On March 18, 2020, the Senate and House passed, and the President signed into law, one of several pieces of federal legislation in response to the Coronavirus/COVID-19 outbreak. The “Families First Coronavirus Response Act” requires employers with less than 500 employees to provide 12 weeks of paid leave for the reasons and at the rates discussed below. It also provides corresponding tax credits to employers.
Emergency Paid Sick Leave Act
Under the Emergency Paid Sick Leave Act, the employer must provide 80 hours of paid sick leave to full-time employees (or a pro-rated amount for part-time employees) at the rates below for any of the following reasons related to COVID-19: (1) the employee is subject to a federal, state, or local quarantine or isolation order; (2) the employee has been advised by a health care provider to self-quarantine; (3) the employee is experiencing symptoms and seeking a medical diagnosis; (4) the employee is caring for an individual who is quarantined due to exposure or symptoms; (5) the employee is caring for a child whose school has been closed or childcare provider is unavailable; or (6) the employee is experiencing any other substantially similar condition. Employers must provide this paid leave to all qualifying employees, regardless of the length of time that they have worked for the employer. This leave is in addition to other required sick leave under state or local laws and any sick leave already provided pursuant to the employer’s sick leave policies. Employers may not require an employee to use any other paid leave prior to using this leave.
For employees taking leave for their own health condition, paid sick leave must be paid at the employee’s regular rate of pay, but shall not exceed $511 per day, or $5,110 in the aggregate. For employees taking leave to care for a family member, paid sick leave may be paid at two-thirds of the employee’s regular rate of pay, but may not exceed $200 per day, or $2,000 in the aggregate. An employer may not require an employee to find someone to cover for the employee during the employee’s leave. Employers who violate this law will be considered to have violated minimum wage laws under the Fair Labor Standards Act. Employers cannot discriminate or retaliate against employees for taking this leave.
Employers must provide notice of the Emergency Paid Sick Leave Act, which will be available on the Department of Labor website by March 25, 2020.
Emergency Family and Medical Leave Expansion Act
Under the Emergency Family and Medical Leave Expansion Act, employers with less than 500 employees must provide 12 weeks of paid leave to employees who have been employed for at least 30 calendar days if they are unable to work (or telework) due to a need to care for their child under the age of eighteen whose school or childcare facility has been closed, or whose childcare provider is unavailable, due to COVID-19. For the first ten days, the employee is entitled to pay under the Emergency Paid Sick Leave Act discussed above. After the first ten workdays, the employer shall provide at least 2/3 of the employee’s regular rate of pay. However, the paid leave shall not exceed $200 per employee per day or $10,000 per employee in the aggregate.
The employee is required to provide notice of their request for leave if practicable and if the leave is “foreseeable.”
Generally speaking, employers must restore employees to their positions after their leave, but employers with fewer than 25 employees may be exempt from this requirement if the position held by the employee prior to leave no longer exists as a result of COVID-19, and the employer makes reasonable efforts to transfer the employee to a comparable position, or if no comparable position exists, the employer makes reasonable efforts to contact the employee when an equivalent position opens.
The legislation provides that the Secretary of Labor shall have the authority to issue regulations to exempt healthcare providers and emergency responders from both paid leave statutes discussed above. The legislation also provides that the Secretary of Labor shall have the authority to issue regulations to exempt employers with fewer than 50 employees from the paid leave statutes discussed above when the imposition of the above paid sick leave requirements will jeopardize the viability of the business. However, as of the date of this E-Blast, the Department of Labor has not issued any regulations to exempt small businesses from the above requirements.
Employers can seek a refundable tax credit for the paid leave provided under the Emergency Paid Sick Leave Act and the Family and Medical Leave Expansion Act for each calendar quarter, which reduces the amount of Social Security taxes owed by the employer. If the tax credit exceeds the amount of Social Security taxes owed by the employer, the employer will receive a refund.
Call Hill Farrer for Further Questions
The legislation, which is very detailed, also has provisions relating to how employers with multiemployer collective bargaining agreements can comply with the above laws, unemployment insurance, additional tax credits related to employer health plans, and more. Please contact your Hill Farrer attorney or any member of our Labor and Employment department to discuss how the new legislation may affect your business and your employees.