Families First Coronavirus Response Act: What are your obligations for paid and unpaid leave?
The Associated General Contractors kicked off its eight-part “Navigating the Outbreak” webinar series on March 23 with the first topic: “What are your federal and state legal obligations to provide paid and unpaid leave?” Patricia Anderson Pryor and Leslie Stout-Tabackman from law firm Jackson Lewis P.C. shared some of the highlights from H.R. 6201, the Families First Coronavirus Response Act, that President Trump signed into law on March 18, and what it means for companies.
The legislation is slated to take effect April 1 and is set to last until the end of 2020. Per the act’s stipulations, employers are required to provide some paid relief for employees, but employers may apply for tax credits on a quarterly basis that will pay them back dollar for dollar. The existing legislation, however, has several gaps and unknowns that Stout-Tabackman says subsequent legislation or regulation may address.
Private employers with fewer than 500 employees and certain public employers are subject to the law. U.S. Department of Labor regulations may exempt small businesses with fewer than 50 employees if the provision would jeopardize the viability of the business as a growing concern. Subsidiaries and parent companies likely will not be counted toward an individual company’s 500 employee figure.
Here are three highlights from the act.
Emergency FMLA expansion
The act expands and amends the existing Family and Medical Leave Act so that it covers many who wouldn’t qualify for FMLA under its current standards. Employees need to have been employed for only 30 calendar days (as opposed to the 12 months FMLA requires). Employees may take this leave only if they meet a qualifying need related to a public health emergency, defined as COVID-19, and they:
- Cannot work regularly from home or telework
- They must have a child under the age of 18
- The child’s school or daycare must be closed
- A public health emergency must have been declared by a federal, state or local authority
Even if the employee can telework but is unable to perform their job duties because of lack of childcare, the employee may still qualify for that leave, says Pryor.
If qualifications are met, an employee can get up to 12 weeks of leave, the first 10 days of which are unpaid, though the employee can use PTO during that time. During subsequent weeks off, the employer must be paid at 2/3 their regular rate of pay, which is capped at $200 per day and $10,000 in aggregate per employee.
If an employer has fewer than 25 employees and if a given employee’s position no longer exists due to economic conditions or other conditions in the employer’s operations that affect employment that are caused by the public health crisis during the period of leave, they may be exempt. However, the employer must make reasonable efforts to restore the position and, if those efforts fail, the employer must continue to make reasonable efforts for a one-year period.
Employees who wish to take family leave must provide “notice of leave as is practicable.”
Emergency Pay Sick Leave
Paid sick leave applies to all employees under a covered employer, including full-time, part-time, exempt and non-exempt employees.
Qualifying reasons to take sick leave include:
- 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 healthcare provider to self-quarantine due to concerned related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to points one or two.
- The employee is caring for a son or daughter if the school or place of care has been closed due to COVID-19.
- 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.
Full-time employees are entitled to 80 hours of sick leave and part-time workers qualify for an equivalent of the average number of hours they work over a two-week period. At this time, employees on furlough do not qualify for this leave, but Stout-Tabackman says specifics around furloughed employees may be further defined in regulation.
Although several states enacted shelter-in-place requirements, shelter-in-place is not technically quarantine or isolation and, as the law is currently written, “It doesn’t look like a shut down for that reason would trigger the paid leave requirement,” says Stout-Tabackman.
If an employee takes sick leave for their own health, it is paid at the employee’s regular rate and capped at $511 per day and $5,110 in aggregate. Taking sick leave to care for others is paid at 2/3 the regular rate and capped at $200 per day and $2,000 in aggregate. Commissions and bonuses should be calculated into the “regular rate of pay,” says Stout-Tabackman.
Who pays?
The big question employers ask is: Who is paying for this sick time and FMLA leave? Initially, the employers themselves will. However, employers can take advantage of refundable payroll tax credits to immediately and reimburse dollar-for-dollar the cost of providing that leave.
Tax credits will not be retroactive; companies may apply for the tax credits after the legislation takes effect April 1. Pryor says that regardless, employers should provide leave now if people need it, but cautions against providing pay until the Secretary of Treasury announces the tax credits are active.
It’s also unclear about how much documentation an employee is required to submit to prove they have qualifying events. Pryor predicts it will be hard to get much documentation but that some information, such as school closings, are public information. Even doctor’s notes could be challenging to obtain. The Ohio Governor, for example, told employers to stop asking for doctor notes. “But you want that employee to stay home if they have symptoms,” Pryor says.
