On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“Coronavirus Response Act”) into law. This post is focused on two provisions that will be of particular importance to employers.
EMERGENCY EXPANSION OF THE FAMILY AND MEDICAL LEAVE ACT
Under a portion of the Coronavirus Response Act called The Emergency Family and Medical Leave Expansion Act (“Emergency FMLA Leave”), between April 2, 2020, and December 31, 2020 qualifying employees are entitled to up to 12 weeks of job-protected leave to care for minor children whose school, or other care provider, is closed due to COVID-19 precautions.
Which employees qualify for Emergency FMLA Leave?
Emergency FMLA leave is available to a larger pool of employees than other types of FMLA leave. Employees are entitled to Emergency FMLA Leave if they:
— Work for an employer with fewer than 500 employees
Generally, only employers who have 50 or more employees (and public employers of any size) are required to provide their employees with FMLA leave. However, all employers with fewer than 500 employees are required to provide Emergency FMLA Leave, subject to the exemptions discussed below.
— Have worked for their current employer for at least 30 days before the first day of leave is taken
Generally, in order to qualify for FMLA leave, an employee must have worked for his or her employer for a minimum of 1,250 hours in the calendar year preceding the leave. However, now employees seeking Emergency FMLA Leave need only have worked for the employer for 30 days prior to the first day of leave.
— Are unable to work or telework due a need to care for their minor child(ren) if the child(ren)’s school or place of care is closed or the child(ren)’s care provider is unavailable due to a public health emergency.
Are any employees or employers exempt from Emergency FMLA?
The law gives the Secretary of Labor the authority to issue regulations that would:
— Exclude some health care providers and emergency responders from the definition of “eligible employee;” and
— Exempt small businesses (those with less than 50 employees) from providing Emergency FMLA Leave if providing the leave would “jeopardize the viability of the business as a going concern.”
The Secretary of Labor has neither issued any such regulations, nor indicated if or when such regulations may be forthcoming, so we are not certain at this point which businesses might qualify for an exemption (or on what basis).
Are employers required to pay employees who take Emergency FMLA leave?
Yes (unlike regular FMLA leave that is taken for other reasons and is unpaid).
Emergency FMLA Leave may be unpaid for the first 10 days, though employees are entitled to use accrued paid leave during this time. Additionally, employees may elect to use Emergency Paid Sick Leave (discussed below) during this initial 10-day period.
After the first 10 days, employers must generally pay full-time employees 2/3 (or 67%) of the employee’s regular rate of pay for the number of hours the employee would normally be scheduled to work. For employees who work part-time or irregular schedules, the paid leave entitlement is based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA Leave. If an employee has worked for the employer for less than six months, his or her pay during Emergency FMLA Leave is based on the employee’s reasonable expectation of the average number of hours the employee would usually be scheduled to work at the time of hiring.
Note: The law caps the amount of paid leave to which employees are entitled at $200 per day and $10,000 total, per employee.
Are employers required to allow employees who take Emergency FMLA Leave to return to work at the conclusion of the leave?
Employers with 25 or more employees must restore employees who took Emergency FMLA Leave to the same job or to an “equivalent job,” just as if the employee had taken FMLA for any other reason.
On the other hand, employers with less than 25 employees are not required to return employees to work after Emergency FMLA Leave if the employee’s position no longer exists due to changed economic or other circumstances as a result of a “public health emergency” during the time of the employee’s leave. To quality for this exclusion, the employer must make “reasonable efforts” to return the employee to an equivalent position and continue to do so for one year following the employee’s Emergency FMLA Leave.
EMERGENCY PAID SICK LEAVE
Under a portion of the Coronavirus Response Act called the Emergency Paid Sick Leave Act (“Emergency Paid Sick Leave”), between April 2, 2020, and December 31, 2020, qualifying employees are entitled to take up to 80 hours of paid sick leave.
Which employees qualify for Emergency Paid Sick Leave?
Employees are entitled to Emergency Paid Sick Leave where:
— His or her employer employs fewer than 500 employees; and
— The employee is unable to work (or telework) due to a need for leave because:
- 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 someone who is subject to a quarantine or isolation order or has been advised by a health provider to self-quarantine due to COVID-19 related concerns;
- the employee is caring for a child whose school or place of care is closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions; and/or
- 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.
Emergency Paid Sick Leave is available for immediate use by employees upon hire, regardless of how long the employee has been employed by an employer.
Are any employees excluded?
Yes. Employers that employ health care providers or emergency responders may elect to exclude such employee from this Emergency Paid Sick Leave entitlement.
How much Emergency Paid Sick Leave can employees take?
— Full-time employees
Full-time employees are entitled to 80 hours of Emergency Paid Sick Leave.
— Part-time employees
Part-time employees, or those who work irregular schedules, are entitled to be paid based on the average number of hours the employee worked for the six months before taking Emergency Paid Sick Leave. For employees who have worked for less than six months prior to taking Emergency Paid Sick Leave, employers should calculate pay based on the average number of hours the employee would normally be scheduled to work over a two-week period.
Are employees entitled to receive their full pay while taking Emergency Paid Sick Leave?
Employees are entitled to be paid at their regular rate of pay if the leave is taken for reasons 1, 2, or 3 above, up to a cap of $511 per day (up to $5,110 total) per employee. If the leave is taken for reasons 4, 5, or 6 above, employees are entitled to be paid at two-thirds of their regular rate of pay, up to a cap of $200 per day (up to $2,000 total) per employee.
Does any unused Emergency Paid Sick Leave carry over to the next calendar year?
Can an employer require an employee to find a replacement to employee to cover the hours during which he or she is using Emergency Paid Sick Leave?
If an employee has other accrued paid leave available, can employers require employees to use such leave before using Emergency Paid Sick Leave?
WHO IS GOING TO PAY FOR ALL THIS LEAVE?
Employers who are required to provide Emergency FMLA Leave and/or Emergency Paid Sick Leave will be eligible to receive payroll tax credits equal to 100 percent of the qualified leave paid by the employer.
For both Emergency FMLA Leave and Emergency Paid Sick Leave, the total amount of an employer’s tax credit is limited to the total amount paid to all eligible employee who took the leave. Plus, only certain payroll tax categories can be credited. To get a tax credit, of course, the business has to have incurred the tax. We expect that many businesses will have substantially more expenses associated with this new leave than they have payroll tax obligations, so those businesses will not get a dollar-for-dollar offset. Those businesses will end up paying out-of-pocket because they don’t have enough tax obligation to offset their leave expenses.
The Secretary of the Treasury has been tasked with developing regulations/guidance to implement this section, so until that arrives we are recommending that employers speak with their CPAs or tax attorneys for more information.
We expect that additional legislation impacting employees and employers will be passed in the coming days and weeks by both the federal government and the State of California. Employers should confer with legal counsel regularly, and check back here for additional blog posts, to ensure that they have the most up-to-date information. Stay safe everyone!