Employer Obligations under the Revised Families First Coronavirus Response Act (H.R. 6201)

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “Act”) in response to COVID-19. Among other provisions, the Act gives a broad group of employees the right to emergency paid sick leave and also expands protections under the Family and Medical Leave Act (“FMLA”). This summary focuses on the impact to most private employers from the paid sick leave and expanded FMLA provisions, which take effect on April 2, 2020. Further guidance for employers in the form of regulations from the Department of Labor and Internal Revenue Service is expected.

Summary of the Act’s impact on employers:

Paid Family Medical Leave (Amendments to the FMLA of 1993). The Act expands the FMLA to provide “Special Public Health Emergency Leave,” as follows:

• The Act provides 12 weeks of job-protected FMLA leave for employees of employers with fewer than 500 employees for certain qualifying needs, described below. It is important to emphasize that the Act applies to smaller employers with fewer than 50 employees — federal FMLA coverage normally applies to employers with 50 or more employees. In addition, the ACT is not applicable to private employers that employ 500 or more employees, presumably on the basis that such large employers voluntarily will provide equal or greater benefits.
• The first 10 days of any leave will be unpaid, unless the employee chooses to substitute paid leave (including the Paid Sick Leave discussed below). After the 10-day exclusion, employees must be paid at two-thirds of their regular rate for the regular number of hours the employee would have been scheduled to work. If the employee works a varying schedule, the employer should use an average number of hours the employee was scheduled per day over the six month period preceding the leave. Paid leave is capped at $200.00 per day and $10,000.00 in the aggregate.
• This leave benefit covers employees who have been working for at least 30 calendar days.
• “Qualifying Need” for Leave: leave is available to an employee who is unable to work (or to telework) due to a need to care for a son or daughter (under 18 years of age) whose school or place of care has been closed, or whose childcare provider is unavailable, due to a public health emergency, which is defined as an emergency with respect to COVID-19 declared by a federal, state or local authority. (Note that the reasons for allowable leave are significantly narrower than the original House Bill that was widely reported in the media.)
• The Act does not expand the standard 12-week per 12-month FMLA entitlement. So, if employees have used leave for other FMLA-qualifying reasons, they will not be able to go beyond a combined 12 weeks. However, for smaller employers who were not previously covered by FMLA (threshold of 50 employees), the full 12 weeks will be available for all eligible employees.
• The Secretary of Labor is authorized to exempt employers with fewer than 50 employees from the paid sick leave requirements where the requirements would “jeopardize the viability of the business as a going concern,” but there is no further guidance as to how or whether the Secretary would exercise this authority.
• Employers that employ health care providers and emergency responders may elect to exclude such employees from the paid sick leave requirements of the Act.
• The FMLA’s requirement that an employee be restored to the same or equivalent position after leave does not apply to an employer with fewer than 25 employees if the employee’s position no longer exists due to economic conditions or other changes in the employer’s operations that affect employment and are caused by the public health crisis during the period of leave.
• The employer must make reasonable efforts to restore the employee to the same or an equivalent position, and if the reasonable efforts fail, the employer must make efforts to contact the employee and reinstate the employee if an equivalent position becomes available within a one-year period beginning on the earlier of (a) the date on which the qualifying need related to a public health emergency concludes, or (b) the date that is 12 weeks after the date the employee’s leave started.
• Employers who are signatories to a multi-employer bargaining agreement may be able to fulfill the obligations of the Act by making contributions to the multi-employer fund, plan or program, provided the fund enables employees to secure pay from such fund based on the hours worked under the multi-employer collective bargaining agreement.
• The provisions will go into effect 15 days after the date of enactment, presumably on April 2, 2020, and expire on December 31, 2020.

Paid Sick Leave

• Employers with fewer than 500 employees will be required to provide full-time employees 2 weeks (80 hours) of paid sick leave for specific circumstances related to COVID-19.
• Part-time employees are entitled to the number of hours of paid sick time equal to the typical number of hours they work in a typical two-week period. If the employee works a varying schedule, the employer should use an average number of hours the employee was scheduled per day over the six month period preceding the leave to determine the average number of hours worked per week and provide 2 weeks at that rate.
• Required reasons for sick leave:

1. the employee is subject to a quarantine or isolation order related to COVID-19;
2. the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
3. the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
4. the employee is caring for an individual who is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
5. the employee is caring for his or her son or daughter because the school or place of care for the son or daughter has been closed, or the child care provider of the son or daughter is unavailable, due to COVID-19 precautions; or
6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

• For reasons 1-3 above, employers must provide leave at the employee’s regular rate, capped at $511 per day per employee and $5,110 in the aggregate. For reasons 4-6 above, leave is compensated at two-thirds the employee’s regular rate, capped at $200 per day per employee and $2,000 in the aggregate.
• Paid sick leave must be made available to all employees immediately, regardless of how long the employee has been employed.
• The Act is somewhat unclear about whether employers may count paid sick leave they presently provide their employees toward the leave required by the Act. The amendments to the prior House Bill removed the clause stating that this emergency sick leave would be in addition to any other existing paid leave a covered employer provided prior to the passage of the law. Hopefully, the DOL will provide additional guidance for employers on this topic quickly. The Act states that employees may elect to substitute any accrued, paid leave otherwise available under an employer’s existing policies, but employers are prohibited from requiring employees to use other paid leave before they may use the leave afforded to them by the Act.
• Employers that employ health care providers and emergency responders may elect to exclude such employees from the paid sick leave requirements of the Act.
• The Secretary of Labor is authorized to exempt employers with fewer than 50 employees from the paid sick leave requirements where the requirements would “jeopardize the viability of the business as a going concern,” but there is no further guidance as to how or whether the Secretary would exercise this authority.
• Employers are not required to pay an employee at the time of termination or resignation for any unused time provided by the Act.
• The sick leave provisions will alsogo into effect 15 days after the date of enactment (presumably April 2, 2020) and expire on December 31, 2020.

How Will Employers Pay?

Employers would receive tax credits for benefits paid pursuant to the Act (a credit against the employer’s portion of Social Security taxes).

As noted part above, the Act contains special provisions for employers who are part of a multi-employer collective bargaining agreement.

As with all aspects of COVID-19, this is a fluid and rapidly changing environment and employers should closely monitor developments concerning the Act. If you have any questions related to the provisions of the Act, please contact a member of Verrill’s Employment & Labor Group.