Paid Leave Provisions of the Families First Coronavirus Response Act

NOTE: This memorandum summarizes certain congressional actions in response to the COVID-19 situation, and has been last updated as of [post_published]. Congressional response changes rapidly, sometimes daily. This memorandum is for informational purposes only and should not be relied on as the sole basis for any actions related to the matters discussed herein. Please contact us for the latest information and to discuss your options.

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The federal Families First Coronavirus Response Act (“FFCR Act”) was enacted on March 18, 2020. This Act contains two provisions requiring paid leave for employees: the “Emergency Family and Medical Leave Expansion Act” and the “Emergency Paid Sick Leave Act” (collectively, the “Paid Leave Acts”).

The Paid Leave Acts are summarized below. These summaries have been updated to reflect the amendments to the Paid Leave Acts included in the “Coronavirus Aid, Relief, and Economic Security Act” (the “CARES Act”) as enacted on March 27, 2020.

Provisions Applicable to Both Paid Leave Acts

  • Effective Date and Duration: The Paid Leave Acts will become effective on April 1, 2020, and will expire on December 31, 2020. They will apply to leaves taken during this period.
  • Employer Coverage: Employers that must comply with the Paid Leave Acts include: (i) private entities or individuals that employ fewer than 500 employees and (ii) certain public agencies.
  • U.S. Department of Labor Guidance: The U.S. Department of Labor has begun to issue interpretive guidance for employers concerning the implementation of the Paid Leave Acts. Portions of this guidance that may be found here, here, and here. (The U.S. Department of Labor’s guidance and directives are expected to be updated periodically.)
  • Posting of Notice: Covered employers are required to post, in conspicuous places on the premises where notices to employees are customarily posted, a notice concerning the requirements of the Paid Leave Acts. A copy of this poster may be found on the U.S. Department of Labor’s website here. The U.S. Department of Labor has also prepared a FAQ sheet concerning these notices, which may be found here. (It is recommended that employers also provide this notice to remote employees by email or similar means.)
  • Tax Credits: Employers may offset at least some of the costs of providing paid leave under the Paid Leave Acts through tax credits against the Social Security payroll tax imposed on employers. Additional payroll tax credits are available for the group health plan costs for, and the Medicare payroll tax on wages paid to, employees on leave under the Paid Leave Acts. Self-employed individuals may also be eligible for certain tax credits against their self-employment taxes. Under certain conditions, an employer may be eligible for advance refunding of tax credits by withholding the amount of the anticipated credit from the applicable tax deposit.

The U.S. Treasury Department is providing regulations or other guidance concerning the tax credits available under the Paid Leave Acts. (Employers should obtain professional advice as to the details of these tax credits, including the applicability and limits of the tax credits, the records and documentation that must be maintained to make and support a tax credit claim, and the conditions and requirements for advances.)

Emergency Family and Medical Leave Expansion Act

Overview of Section 3101, et seq.

The Emergency Family and Medical Leave Expansion Act (“E-FMLEA”) amends and expands the existing federal Family and Medical Leave Act (“FMLA”).

The E-FMLA requires covered employers to provide up to 12 weeks of leave when an employee is needed to care for a son or daughter under the age of 18 whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons, as set forth more fully below.

Time off taken under the E-FMLA is unpaid for the first 10 days. The employer must pay the employee for any time off taken under the E-FMLA in excess of 10 days, as set forth more fully below.

Summary

  • Eligible Employees: The E-FMLEA applies to employees who have been employed by the employer for at least 30 calendar days. (Note that this differs from, and includes more employees than, the FMLA definition of eligible employee.)

Rehired Employees: The definition of “eligible employee” includes any employee who: (i) was laid off by the employer on or after March 1, 2020, (ii) had worked for the employer for not less than 30 of the last 60 days prior to the employee’s layoff, and (iii) was rehired by the employer.

  • Amount of Leave: Eligible employees are entitled to 12 workweeks of leave under the E-FMLEA . A portion of this leave is paid leave, as set forth below.
  • Reasons for Leave: Eligible employees are entitled to leave under the E-FMLEA “because of a qualifying need related to a public health emergency.” This “qualifying need” is limited to situations in which “the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.” (In summary, the E-FMLEA only applies to time off related to the need to care for a son or daughter for the specific, limited reasons set forth above.)

Exclusions: An employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of this provision. (This exclusion is not clarified in the law. The U.S. Department of Labor will provide guidance on this issue.)

  • Definitions: “Son or daughter” means “a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.” “Public health emergency” means an emergency with respect to COVID–19 declared by a federal, state, or local authority. “Child care provider” means a provider who receives compensation for providing child care services on a regular basis, including an “eligible child care provider” as defined by federal law. “School” means an elementary school or secondary school.
  • Pay: An employee is not entitled to pay for the first 10 days of E-FMLEA leave, but may elect to substitute any accrued paid time off for the unpaid leave. Time off under the E-FMLEA in excess of 10 days must be paid in an amount that is not less than two-thirds the employee’s regular rate of pay (as defined under the federal Fair Labor Standards Act). Pay is based on the number of hours the employee would otherwise have normally been scheduled to work (or the number of hours calculated for a varying schedule, as set forth below) during the leave period.

