Congress Passes Emergency Paid Leave Laws in Response to Coronavirus Pandemic

March 19, 2020 Alerts and Newsletters

On March 18, Congress passed and the President signed into law the Families First Coronavirus Response Act, a temporary measure designed to increase the availability of paid leave during a time when many employees are being directed to stay at home.

The following is a brief summary of key elements of the new law that affect employers, including two weeks of mandatory paid sick leave and expanded paid FMLA leave for employees caring for children whose school or childcare provider has been closed due to the virus. Both the paid sick leave and the expanded paid FMLA leave provisions are temporary and the requirements end December 31, 2020.

With one exception, all of the provisions described below will start on April 2, 2020, and the Department of Labor is required to issue implementation guidance before then. The requirement that all private health insurance plans cover coronavirus testing and other associated medical costs at no additional cost to covered employees is effective March 18.

Additional Mandatory Paid Sick Leave

All employers with at least one employee but fewer than 500 employees are required to provide paid sick leave to all employees, regardless of how many hours the employees work or how long they have been employed. Employees eligible for paid sick leave related to coronavirus are those who are:

  1. Subject to federal, state, or local quarantine;
  2. Being advised by a health care provider to self-quarantine;
  3. Experiencing symptoms of COVID-19 (the coronavirus disease) and are seeking a medical diagnosis;
  4. Caring for an individual who is subject to quarantine;
  5. Caring for their son or daughter whose school or childcare provider is closed or unavailable; and
  6. Experiencing any similar condition identified by the Secretary of Health and Human Services.

The paid sick leave must be sufficient to permit an employee to stay home for 14 consecutive days, based on the employee’s regular hours. For full-time employees, this means 80 hours of paid leave; part-time and variable-hour employees must be provided with leave equal to the hours they were scheduled or expected to work.

The leave must be available immediately. Employees must be permitted to use the new leave before using other paid leave. Employers may elect to exclude health care providers and emergency responders from eligibility.

The leave must be paid at the following rates:

  • Full pay capped at $511/day and $5,110 total where leave is taken for the employee’s own coronavirus diagnosis or symptoms, or because a federal or state official or health care provider deems the employee’s presence to create a risk for others because of the employee’s exposure or symptoms (items 1-3 above).
  • Two-thirds pay capped at $200/day and $2,000 total where leave is taken to care for a family member who has been diagnosed, required to self-isolate, or needs to obtain medical care, or to care for a child whose school or child care provider is closed as a result of coronavirus (items 4-6 above).

The Department of Labor is directed to issue a model notice describing the leave requirements contained in the new law by March 25, which employers will be required to post at worksites.

Expanded Paid FMLA Leave

The new law expands FMLA leave to add 12 weeks of “public health emergency leave” for individuals who are unable to work or telework due to a need to care for a child whose school or childcare provider is closed or unavailable due to the coronavirus.

This new requirement applies to all employers with at least one employee but fewer than 500 employees. However, employers with fewer than 50 employees may apply to the Department of Labor for a hardship exemption if the law would “jeopardize the viability of the business as a going concern.” Additionally, employers may elect to exclude health care providers and emergency responders from eligibility for public health emergency leave.

Public health emergency leave is available to any employee who has been employed by the employer for at least 30 days, regardless of how many hours they work. The first ten days of leave are unpaid, although employees must be permitted to use available paid leave during that time. After ten days, the remainder of the 12 weeks must be paid leave, paid at not less than 2/3 of the employee’s regular pay for the employee’s usual number of hours worked, capped at $200/day and $10,000 total.

Public health emergency leave is also job-protected, meaning that an employee generally must be restored to their former position after returning from leave. However, employers with fewer than 25 employees are not required to restore employment for an employee whose position no longer exists, so long as the employer makes a good faith effort to give the employee an equivalent position.

Existing Paid Leave Policies

It is unclear whether employers may count paid sick leave under existing policies toward the paid sick leave required by the Act. More information on this issue is available in the alert authored by Verrill’s Employment & Labor Group available online here.

Paid Leave Tax Credit

To help employers pay for the new paid leave, employers are eligible for a tax credit equal to 100 percent of the amount paid to employees under these two new types of leave.

The credit is applied quarterly against the employer portion of social security taxes, and is refundable if the credit exceeds the employer’s total social security tax obligation.

Health insurance Must Cover Testing

All private health insurance plans, including insured and self-funded employer group health plans, are required to cover coronavirus testing and other medical costs associated with testing at no additional cost to the employee.

The coronavirus pandemic is rapidly changing the human resources landscape and regulatory environment that employers are facing. Please contact a member of our Employee Benefits and Executive Compensation Group if you have questions regarding the Families First Coronavirus Response Act or other concerns regarding benefits for your employees.

Firm Highlights

Blog

DOL Guidance on Missing Pension Plan Participants

The Department of Labor (“DOL”) has undertaken a nationwide compliance initiative to ensure that retirement plan participants receive the benefits that they were promised when they reach their retirement age. To that end, the...

Publication/Podcast

Employee Benefits & Executive Compensation 2020 Year-End Client Advisory

Click here to view as a PDF . This Client Advisory highlights important developments in the law governing employee benefit plans over the past year. It offers insight into what these developments mean for...

Blog

DOL Guidance on Missing Pension Plan Participants - Part II

On January 18, we published a blog post regarding new Department of Labor (“DOL”) guidance on missing plan participants. That post is available here , and describes the DOL’s guidance on Missing Participants...

Blog

IRS Notice 2021-15 Provides Clarity Regarding FSA Relief Available Under Consolidated Appropriations Act

Section 214 of the Consolidated Appropriations Act, 2021 (CAA) provides a substantial amount of flexibility for the operation of health and dependent care Flexible Spending Accounts (FSAs). The CAA did, however, leave many open...

Blog

Partial Plan Terminations – An Update

In our April 2020 post , we detailed how employee layoffs can cause a qualified retirement plan to undergo a “partial termination,” resulting in required 100% vesting of the affected employees’ benefits. As 2020...

Blog

Reporting Deferred Compensation on Form 990

Tax-exempt organizations often provide deferred compensation to their officers, key employees, and most highly compensated employees. Like current compensation payable to such employees, deferred compensation must be reported annually on Form 990, Schedule J...

Event

2021 Employment Law Annual Update Series: Part Three

Join us for the third part of our 2021 Employment Law Annual Update! The virtual series will continue through the year on the third Thursday of each month . This year, we are taking...

News

Verrill Welcomes Highly Experienced Employee Benefits and Executive Compensation Partner, William D. Jewett

(January 11, 2021) – Verrill is pleased to welcome attorney William D. Jewett to the firm as a partner in the Employee Benefits & Executive Compensation Group, resident in the firm’s Boston, Massachusetts office...

News

35 Verrill Attorneys Named 2020 Super Lawyers and Rising Stars

(November 9, 2020) – The 2020 edition of New England Super Lawyers and Rising Stars© has recognized a total of 35 Verrill attorneys for excellence in their individual areas of practice. Only the top...

Blog

Order of Benefit Deductions from Employee Pay

From time to time we field questions about the order in which deductions for various employee benefits ( e.g. , 401(k) plan elective deferrals and insurance premiums for welfare benefit plan benefits) should be...

Contact Verrill at (855) 307 0700