Everything You Need To Know Right Now
After a “warp speed” Senate vote overwhelmingly approving the Families First Coronavirus Response Act (FFCRA), President Trump signed the FFCRA into law yesterday. The legislation is historic; it was not only enacted in days instead of the usual months, but for the first time in US history, many private employers must provide US-based employees with paid sick leave (up to 80 hours) and paid family care leave (up to 10 weeks) for COVID-19-related purposes.
The FFCRA fundamentally alters the leave entitlements available to most American workers. And while the cost of these entitlements ultimately will be borne by the federal government through offsetting employer tax credits, employees impacted by COVID-19 have a significant new safety net into which to fall.
Much about the FFCRA is uncertain, but one thing is clear: employers must act quickly because they have only 15 days to understand and implement the FFCRA’s paid leave requirements, as those provisions take effect April 2, 2020.
To help you prepare, our latest FAQ summarizes the new Act’s requirements, explains its mandates, and highlights what’s changed since our original client alert on the FFCRA.
Q: Give me the basics. What does the FFCRA require?
A: The FFCRA mandates employer-paid sick leave and partially-paid family care leave, offset by tax credits. The Act also includes federal funding and waivers for free COVID-19 testing, food and nutrition assistance programs, and state unemployment insurance programs.
The paid sick leave provisions of the FFCRA are contained in the Emergency Paid Sick Leave Act (EPSLA). The family care leave provisions are found in the Emergency Family and Medical Leave Expansion Act (EFMLEA).
Both the EPSLA and the EFMLEA apply to private employers who engage in commerce and who have fewer than 500 employees and to certain government employers. Large employers (500 or more employees) are excluded from both Acts. It is not yet clear how, or if, different business units or subsidiaries may be grouped together for employee headcount purposes, although it is likely that the “integrated employer” and “joint employer” tests used under the Family and Medical Leave Act (FMLA) will apply to the EFMLEA provisions.
The Secretary of Labor is authorized to issue regulations excluding employers with 50 or fewer employees from the EFMLEA and EPSLA for “good cause” when the imposition of such requirements would jeopardize the viability of the business as a going concern. Employers of health care providers or emergency responders may elect to exclude such employees from both Acts.
The EPSLA provides up to 10 days (80 hours) of paid sick leave when employees must miss work for COVID-19-related purposes.
The EFMLEA expands the FMLA to provide up to 12 weeks of FMLA leave for employees who are unable to work (or telework) because of childcare needs caused by COVID-19. The first 10 days of FMLA COVID-19 childcare leave are unpaid. The remaining childcare leave (50 additional days for an employee who works a 40 hour schedule) is paid at a percentage of the employee’s regular wages.
The EPSLA and the EFMLEA each sunset (expire) on December 31, 2020.
Q: Tell me more about the paid sick leave law. What does the EPSLA require?
A: Covered employers must provide emergency paid sick leave to employees who are unable to work or telework because they:
- Are subject to a Federal, State or local quarantine or isolation order related to COVID-19;
- Have been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- Are experiencing COVID-19 symptoms and seeking a medical diagnosis;
- Are caring for an individual (not just family members) subject to a quarantine order, or who has been advised by a health-care provider to self-quarantine;
- Are caring for a son or daughter when the child’s school or place of care has closed, or the child’s child care provider is unavailable, “due to COVID-19 precautions” (a different standard than the “public health emergency declared by a Federal, State, or local health authority” discussed below for COVID-19 FMLA leave); or
- Are 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.
Employers must provide 80 hours of paid sick leave (10 work days) for full time employees. Part time employees are entitled to a prorated amount of paid sick leave calculated using their average hours worked over a two-week period.
Emergency paid sick leave is capped at $511 per day and $5,110 in the aggregate when used for the employee’s own well-being (subparagraphs 1, 2, and 3, above), and $200 per day and $2,000 in the aggregate when used for family or child care (subparagraphs 4, 5, and 6).
Employers cannot require the use of other paid leave before the employee utilizes EPSLA paid sick leave. And employees do not need to find replacement workers to cover shifts they miss while using EPSLA leave.
EPSLA violations are considered violations of the minimum wage provisions of the Fair Labor Standards Act (FLSA). The EPSLA also prohibits discrimination, discipline, or discharge of employees who use sick leave or file a complaint under EPSLA.
The EPSLA extends paid sick leave benefits to employees who work under a multiemployer collective bargaining agreement and whose employers pay into a multiemployer plan.
Unused sick leave does not carry over from year to year, and need not be paid out on termination of employment.
Finally, the FFCRA authorizes employer tax credits for qualified sick leave wages paid by an employer. The credits are allowed against the employer’s portion of Social Security taxes, and are subject to the same caps on daily dollar amounts and aggregate days as the required sick leave payments.
Q: Tell me about paid family care leave. What does the EFMLEA require?
