Expanded FMLA and Federal Employer Paid Sick Leave

Key  Takeaways:

• The Families First Coronavirus Response Act was approved by the U.S. Senate and signed into law by President Donald J. Trump on Wednesday, March 18

• The act has two provisions providing paid leave to employees forced to miss work as a result of the COVID-19 pandemic: an expansion of the Family and Medical Leave Act and a new federal paid sick leave law

• These provisions remain in effect until December 31, 2020, and do not diminish or undermine any rights or benefits conferred upon employees on any preexisting employer policies, collective bargaining agreements, or state or local laws, to the extent applicable

The Families First Coronavirus Response Act, a statute that provides employees affected by COVID-19 additional resources and expanded paid leave, was approved by the U.S. Senate and signed into law by President Donald Trump on Wednesday, March 18. The U.S. House of Representatives initially passed the bill on March 14, before it was significantly altered on March 16. The majority of the bill’s provisions become effective no later than April 2.

[3/24/20 Editor’s Note: The president signed the legislation into effect shortly after publication of this alert, and the Department of Labor has since advanced the effective date of these provisions to April 1, 2020].

In addition to various public health provisions, the act contains many provisions that directly impact employers. Significantly, there are two provisions providing paid leave to employees forced to miss work as a result of the COVID-19 pandemic: an expansion of the Family and Medical Leave Act (FMLA) and a new federal paid sick leave law. These provisions remain in effect until December 31, 2020, and does not diminish or undermines any rights or benefits conferred upon employees on any preexisting employer policies, collective bargaining agreements, or state or local laws, to the extent applicable.

Emergency Family and Medical Leave Expansion Act (E-FMLEA)

E-FMLEA significantly amends and expands FMLA on a temporary basis, through December 31, 2020, because of COVID-19. Prior to this statute, FMLA only applied to (1) employers with 50 or more employees within a 75-mile radius; (2) employees who worked at least 1,250 hours during the 12 months immediately preceding the start of the FMLA leave; and (3) have a qualifying event occur (i.e., often times relating to a serious health condition) involving the employee or a member of the employee’s family. If these three elements are met, then an employee is entitled to take up to 12 weeks of unpaid leave, with the statutory right to be reinstated to his or her original position. If the original position is not available, the employer must make reasonable efforts to restore such employees to an equivalent position with equivalent pay, benefits, and terms and conditions of employment.

E-FMLEA, however, expands FMLA, only to the limited extent involving COVID-19-related issues, such that the new law applies to (1) any employer with fewer than 500 employees (and thus includes those employers with 1-49 employees); (2) any full-time employees who are employed by the covered employer for at least 30 days prior to the designated leave; and (3) based on a “qualifying need related to a public health emergency,” which occurs when “the employee is unable to work (or telework) due to a need for leave to care for a son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider is unavailable, due to a public health emergency.” Such eligible employees under the act may take up to 12 weeks of job-protected leave, with 10 of those weeks paid at a rate “not less than two-thirds of an employee’s regular rate of pay.” Employees have the same right of reinstatement that the existing FMLA statute provides, except that for employers with fewer than 25 employees. In this case, an employee need not be restored to his or her position if the position no longer exists due to economic conditions or changes in the employer’s operations caused by the public health emergency. The law is silent as to whether E-FMLEA applies to part-time employees.

With respect to the paid leave―the first 10 days of leave (i.e., first two weeks) may be unpaid. However, an employee may elect to use any accrued paid time off, including vacation and sick leave, to cover the initial 10-day period, but cannot be required to do so. After the 10-day period, the employer generally must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled for the remaining 10 weeks of family leave. However, the pay is capped at $200 per day or $10,000 in the aggregate per employee.

Notably, the “technical corrections” to the bill that were made over the last few days by the Senate establish additional exceptions for certain health care providers and emergency responders to “opt out” of this new law, and authorizes the Secretary of Labor to issue additional regulations clarifying the scope of these exceptions. Additionally, the Department of Labor has the authority to exempt small businesses with fewer than 50 employees from the COVID-19 leave requirements when those requirements would jeopardize the viability of the business as a going concern. As the law was just enacted, we anticipate the Department of Labor may provide further guidance on these issues soon.

A summary of E-FMLEA compared with FMLA:

Emergency Paid Sick Leave Act (E-PSLA)

The E-PLSA applies broadly to public-sector employers and to private-sector employers with less than 500 employees (i.e., 1-499 employees). Unlike the FMLA or E-FMLEA, there are no minimum hours and days that an employee must work in order to become eligible. In other words, any employee, regardless of how long they have been employed with the covered employer, is entitled to E-PLSA, so long as “the employee is unable to work (or telework).”

Eligible employees are entitled to 80 hours of paid sick leave at a certain rate of pay, depending on the type of sick leave requested, as further discussed below. This is in addition to any sick leave made available to employees under an employer’s existing policies or applicable law.

The bill identifies different scenarios in which an employee is eligible for paid sick leave under E-PLSA:

• Employees are eligible for payment at their regular rate of pay, up to a maximum of $511 per day and $5,110 in the aggregate, when the employee is:
  • Subject to a federal, state, or local quarantine or isolation order related to COVID-19
  • Advised by a health care provider to self-quarantine due to COVID-19 concerns
  • Experiencing COVID-19 symptoms and seeking medical diagnosis
• Alternatively, employers must provide an employee with 80 hours of paid sick leave at two-thirds of the employee’s rate of pay, up to a maximum of $200 per day or $2,000 in aggregate, for the following:
  • Caring for an individual subject to a federal, state, or local quarantine or isolation order
  • Caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency
  • 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

As with the E-FMLEA, exceptions are made for employees who are health care providers and emergency responders. This exception is phrased in terms of allowing the employer of such employees to “elect to exclude such employee[s]” from these provisions.

Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work over a two-week period. A business employing fewer than 500 employees is required, at the request of the employee, to pay a full-time employee for 80 hours of mandated emergency paid sick leave instead of the initial 10 days of unpaid leave permitted by the E-FMLEA (summarized above).

Any unused sick leave does not carry over to subsequent years. Employers must post notice informing employees of their rights to emergency paid sick leave. The Secretary of Labor will make publicly available a model of a compliant notice within seven days of the date of enactment.

Tax Credits for Paid Sick Leave and Expanded Family and Medical Leave

The statute provides a series of refundable tax credits for employers who are required to provide the emergency paid sick leave and the emergency paid family and medical leave described above. Specifically, employers are entitled to a refundable tax credit equal to 100 percent of qualified sick leave wages and 100 percent of qualified family leave wages, through a formula delineated in the act.

Notably, in addition to the act, many states are proposing similar emergency legislation to enact or expand their own paid sick leave or family and medical leave laws to cover coronavirus-related issues. Some of these state laws may be in addition to these new requirements at the federal level. A careful comparison and analysis between the act and any new state laws is necessary to determine which law is most appropriate to apply.

Goldberg Segalla’s Employment and Labor team will continue to monitor all updates related to the COVID-19 pandemic and its unprecedented impact on employers.

For more information, please contact:

• Peter J. Woo
• Matthew Golper
• Caroline J. Berdzik
• Or another member of our Employment and Labor practice

Visit our Coronavirus Hub for the Latest News and Analysis