that this provision is intended to apply to childcare provisions of the Act and not a situation wherein the emergency responder becomes infected with the virus or has to care for a sick family member.
The reasons for using emergency paid sick leave are as follows, and fall into two categories:
Employee’s Own Illness
- The employee has symptoms of COVID-19 and is seeking a diagnosis;
- The employee has been told by a medical provider to self-quarantine;
- The employee is subject to a federal, state or local quarantine or “shelter in place” order (we do not have guidance on how expansively this may be interpreted, so stay tuned for updates);
Necessary Care for Others
- The employee is caring for an individual subject to government quarantine, isolation order or who has been advised by a medical provider to self-quarantine;
- The employee is caring for a child because of a virus related school closure or unavailability of childcare (daycare closures, park district closures, etc.)
- The employee is experiencing any other “substantially similar condition” as specified by the U.S. Secretary of Health and Human Services in consultation with the U.S. Secretaries of Treasury and Labor (if this sounds overly vague, it is and we await clarification on what exactly it is supposed to mean – as written it is an alarmingly unclear “catch-all” provision)
Full-time employees are eligible for up to 80 hours of leave. Part-time employees' eligibility should be calculated on the average number of hours worked in a two week period.
The new law caps pay. If the absence is for the employee him/herself, the employee gets his/her actual rate of pay or the applicable minimum wage, whichever is greater, with a cap of $511 per day or $5,110 total. For the care of others, the cap is 2/3 the employee’s minimum regular rate of pay or the applicable minimum wage, whichever is greater, with a cap of $200 per day or $2,000 total.
The leave will not carry over nor can it be “banked” for use beyond the expiration date of December 31, 2020. Employers cannot require employees to use other paid time off (vacation, sick, personal, comp, etc.) prior to the emergency sick leave provided by this Act. This paid leave is in addition to all other forms of paid leave offered by an employer by policy, collective bargaining agreement (“CBA”) or both. The new law has notice provisions, but that may be “window dressing” given the circumstances surrounding this virus. This is not like elective surgery, so we advise being very careful about denying leave under this Act based upon not receiving “reasonable” notice.
Employees who use this leave must return to work as soon as the need for the leave resolves (employee tests negative for the virus, school is back in session, etc.). Employers cannot require employees to find replacements before allowing them to use this leave. Retaliation and discrimination for using this leave are prohibited and violations will be penalized. The penalties will be considered minimum wage violations under the FLSA and shall include lost wages, liquidated damages and attorney’s fees and costs. If the violation is intentional, a $10,000 fine may be assessed and repeat offenders may be sentenced to up to 6 months in prison (federal prison we presume) after a prior conviction.
Social Security taxes do not apply to emergency sick leave under this Act for purposes of calculating Social Security taxes owed by the employer. FMLA definitions will apply for terms such as son or daughter and health care provider.
In summary, this is broad legislation intended to provide pay for COVID-19 related work absences relating to the employee’s illness, the need to care for a family member, government-ordered quarantines/lockdown and COVID-19 related childcare issues. It is NOT 2 weeks of paid leave to stay home because an employee does not want to come to work or is afraid to come to work based upon fear of contracting the virus.
Expansion of the FMLA
The expansion of the FMLA requires employers of 500 or fewer employees and government employers to provide 12 weeks of job-protected leave to all full-time, part-time and temporary employees who have been on the job for at least 30 days. There is no minimum hour requirement for this leave. The new law provides for small business exemptions for employers with fewer than 50 employees, but it does not specifically reference small “government employers,” so, at this time, the expansion appears to apply to all government employers. There is a provision regarding exclusions from the expansion for emergency responders (police and fire), but the Secretary of Labor was given authority to promulgate rules exempting such employees, so we will update this information when and if that happens.
The added qualifying reason for this leave is that the employee is forced to care for a child under 18 because of a school closure or the unavailability of childcare due to COVID-19. The first 10 days of this leave are supposed to be unpaid, but it is possible that the Emergency Paid Sick Leave Act may be used in this instance as well as any other form of paid time off at the employee’s discretion. The employer cannot force the employee to use emergency paid sick leave or other paid benefit time if they choose not to do so. After the first 10 days of “unpaid” leave (if the employee does not substitute paid leave), employees must be paid 2/3 their regular rate of pay using the same formulas set forth above for emergency paid sick leave. This paid leave is capped at $200 per day and $10,000 in total.
Employers with 25 or more employees must return the employee to the same or a substantially similar position using existing FMLA rules. Employers with less than 25 employees may not have to return employees to work, but conditions apply and all conditions must be met to deny return to work. The conditions are summarized below:
- The employee took leave to care for a child based upon school closure or the unavailability of childcare due to COVID-19; and
- The employee’s position no longer exists because of economic conditions occasioned by COVID-19; and
- The employer makes “reasonable efforts” to restore the employee to their position; and
- The reasonable efforts fail; and
- The employer tries to contact the employee if an equivalent position becomes available for one year starting on the earlier of: (1) the date the qualifying need related to COVID-19 ends (school goes back in session) or (2) a date 12 weeks after the employee’s leave started.
Remember, if reinstatement is denied, ALL of the elements above must be satisfied.
As with the Emergency Paid Sick Leave Act, wages under the FMLA expansion for COVID-19 are not subject to Social Security taxes, and as with the FMLA, discrimination and retaliation are prohibited. Violations of the FMLA as expanded shall be handled the same as violations of the FMLA.
We recognize that these are difficult times and our clients have many concerns. We also recognize that emergency measures, including emergency legislation such as those summarized above, are often moving targets. Rest assured that we will continue to monitor new legislation as well as new regulations that may affect our clients. If you have any questions, please do not hesitate to contact us, and most importantly be well and stay safe.