The Senate passed H.R.6201, known as the Families First Coronavirus Response Act, last evening with wide bipartisan support.  It includes an emergency expansion of the Family Medical Leave Act, and a mandate that employers provide emergency paid sick leave to employees.  The following is a brief overview of these critical provisions, of which all employers must be aware.

Emergency Family and Medical Leave Expansion Act

• The Act expands the Family and Medical Leave Act (FMLA) to provide twelve (12) weeks of leave for all employees of employers with less than 500 employees.
• It becomes effective on April 2, 2020 (expiring on December 31, 2020).
• The Act authorizes the DOL to exempt small businesses with less than 50 employees if “such requirements would jeopardize the viability of the business as a going concern.”
• This leave is available to employees who are unable to work (or telework) as a result of school or childcare closures caused by the COVID-19 pandemic.
• The first ten (10) days of this leave are unpaid, but the employer must compensate the employee for the remaining 10 weeks of leave at a rate of two-thirds of the employee’s rate of pay under the Fair Labor Standard Act (FLSA)
• The Act caps the employee’s compensation for the 10 weeks of paid leave at $200 per day or $10,000 in the aggregate.
• For the first 10 days of unpaid leave, an employee may use any accrued paid time off (PTO) or sick leave, but the Act prohibits employers from requiring that employees do so
• Upon return from leave, an employee has the same rights as any other employee returning from leave under the FMLA. Such an employee is entitled to be restored to the same job or to an “equivalent job” with equivalent benefits and other terms and conditions of employment.
• The Act provides for an exception to FMLA’s requirement that employees be restored to the same or an equivalent position.
  • Employers with fewer than 25 employees are exempt from such requirements if the employee’s job position no longer exists “due to changes in economic conditions or other changes in operating conditions of the employer” that resulted from the COVID-19 pandemic.
  • Employers must make a reasonable effort to restore the employee to the same or equivalent position, and to contact the employee if an equivalent position becomes available within 1 year.

• Employees are eligible for this benefit if they worked for the employer for 30 calendar days.

Emergency Paid Sick Leave Act

• The Act requires employers with less than 500 employees to provide two (2) weeks of paid sick leave for all employees who are unable to work (or telework) for certain delineated reasons related to the COVID-19 pandemic.
• The requirement becomes effective on April 2, 2020 (expiring on December 31, 2020).
• Employees are entitled to 2-weeks of paid sick leave only for the following specified reasons:
  • “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 a quarantine or isolation order related to COVID-19, or has been advised to self-quarantine by a health care provider based on concerns related to COVID-19.
  • Employees must care for their children due to closures and the unavailability of school and child care providers related 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.”
  • The Act authorizes the DOL to exempt small businesses with less than 50 employees if “such requirements would jeopardize the viability of the business as a going concern.”

• Health care providers and first responders may elect to exclude certain employees from entitlement of the 2-weeks paid sick leave.
• Full-time employees are entitled to 80 hours of paid sick leave at their full rate of pay.
• Part-time employees are entitled to number of hours worked, on average, during a 2-week period at their full rate of pay.
• The Act caps compensation for the 2-weeks of paid sick leave at $511 per day and $5,110 in the aggregate (or, under certain circumstances, $200 per day and $2,000 in the aggregate).
• Employees are immediately eligible for the 2-weeks of paid sick leave, regardless of how long the employee has worked for the employer.
• The Act prohibits employers from requiring employees to use other PTO or sick leave before using the statutorily provided 2-weeks of paid sick leave.
• The Act requires that employers post notice of this entitlement in a conspicuous place on their premises, and that this notice will be prepared and approved by the Department of Labor (DOL) within 7 days of enactment.

Payroll Tax Credits for Emergency Paid Sick Leave (EPSL) and for Emergency Family Medical Leave (EFML)

• For each calendar quarter, the Act provides employers with a refundable tax credit equal to 100% of amounts incurred for (a) any emergency paid sick leave amounts and (b) any paid emergency leave under the expanded portions of the FMLA.
• Employers may increase these credits for certain qualified health plan expenses, which derive from the wages paid for either emergency sick leave or emergency leave under the expanded portions of the FMLA.
• The maximum amount of wages considered for Emergency Paid Sick Leave is $511 per day (per such employee).  When the employee used such leave to care for a family member or for a child in the event of closures to schools and to childcare providers, the cap is reduced to $200 per day.
• Similarly, the Act caps the amount of wages considered for qualified medical leave under the expanded allowances to FMLA at $200 per day and $10,000 for all calendar quarters.
• The caps reflect the maximum amounts employers may be required to provide to each employee under the Emergency Paid Sick Leave Act and the Expanded Emergency Family and Medical Leave Act.
• The Act further provides for analogous credits for self-employed individuals.

Enforcement

• The Emergency Paid Sick Leave Act provides for enforcement mechanisms, which impose certain substantial penalties for non-compliance.
• Violations of the Act will also be considered violations of the FLSA, including provisions for the recovery of attorneys’ fees and other costs.
• Any violations of the Emergency Family and Medical Leave Expansion Act, whether intentional or otherwise, will trigger the enforcement mechanisms under the FMLA.

The Act may leave some lingering uncertainty for employers at a time when government (whether local, state or federal) has ordered or recommended that many non-essential businesses cease operations.  For now, signs indicate that such orders and recommendations will be lifted after the current 2-week cycle – prior to the date when this Act shall become effective on April 2, 2020.  The situation, however, is constantly evolving and will inevitably raise compliance questions.

Attorneys at Goldstein Law Partners are available to assist you with anticipating, confronting and managing the compliance challenges ahead.  We are ready to answer questions and to provide guidance as you and your business deal with implementation.