March 20, 2020 - Coronavirus (COVID-19)

President Trump Signs the Families First Coronavirus Response Act into Law, Creating Paid Family and Sick Leave for Employees

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”). The new law expands the Family and Medical Leave Act (“FMLA”) to provide up to 12 weeks of paid family leave for employees who must care for a minor child due to a school or caregiver closure as a result of the COVID-19 pandemic. The FFCRA also provides employees up to 80 hours of paid sick leave that they may use for self-care or family-care in response to the pandemic. A number of key changes were made to the earlier version of the bill passed by the House of Representatives on March 14, 2020, including eligibility for leave, leave caps, and removal of the provision prohibiting employers from revising their own sick leave policies.

The FFCRA is the first federal law requiring private employers with fewer than 500 employees to provide paid sick leave or paid family leave to employees. The law does not address whether employees at related entities, such as subsidiaries, parents, or affiliates, might be aggregated to be exempt from coverage. If covered under the FFCRA, employers must provide: (1) paid family leave to employees who have been employed for 30 or more days if they are unable to work because their minor child’s school is closed or childcare is unavailable due to COVID-19; and (2) paid sick leave to all employees for certain qualifying emergencies related to COVID-19. Covered employers are entitled to a tax credit each quarter equal to 100 percent of the wages they pay for leave required by the FFCRA. Employers can face civil penalties for taking adverse action or retaliating against employees who use FFCRA-required leave or complain about violations of the law.

The new paid family and sick leave will take effect on April 2, 2020 and expire on December 31, 2020. The United States Secretary of Labor is expected to issue a model notice of the requirements for emergency paid sick leave for employers to post by March 25, 2020, and to issue additional guidance on or before April 2, 2020.

We provide further details below about the new paid leave, financial assistance, and tax credits available to employers.

Emergency Family and Medical Leave Expansion

This provision expands FMLA to provide for paid family leave referred to in the FFCRA as “public health emergency leave” as follows:

  • Covered Employers:
    • The public health emergency leave applies to employers with “fewer than 500 employees” rather than “50 or more employees” applicable for other qualifying FMLA absences.
    • Employers with employees who are “health care providers” or “emergency responders” may elect to exclude those employees from being eligible for public health emergency leave.
    • The U.S. Department of Labor can exempt employers with fewer than 50 employees in certain circumstances.
  • Eligible Employees:
    • Employees must have been employed for at least 30 calendar days at the time that they need to take the “public health emergency” leave.
    • “Qualifying need related to a public health emergency” is defined as:
      • The employee is unable to work (or telework) due to a need for leave to care for the employee’s child (under 18 years old) if the school or place of care has been closed, or if the childcare provider for the son or daughter is unavailable due to a public health emergency.
    • A “public health emergency” is “an emergency with respect to COVID-19 declared by a Federal, State, or local authority.”
  • Amount of Leave:
    • Employees are entitled to take up to 12 weeks of leave for “a qualifying need related to a public health emergency.”
  • Required Compensation:
    • The first 10 days of paid family leave may consist of unpaid leave. Employees may substitute other paid leave that they might have available, such as accrued vacation, personal leave, or other paid sick leave.
    • After the initial 10 days, employers must provide paid leave for each day an employee takes paid family leave.
    • Employers must provide paid family leave at the greater of the following rates: (1) two-thirds (2/3) of the regular rate of pay for the number of hours usually worked by the employee; or (2) the minimum wage applicable to the employee.
    • Paid family leave is capped at $200 per day, or $10,000 in the aggregate, for the full 12 weeks of leave.
    • Employers are not required to pay for unused paid family leave upon termination of employment.
  • Job Restoration:
    • Covered employers with 25 or more employees must restore employees returning from paid family leave to their same or equivalent position. Employers with fewer than 25 employees are exempt from this requirement if:
      • the employee’s position no longer exists because of economic or other changes to the employer’s operations related to the COVID-19 crisis;
      • The employer makes “reasonable efforts” to restore the employee to an equivalent position; and
      • If no positions are available, the employer makes additional reasonable efforts to contact the employee if an equivalent position becomes available.

Emergency Paid Sick Leave

This provision creates a new federal-level paid sick leave, as follows:

  • Covered Employers:
    • Employers employing fewer than 500 employees.
    • Employers with employees who are “health care providers” or “emergency responders” may elect to exclude those employees from the paid sick leave provisions.
    • The U.S. Department of Labor can exempt employers with fewer than 50 employees in certain circumstances.
  • Eligible Employees:
    • Employees are eligible for paid sick leave if they are unable to work (or telework) because:
      1. They are subject to a federal, state, or local quarantine or isolation order related to COVID-19
      2. They have been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
      3. They are experiencing symptoms of COVID-19 and are seeking a medical diagnosis.
      4. They are caring for individuals who are subject to an order as described above in (1), or have been advised as described above in (2).
      5. They must take care of their children if their children’s school or childcare provider is closed, or unavailable, due to COVID-19 precautions.
      6. They are “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.”
    • Use of paid sick leave must be available immediately for any of the reasons described above, regardless of how long the employee has been employed by the employer.
  • Amount of Leave:
    • Full-time employees can take up to 80 hours of paid sick leave.
    • Part-time employees are eligible for paid sick leave equivalent to the number of hours that they work, on average, over a 2-week period.
    • Paid sick leave is not carried over from year to year.
  • Required Compensation:
    • Employers must pay employees at their regular rate of pay, up to $500 per day, or $5,110 total, for all qualifying leave related to a quarantine or isolation order, advice by a health care provider to self-quarantine, or seeking medical diagnosis due to experiencing COVID-19 symptoms.
    • Employers must pay employees two-thirds (2/3) of their regular rate of pay, up to $200 per day, or $2,000 total, for all qualifying leave related to family-care or childcare, or if the employee is experiencing another substantially similar illness (as specified by HHS).
    • Paid sick leave is in addition to other legally required sick leave.
    • Employers are not required to pay for unused paid sick leave upon termination of employment.
  • Additional Requirements:
    • Employers must post a notice of the paid sick leave requirements for employees. The notice must be posted in conspicuous places on the premises of the employer where notices to employees are customarily posted.
    • Employers cannot condition paid sick leave upon an employee finding or searching for another employee to replace the employee while he or she is using sick leave.
    • Employers cannot require employees to use other paid leave provided by the employer before using paid sick leave under the FFCRA.

Tax Credits and Financial Assistance

  • The FFCRA provides financial assistance to employers to pay for these new benefits. Specifically, Division G of the legislation provides employers with quarterly tax credits for wages they pay employees for providing paid family and sick leave required by the FFCRA.
  • The FFCRA also provides $1 billion in 2020 for emergency grants to states for activities related to processing and paying unemployment insurance benefits, interest free loans to states to pay regular unemployment insurance benefits, and technical guidance to states that would set up work-sharing programs, in which employers reduce hours instead of laying off employees. Employees would receive partial unemployment benefits to offset the wage losses. Finally, the FFCRA provides for 100% funding of extended unemployment benefits to states with higher than normal rates of unemployment.

As we all know, the situation is developing rapidly, seemingly by the minute. Please keep checking our blog, the Employment Law Commentary for employment-related developments and our Coronavirus (COVID-19) Resource Center for continued advice on the numerous issues that we are following.