On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act, H.R. 6201 (the “Act”) in response to the pressing economic concerns arising from the spread of COVID-19. The Senate passed the House bill, as modified by the House on March 16, without change. For private-sector employers with fewer than 500 employees and certain public-sector employers, the Act (1) expands coverage under the federal Family and Medical Leave Act (FMLA) and provides payment for a certain type of leave; (2) establishes the Emergency Paid Sick Leave Act to provide paid sick leave to certain employees affected by COVID-19; and (3) provides refundable tax credits to employers that are required to offer emergency FMLA or Emergency Paid Sick Leave. The FMLA and paid sick leave provisions take effect on April 1, and sunset on December 31, 2020. Separately, the new law requires private health plans to cover COVID-19 diagnostic testing, including the cost of a provider, urgent care center, and emergency room visits for such purposes, at no cost to the participant.
Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act (“Emergency FMLA”) amends the traditional FMLA for private-sector employers with fewer than 500 employees and covered public-sector employers with at least one employee. Covered employers must provide up to 12 weeks of job-protected leave for a “qualifying need related to a public health emergency,” defined to include circumstances where an employee is unable to work or telework due to a need to care for their minor child if their school or place of care has been closed, or the child’s care provider is unavailable, as a result of the COVID-19 public health emergency. Employees are eligible for the leave if they have been on the payroll for at least 30 calendar days prior to the need for leave, which is significantly less time than what is required for eligibility under the traditional FMLA.
The first 10 days of Emergency FMLA leave is unpaid, although employees can (but are not required to) use accrued vacation or personal leave to receive pay during this period, or may use other paid sick leave, including under the Emergency Paid Sick Leave Act described below. For the balance of the leave up to ten weeks, the employer must pay the employee at two-thirds of the employee’s regular rate of pay, capped at $200 per day and $10,000 in the aggregate.
At the conclusion of leave, as is traditionally required under the FMLA, the employer must restore an employee to their prior position or an equivalent position. Employers with fewer than 25 employees may be exempt from the restoration requirement if the employee’s position no longer exists for economic or other conditions related to COVID-19, and if the employer has made reasonable efforts to restore the employee to an equivalent position for up to a year after the leave was taken.
Notably, leave taken under the Emergency FMLA differs from traditional FMLA leave in significant ways. FMLA traditionally applies to employers that employ 50 employees within a 75-mile radius. As explained above, the Emergency FMLA now requires employers with fewer than 500 employees, including those who might not otherwise be covered under the traditional FMLA, to provide job-protected leave for the stated purpose. The Emergency FMLA also affords different exemptions than the traditional FMLA. In addition to the job-restoration exemption for employers with fewer than 25 employees who meet the criteria described above, the Emergency FMLA provides that the U.S. Secretary of Labor has the authority to exempt employers with fewer than 50 employees from all of the requirements of the new law. Employers of health care providers and emergency responders may also exclude employees from these leave provisions. Additionally, while employees are eligible for traditional FMLA leave only if they have been employed for at least a year and worked at least 1,250 hours during the 12 months prior to the leave, Emergency FMLA is available to employees who have been employed for just 30 days. Finally, employers should note that leave taken by employees for reasons defined by the traditional FMLA (self-care or care of a family member with a serious health condition, or parental leave) remains unpaid.
Emergency Paid Sick Leave Act
The Emergency Paid Sick Leave Act (the “Paid Sick Leave Act”) requires private-sector employers with fewer than 500 employees, as well as public agencies and non-private entities or individuals that employ at least one employee, to provide employees with paid sick time for immediate use, regardless of the employee’s length of service, when the employee is unable to work for certain reasons related to COVID-19. The Paid Sick Leave Act makes a hardship exception available for employers with fewer than 50 employees.
This new paid sick leave may be used when an employee is unable to work or telework because the employee:
- Is subject to a federal, state or local quarantine or isolation order related to COVID-19;
- Has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
- Is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- Is caring for an individual who is subject to an isolation or quarantine order or because the individual has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
- Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
- 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.
Full-time employees are entitled to two weeks of paid sick leave (80 hours), and part-time employee are eligible for an amount equal to the number of hours that the employee works on average in a two-week period or was reasonably expected to work at the time of hire. When the leave is for the employee’s own quarantine, symptoms, or order to avoid the workplace, the leave must be paid at the employee’s regular rate of pay or minimum wage under federal or state/local law, whichever is greater, up to $511 per day and $5,110 in the aggregate. Where the leave is to care for a family member or child, the leave is paid at two-thirds of the employee’s regular rate of pay or minimum wage under federal or state/local law, whichever is greater, up to $200 per day and $2,000 in the aggregate. Unused paid sick time under the Paid Sick Leave Act will not carry over, since the law expires at the end of this calendar year.
Job protections provided by the Paid Sick Leave Act prohibit employers from:
Employers must post a notice, to be prepared by the Secretary of Labor, describing the requirements of the Paid Sick Leave Act, or be subject to employer penalties established under the Fair Labor Standards Act.
Tax Credits for Emergency FMLA Leave and Paid Sick Leave
Employers that are required to provide leave under the Families First Coronavirus Response Act will receive refundable tax credits. As described in further detail by our colleagues here, these tax credits are applied against the employer’s share of Federal Insurance Contributions Act (FICA) taxes.
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