A: The EFMLEA expands the FMLA by authorizing eligible employees to take up to 12 weeks of job-protected “public health emergency leave” when needed to care for a son or daughter under 18 years of age if the child’s school or place of care has closed, or the child’s child care provider is unavailable, as a result of a COVID-19 health emergency declared by a Federal, State, or local authority. Employees must be unable to work or telework while caring for the child to qualify for EFMLEA leave.
The first 10 days of EFMLEA leave are unpaid, but employees may elect to use any accrued vacation leave, personal leave, or medical or sick leave during this period. The original draft of the FFCRA would have prohibited employers from requiring employees to use other paid leave during a COVID-19 FMLA leave, but that provision was deleted from the final bill, suggesting that employers may follow the general rule permitting the required use of paid vacation, PTO, personal or family leave during COVID-19 FMLA leave, but not the use of paid sick leave (which may only be required under the FMLA during a leave for the employee’s own serious health condition). As a practical matter, the grant of 10 days of EPSLA paid sick leave means that employees will not need to use their other accrued leave balances during the first 10 days of EFMLEA leave.
Following the 10 days of unpaid leave, an employee must be paid for the remainder of the EFMLEA leave in an amount that is not less than two-thirds of the employee’s regular rate of pay (as determined under the FLSA) multiplied by the number of hours the employee would otherwise normally be scheduled to work, but capped at $200 per day and $10,000 in the aggregate. Employees who work varying schedules may be paid based using the average number of hours the employees were scheduled per day over the prior six-month period or, if the employees did not work in that period, the reasonable expectation of the employees at the time of hiring of the average number of hours per day that the employees would be scheduled to work, also subject to the caps.
The EFMLEA increases the number of employees eligible to take COVID-19 FMLA leave. While traditional FMLA leave remains limited to employees who have been employed for at least 12 months and 1,250 hours of service, the EFMLEA grants COVID-19 FMLA leave to any employee who has been employed by a covered employer for 30 calendar days. This broader definition of “employee” grants FMLA protection to significantly more employees, including newly hired, temporary, part time, and seasonal employees (as long as they have been employed for at least 30 calendar days). The original, more restrictive definition of “employee” remains in place for traditional FMLA leave types.
Similarly, the EFMLEA both expands and limits the number of companies subject to COVID-19 FMLA leave by changing the definition of “employer” from “any person engaged in commerce or in any industry or activity affecting commerce who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year” to “any person engaged in commerce or in any industry or activity affecting commerce who employs fewer than 500 employees.”
The new law contains important exceptions for small businesses and healthcare workers. First, employers with less than 25 employees need not guarantee job reinstatement at the end of a COVID-19 FMLA leave if the employee’s position is eliminated as a result of economic conditions caused by a public health emergency, but employers must make a reasonable effort to restore the employee to an “equivalent” position upon leave expiration, and if no equivalent position is available, make reasonable efforts to contact the former employee if an equivalent position becomes available in the following 12 months. Job reinstatement guarantees remain for larger employers and traditional FMLA leave types.
Second, the Labor Secretary is authorized to issue regulations excluding certain health care providers and emergency responders from the definition of employees eligible to take COVID-19 leave and exempting businesses with fewer than 50 employees from the paid leave requirement if offering such leave would jeopardize the viability of the business as a going concern.
Certain multi-employer paid leave benefit plans will have to allow employees to take paid leave for the childcare reason specified in the EFMLEA. Employers who contribute to multi-employer benefit plans which provide employees paid leave based on the employees’ hours worked will meet their obligation to provide paid COVID-19 FMLA leave by making the contractually described contributions to that plan.
Q: What changed from the first version of the bill?
A: The House of Representatives approved an earlier version of the FFCRA on March 15, 2020, as described in our previous alert. The House then made numerous “technical corrections,” most of which are substantive, to the bill before sending it to the Senate. The changes include:
- In addition to childcare leave, the original version of the EFMLEA would have permitted employees to take leave if necessary to comply with a recommendation or order of a public health official or health care provider that the physical presence of the employee on the job would jeopardize the health of others because of the exposure of the employee to COVID-19 or the employee’s exhibition of COVID-19 symptoms, or to care for a family member if a public health official or a health care provider determines that the family member’s presence in the community would jeopardize the health of others because of COVID-19 exposure or symptoms. Both of these permitted purposes were eliminated from the final bill.
- The final bill specifies that an employee seeking paid time COVID-19 FMLA leave must be seeking leave because of the employee’s inability to work or telework.
- The final bill reduced the unpaid EFMLEA leave from 14 days to 10 days.
- The original version would have expanded the definition of “family member” and “parent” beyond existing FMLA coverage. These expansions were removed from the final bill.
- The final bill imposed the daily and aggregate caps on paid sick leave and paid FMLA COVID-19 leave.
- The final bill allows employers of healthcare providers and emergency responders to exclude them from the EFMLEA and the EPSLA.
- The EPSLA allows employees to use sick leave to care for “any individual,” not just family members.
For more information, please visit our Coronavirus Resource Center.