In this period of rapid change, few things are moving faster than the Families First Coronavirus Response Act (“FFCRA”). This federal legislation creates new sick leave benefits and temporarily expands the scope of the Family and Medical Leave Act to assist certain employees and their families confronting challenges created by the COVID-19 pandemic. The FFCRA was passed by the House on March 14, amended by the House over the weekend, and then passed by the Senate yesterday evening. The President wasted no time and quickly signed it into law. With his signature, the legal obligations of many employers changed. Those obligations take effect April 1, 2020.
This article will cover the key components of the new law. Future articles will address specific areas in more detail. Here are the changes.
Emergency Paid Sick Leave
Under the FFCRA, employers with fewer than 500 employees will be required to provide employees with paid sick leave to use in the balance of 2020. Employees who are not able to work or telework will be allowed to use the paid sick leave if they are:
- Experiencing COVID-19 symptoms and seeking a diagnosis;
- Caring for a child whose school or place of care is closed;
- Subject to a quarantine or isolation order;
- Caring for an individual under a quarantine order;
- Following a healthcare provider’s advice to self-quarantine;
- Caring for an individual who is self-quarantining per a healthcare provider’s advice;
- Taking leave for substantially similar conditions specified by the Secretary of the Department of Health and Human Services.
The Act applies to both full-time and part-time employees. Full-time employees will receive 80 hours of sick leave. Part-time employees will receive a pro-rated amount based on the hours they work, on average, during a two week period. Regulations will be developed to calculate the hours of a part-time employee who works a varying schedule. Those regulations are to be issued on or about April 3, 2020. Notices explaining the new benefit are to be prepared by the Secretary of Labor by about March 27, 2020. Those notices are to be posted where the employer posts other employment notices.
DOL guidance has confirmed that the FFCRA imposes a new leave requirement on employers.
Sick leave will be paid at the employee’s regular rate of pay. When, however, it is used to care for a family member or a child whose school or place of care is closed, then the sick leave is paid at 2/3 of the employee’s regular rate of pay. The maximum per day payment is $511 for an employee’s own use or $200 per day to care for a child or family member. Unused sick leave will not carry over and will not be paid out at time of termination.
The leave appears to be for a one time use. It will be available for immediate use. If other leave is available, the employee may choose to use the sick leave first and cannot be required to use other paid leave before using the sick leave.
The Secretary of Labor will be permitted to issue regulations exempting certain health care providers and emergency responders from the definition of an eligible employee. The Secretary will also be permitted to exempt small businesses (those with fewer than 50 employees) if the required sick leave “would jeopardize the viability of the business as a going concern.” This exemption will require further clarification by the Secretary of Labor.
Emergency Family and Medical Leave
Until the end of 2020, the Family and Medical Leave Act (“FMLA”) will be expanded to include a new section providing public health emergency leave.
With the weekend amendments to the FFCRA, it appears that this leave will only be available if the employee is unable to work (or telework) due to a need to care for a minor son or daughter because a school or place of care has been closed or because a child care provider is unavailable due to a public health emergency. Standard FMLA benefits remain available in contexts where the employee or a family member is experiencing a serious health condition.
Employees who qualify for the new benefit under the FFCRA will be eligible for 12 weeks of leave. The first 10 days can be unpaid; however, thereafter the leave is paid. The paid leave is capped at $200 per day or a total of $10,000.
Eligibility and coverage for this new, temporary benefit will be completely different from the rest of the FMLA. The new benefit will apply to employers with fewer than 500 employees. The standard FMLA threshold of 50 or more employees does not apply. Employees will be eligible for the benefit once they have worked for the company for 30 days; not 12 months and 1,250 hours in the last 12 months.
Notice requirements are also completely different. Gone is the required 30 days’ notice when leave is foreseeable. For this new FFCRA benefit, the employee must only provide “as much notice as is practicable.”
Employers who have fewer than 25 employees will not be required to reinstate the employee when the position no longer exists because of economic conditions or changes in operating conditions caused by the public health emergency. Even in this context, however, the employer will still need to show that it made reasonable efforts to restore the employee to an equivalent position and also made reasonable efforts to contact the employee if a position became available within one year.
Tax Credits to Pay for the FFCRA Leave Benefits
Under the FFCRA, a payroll tax credit will be provided to employers. It appears that the tax credit will be up to 100% of the maximum per day amounts for both the new sick leave benefit and the required paid FMLA. Thus, the tax credit is designed to cover the $511 per day maximum for the employee’s personal use of sick leave and the $200 per day maximum for its use to care for a child or family member. On the paid FMLA leave, the tax credit is designed to cover the $200 per day maximum and the $10,000 annual aggregate.
COVID-19 continues to impact the nation. As it does, the pandemic is quickly, dramatically, but temporarily changing the legal obligations of many employers. As events evolve, the Labor and Employment Practice Group at Ferguson, Schetelich & Ballew will continue to advise and assist employers on how best to address these new and challenging workplace issues.