By Morgan D. Schut

The Families First Coronavirus Response Act (“Act”) was signed into law on late evening of March 18, 2020. The Act provides several emergency provisions that significantly modify the applicability of the Family and Medical Leave Act and also require employers to provide paid sick leave in certain circumstances related to COVID-19. A few quick points are:

  • These emergency provisions apply to private companies with fewer than 500 employees
    • Certain companies with fewer than 50 employees may apply for exemption from the Act
    • Certain health care providers and emergency responders may be exempt from the Act
  • The act has been effective since April 1, 2020.
  • These emergency provisions expire on December 31, 2020.
  • The “Emergency Family and Medical Leave Expansion Act” allows for qualifying employees up to 12 weeks of protected leave, with at least 10 of those weeks to be paid at 2/3 of the employee’s compensation.
  • The “paid sick leave” provisions discussed in Part 2 below are in addition to any and all existing company policies.  Importantly, an employer cannot now modify any sick leave policy to accommodate or ease its own policy in light of this new law; the company’s policies as written at the time of the bill must remain in place at this time.

The Wage and Hour Division of the Department of Labor continues to update guidance in practical considerations of the Act, which can be found here. For specific questions regarding how these provisions of leave may apply to you, or your employee, please reach out to us.

1. The Emergency Family and Medical Leave Expansion Act

In brief, Division C of the Act, the Emergency Family and Medical Leave Expansion, provides that private companies with fewer than 500 employees allow employees up to 12 weeks of job-protected leave under the Family and Medical Leave Act (“FMLA”).  This is called the “Emergency Family and Medical Leave Expansion.”  This is different from FMLA for two main reasons.  First, it applies to companies employing 1-49 employees.  Second, ten of these twelve weeks are to be paid at a rate of no less than two-thirds of the employee’s usual rate of pay.   FMLA leave for all other purposes remains unpaid.

For an employee to be eligible for paid leave under this provision, employees must have been on the employer’s payroll for 30 days and may use emergency FMLA leave for a “qualifying need related to a public health emergency” (public health emergency definition includes COVID-19):

  • The term ‘qualifying need related to a public health emergency’, with respect to leave, means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.

The first two weeks of this leave may be unpaid; however, the employee may substitute accrued paid time off or other medical or sick leave during this period, but an employer cannot require an employee to do so.  After the first two weeks of unpaid leave, employers must continue paid FMLA leave at a rate of no less than two-thirds of the employee’s usual rate of pay.  This payment will be reimbursed by the federal government per tax credits and the reimbursement is maxed at $200/day per employee, or $10,000.00 total.  Like the FMLA, this leave is job-protected and an employer is required to return the employee on leave to the same or equivalent position upon their return to work.  The bill outlines an exception for employers with less than 25 employees if the employee’s job no longer exists due to the pandemic, which requires employers to make reasonable efforts to restore the employee to an equivalent position. Employees working under multiemployer collective bargaining agreements whose employers pay into pension plans will also have access to paid emergency leave.

The bill grants the Secretary of Labor the authority to issue regulations that exempt certain health care providers and emergency responders from taking leave under the bill.  It also permits exemptions for small businesses with fewer than 50 employees from the requirements of the bill if it “would jeopardize the viability of the business as a going concern.”   Specifically, subsection (3)(B) provides that: “The Secretary of Labor shall have the authority to issue regulations for good cause under Sections 553(b)(B) and 553(d)(A) of title 5, United States Code —  . . . (B) to exempt small businesses with fewer than 50 employees from the requirements of Section 102(a)(1)(F) when the imposition of such requirements would jeopardize the viability of the business as a going concern.”  There is no additional guidance on this at this stage for the applicability of (3)(B) exemption, and it is probably best that all employers do the best they can to accommodate these requirements, unless complying with this emergency provision will shut down the business as a going concern.

2. Emergency Paid Sick Leave Act

In brief, Division E of the Act, the Emergency Paid Sick Leave Act, provides that private companies with fewer than 500 employees are required to provide full-time employees with 2 weeks (80 hours) of paid sick leave for specific reasons outlined in the bill and related to the COVID-19 pandemic.  As noted above, this emergency paid sick leave is in addition to any and all current paid or other sick leave provided by company policy.  According to the Emergency Paid Sick Leave Act, an employer shall provide to each employee employed by the employer paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:

  • (1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
  • (2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
  • (3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
  • (4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
  • (5) 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.
  • (6) 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.

Employers, employing 1-499 employees, must compensate employees for any paid sick time they take at their regular rates of pay for a 2-week period of time.  Depending on which of the above, 1-6, an employee claims sick leave, the employer is required to pay sick leave as follows:

  • (5) PAID SICK TIME.— (A) IN GENERAL.—The term “paid sick time” means an increment of compensated leave that— (i) is provided by an employer for use during an absence from employment for a reason described in any paragraph of section 2(a); and (ii) is calculated based on the employee’s required compensation under subparagraph (B) and the number of hours the employee would otherwise be normally scheduled to work (or the number of hours calculated under subparagraph (C)), except that in no event shall such paid sick time exceed— (I) $511 per day and $5,110 in the aggregate for a use described in paragraph (1), (2), or (3) of section 5102(a); and (II) $200 per day and $2,000 in the aggregate for a use described in paragraph (4), (5), or (6) of section 5102(a).  (Essentially, this means 100% pay for employees caring for themselves; 2/3 of 100% pay for employees caring for others or has an “other” condition, listed in (6)).  The dollar values are capped at what the tax reimbursement caps will be totaled, and the “cap” numbers equate to an ~$133,000/annual salary).

The sick leave is available for immediate use by employees, regardless of length of employment. (Emergency FMLA above only applies to employees who have been employed for 30 calendar days).  This sick leave also applies to part-time employees, who are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a 2-week period. 

Please note that this requirement for paid sick leave is required to be provided in addition to any paid leave already provided by a particular employer —and employers may not change their paid leave policies on or after the date of enactment to avoid compliance.  Employers cannot require employees to utilize other paid leave before using the paid leave provided by this bill. Employers cannot require workers to find replacements to cover their hours during time off.  Employers also cannot terminate or discriminate against workers for requesting paid sick leave or filing a complaint against the employer related to such.  Lastly, employees working under multiemployer collective bargaining agreements whose employers pay into pension plans will also have access to paid emergency leave.

Within 7 days of enactment, the Secretary of Labor will provide a new NOTICE for employers to hang, display, or otherwise publicize in a conspicuous place for employees to review the terms under this act.

Like the exemption above for the Emergency Family and Medical Leave Expansion Act, “the Secretary of Labor shall have the authority to issue regulations for good cause under sections 553(b)(B) and 553(d)(A) of title 5, United States Code—. . . (2) to exempt small businesses with fewer than 50 employees from the requirements of section 5102(a)(5) when the imposition of such requirements would jeopardize the viability of the business as a going concern[.]”  Also like the Emergency Family & Medical Leave Expansion Act, this expires on December 31, 2020.

Potential violations of the Emergency Paid Sick Leave Act are considered to have failed to pay minimum wages in violation of the Fair Labor Standards Act of 1938 (Section 206) and will be subject to penalties of that act.  Employers who terminate an employee in violation of the Emergency Paid Sick Leave Act shall also be considered in violation of the Fair Labor Standards Act of 1938 (Section 215(a)(3)) and will be subject to penalties found in the act. 

The Department of Labor also provides that it will produce regulations to the extent necessary to maintain consistency between the Emergency Family & Medical Leave Expansion Act and the Emergency Paid Sick Leave Act.

Please reach out to us if you have any concerns in determining what, if any, leave options might apply to your company and your employees.