The coronavirus pandemic has presented challenges for employers trying to remain responsive to the crisis but also struggling to absorb the burden it has imposed on their businesses. With much anxiety, employers have also been anticipating a new law, H.R. 6201, to go into effect that would expand family and medical leave requirements to cover COVID-19. As of yesterday, Congress passed and President Trump signed the final version of H.R. 6201, titled the Families First Coronavirus Response Act.
The Act will take effect on April 1, 2020 and will remain effective until December 31, 2020. All emergency provisions within the Act are designed to be temporary unless that period is expanded by subsequent regulations. As of today’s writing, the Act applies to all private-sector employers with fewer than 500 employees. However, certain health care providers and emergency responders may be excluded from the definition of eligible employee, and businesses with fewer than 50 employees may be exempt from the Act’s paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
The new law, among other things, imposes new emergency paid sick leave requirements, expands the Family and Medical Leave Act (FMLA) to include COVID-19 related absences, and provides tax credits to help employers with the costs of providing these benefits.
Emergency Paid Sick Leave
All employers with fewer than 500 employees must provide two weeks of paid sick leave to any eligible employee who is unable to work, including telework, if the employee:
1. is subject to a federal, state, or local quarantine or isolation in response to COVID-19;
2. has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
3. is experiencing symptoms associated with COVID-19 and is seeking a medical diagnosis;
4. is caring for an individual (not necessarily limited to family members based on how the Act is written now but this may be subject to revision) who is either subject to a federal, state, or local quarantine or isolation due to COVID-19;
5. is caring for his/her child whose school has been closed or whose place of care is unavailable due to COVID-19 precautions; or
6. is experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor (precise meaning to be clarified by the Secretary of Health and Human Services).
For employees taking leave for reasons 1, 2, or 3, the Act provides that those employees shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a two-week period).
For employees taking leave for reasons 4 or 6, those employees shall be paid at 2/3 of their regular rate or 2/3 of the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a two-week period).
For employees taking leave for reason 5, they shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a twelve-week period). The aggregate period for reason 5 is longer than for the other enumerated reasons because reason 5 is the only reason that triggers the additional leave provisions of the Family and Medical Leave Act Expansion, discussed more fully below. The 12 weeks for reason 5 comes from two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave.
The Secretary of Labor is required to issue guidelines to assist employers in calculating leave benefits by April 2. Employers must also post a notice that advises employees of their rights under the Act. The Secretary of Labor is required to create this notice by March 25.
Family and Medical Leave Act Expansion
All employers with fewer than 500 employees must permit current employees who have been employed with them for at least 30 days to take FMLA-leave if the child of the employee has had his/her school or place of care closed due to COVID-19. If an employee is no longer able to work (including telework), then the emergency expansion of FMLA benefits means up to 12 weeks of leave for qualifying employees. This leave may be administered as follows:
- The initial 10 days of leave are unpaid, but the employee may elect to use accrued paid sick leave and/or accrued vacation during this otherwise unpaid period.
- After the initial 10-day period, the employer must provide the employee with two-thirds of his/her normal wages for the number of hours he/she would regularly be scheduled to work, up to a maximum of $200 per day and $10,000 in total.
All eligible employees may apply for expanded FMLA leave beginning on April 1.
Tax Credits for Paid Leaves
The new Act provides for a number of tax credits to ease the financial burdens imposed on employers by this new expansive leave requirements. The refundable credits come from the 6.2% employer portion of the Social Security tax. The credits created by the Act for employers include:
- A sick leave credit for each employee for wages (including qualified health plan expenses relating to those wages) of up to $511 per day while the employee is receiving paid sick leave to care for him/herself, capped at 10 days per employee per quarter;
- A sick leave credit for each employee for wages (including qualified health plan expenses relating to those wages) of up to $200 per day while the employee is receiving paid sick leave to care for a family member or child whose school has closed, capped at 10 days per employee per quarter; and
- A family leave credit for each employee for wages (including qualified health plan expenses relating to those wages) of up to $200 per day, capped at $10,000 in the aggregate for all calendar quarters.
Employers are required to include the amount of credits received pursuant to the Families First Coronavirus Response Act in order to prevent a double benefit. The Act authorizes the Department of the Treasury to issue further regulations or guidance relating to the tax credits.
As an emergency measure, the Act will need to be clarified and expanded in the coming days via subsequent regulations and directions from the Secretaries of Labor, Treasury, and Health and Human Services. California may also have its legislation on the way, but when and in what form remains to be determined. In the meantime, employers should be prepared to provide leave in accordance with the new Families First Coronavirus Response Act beginning on April 1st.
This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP. It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked. So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again. This is commentary, people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing. No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits). But feel free to contact us with your questions and comments—who knows, we might even answer you. And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry). Big news: Copyright 2020. All rights reserved; yep, all of them.
If you have any questions regarding this blog, contact email@example.com of ECJ’s Employment Law Department.