On March 18, Congress passed and the President signed into law the Families First Coronavirus Response Act (“the Act”), which provides temporary paid sick leave and paid FMLA leave to many workers. The Act, which goes into effect on April 2 and remains in place through December 31, will now require all employers who have less than 500 employees to provide their employees with paid sick leave and paid FMLA leave for absences relating to the COVID-19 pandemic. The Act provides for two separate types of leave: (1) paid sick leave and (2) extended paid FMLA leave.
Paid Sick Leave
Beginning April 2, employers must provide all full-time employees with 80 hours of paid sick leave which can be used when the employee cannot work remotely (telework from home) and: (i) the employee is required by federal, state, or local government order to self-quarantine because the employee has contracted COVID-19; (ii) the employee has been advised by his/her doctor to self-quarantine because the employee is at a high risk of contracting the virus; (iii) the employee has symptoms of COVID-19 and is seeking medical evaluation for the same; (iv) the employee is caring for another individual with COVID-19; or (v) the employee must care for a child under 18 years old due to the child’s school or childcare provider being closed as a result of COVID-19. Part-time employees must be provided with paid sick leave in the amount of hours that they typically work in a 2-week period for the employer, to be used for these same reasons.
This leave must be made immediately available to all employees beginning on April 2 or their date of hire, whichever is later. There is no minimum amount of time that an employee must work for the employer in order to be eligible for this paid sick leave.
The maximum amount an employer must pay an employee for this leave is $511/day if the leave is taken to care for the employee himself/herself, or $200/day if the leave is for the employee to care for someone else, including the childcare event. While employers must initially pay the sick leave for their employees, employers will be reimbursed for the paid sick leave through payroll tax credits, with employers receiving a credit for payroll taxes due at the end of a quarter in the amount of any paid sick leave that the employer pays out under the Act. While “fronting” the money for paid sick leave is not ideal for employers, particularly those that are struggling to make ends meet in light of recent disruption of business, employers will ultimately be reimbursed by the government for these amounts, thereby shifting the ultimate burden for payment of the paid sick leave away from the employer.
Extended Paid FMLA Leave
Beginning April 2, all employers who have less than 500 employees will now be subject to the FMLA for purposes of providing leave due to COVID-19. This is a brand new requirement for employers who previously were not subject to the FMLA because they did not employ at least 50 employees within a 75-mile radius. For these employers, the FMLA only applies with respect to COVID-19-related leave of absences. The FMLA remains inapplicable to employers with less than 50 employees for leave of absences for any other purpose.
Under the Act, employers must now provide employees who have worked for the employer for at least 30 days with up to 12 weeks of leave if the employee must be absent from work to care for a child under 18 years old due to the child’s school or childcare provider being closed as a result of COVID-19 and the employee cannot work remotely (telework from home). Importantly, this part of the Act does not apply to reasons (i) through (iv) described above (i.e., where the employee is absent because of his/her own COVID-19 diagnosis or quarantine or where the employee is caring for someone else with COVID-19). While the U.S. House of Representatives’ bill included circumstances (i) through (iv) in the original House bill with respect to extended FMLA leave, the U.S. Senate modified the House bill to limit the extended FMLA leave to only reason (v) above (i.e., to care for a child under 18 whose school or childcare is closed due to COVID-19).
The first 10 days of the extended FMLA leave is unpaid, though employees can use other available paid leave (e.g., sick leave, vacation, PTO) for this portion of the leave period. The remaining 10 weeks of leave would then be paid by the employer at the rate of 2/3 of the employee’s regular rate of pay. Like the Paid Sick Leave provision, there is also a cap of $200/day and $10,000 in total for any leave under this extended FMLA provision. Again, while the employer must initially pay for this leave out of pocket, the employer will ultimately be reimbursed through payroll tax credits for any amounts that the employer pays out for extended FMLA leave under the Act.
The Act also provides a mechanism for employers with fewer than 50 employees to apply to the Department of Labor for an exemption from the requirements of the Act if providing the paid leave would jeopardize the viability of the business. However, there is not yet any guidance as to how to go about applying for the exemption, nor is there any indication of how long the process of applying for the exemption would take. In many cases, it may be more cost effective for an employer to just go ahead and pay the leave, rather than spending time and resources applying for a waiver.
Because the Act is new and regulations have not yet been implemented by the Department of Labor with respect to the same, there are many unanswered questions and likely many practical nuances that have not yet been thought through by Congress or by the Department of Labor. As such, employers must stay up to date and informed as we all continue to navigate and wade through these uncertain and difficult times. Employers with questions or who need assistance with this or any other employment matters can contact Theresa A. Phelps or John J. Gazzoli, Jr. at Rosenblum Goldenhersh, P.C.