Varying Schedule: If an employee’s schedule varies from week to week to such an extent that the employer is unable to determine with certainty the number of hours the employee would have worked if the employee had not taken leave under the E-FMLEA, the number of hours is determined by averaging the number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave (including hours for which the employee took leave of any type). If the employee did not work over such period, the number of hours is determined based upon the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

  • Pay Caps: The required pay as set forth above is capped at $200 per day and $10,000 in the aggregate for each employee for paid leave under the E-FMLA.
  • Notice to Employer: If an employee’s need for E-FMLEA leave is foreseeable, the employee must provide the employer with “such notice of leave as practicable.”
  • Job Restoration: The FMLA’s job restoration requirements apply to employees returning from E-FMLEA leave. The E-FMLEA provides additional exceptions to the FMLA’s job restoration requirements for employers with fewer than 25 employees, but only if certain conditions are met. (Employers should ensure that these conditions are met before denying job restoration to an employee on this basis.)
  • Prohibitions and Liability: The FMLA’s prohibitions and enforcement provisions apply to the E-FMLEA. Certain employers that do not meet the FMLA’s definition of employer are exempt from civil liability for the failure to provide E-FMLEA leave.
  • U.S. Department of Labor/Regulations: The U.S. Department of Labor has been given authority to issue regulations related to E-FMLEA. This specifically includes the authority to issue regulations:
  • To exclude certain health care providers and emergency responders from the E-FMLEA’s definition of “eligible employee,” and
  • To exempt small businesses with fewer than 50 employees from the requirement to provide leave for the Reasons for Leave set forth above (relating to school closings and child care) “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”

Emergency Paid Sick Leave Act

Overview of Section 5101, et seq.

The Emergency Paid Sick Leave Act (“E-PSLA”) is a new, stand-alone law. The E-PSLA requires employers to provide up to 80 hours of paid time off for leave taken in relation to COVID-19 for one or more of the reasons specified below.

Summary

  • Reasons for Leave: Under the E-PSLA, a covered employer is required to provide paid sick leave to any employee who is unable to work or telework due to a need for leave because the employee:

(1)   Is subject to a federal, state, or local quarantine or isolation order related to COVID–19;

(2)   Has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;

(3)   Is experiencing symptoms of COVID–19 and seeking a medical diagnosis;

(4)   Is caring for an individual who is subject to an order as described in (1) above or has been advised as described above in (2);

(5)   Is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions; or

(6)   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.

Exclusions: An employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of this provision. (This exclusion is not clarified in the law. The U.S. Department of Labor will provide guidance on this issue.)

  • Definitions: As applied to E-PSLA, the terms “health care provider” and “son or daughter” have the same meanings as provided in the Family and Medical Leave Act (29 U.S.C. 2611(6), (12)). Under the FMLA, a “son or daughter” includes “a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis” who is (i) under the age of 18, or (ii) 18 years of age or older and incapable of self-care because of a mental or physical disability.
  • Amount of Paid Time Off: Full-time employees are entitled to 80 hours of paid sick time. A part-time employee is entitled to a number of hours equal to the number of hours that such employee works, on average, over a two-week period.

Varying Schedule/Part-time Employees: If a part-time employee’s schedule varies from week to week to such an extent that the employer is unable to determine with certainty the number of hours the employee would have worked if the employee had not taken paid sick time, the number of paid sick time hours is determined by averaging the number of hours that the employee was scheduled per day over the six-month period ending on the date on which the employee takes the paid sick time (including hours for which the employee took leave of any type). If the employee did not work over such period, the number of paid sick hours is determined based upon the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

  • Pay: The employee must be paid for time off taken under the E-PSLA at a rate no less than the employee’s regular rate of pay (as defined under the Fair Labor Standards Act) and cannot be less than any applicable minimum wage rate. However, if an employee is using paid sick leave for any of the Reasons for Leave numbered (4), (5), or (6) above, the employee’s required compensation shall be two-thirds of the employee’s regular rate.
  • Pay Caps: The required pay set forth above is capped at $511 per day and $5,110 in the aggregate for each employee for time off taken for the Reasons for Leave numbered (1), (2), or (3) above. The required pay is capped at $200 per day and $2,000 in the aggregate for each employee for time off taken for the Reasons for Leave numbered (4), (5), or (6) above.
  • Use of Time Off: An employer may not require an employee to use other types of paid leave provided by the employer before the employee uses paid sick time under the E-PSLA. Unused E-PSLA leave will not carry over into 2021.
  • Notice to Employer: After the first workday (or portion thereof) an employee receives paid sick time under this law, an employer may require the employee to follow reasonable notice procedures in order to continue receiving the paid sick time.
  • Termination of Paid Sick Time: Leave under the E-PSLA ceases beginning with the employee’s next scheduled work shift immediately following the termination of the employee’s need for leave.
  • Expiration of Paid Leave Requirement: An employer’s requirement to provide paid leave with respect to a specific employee expires at the earlier of:
    • The time the employer has paid the employee for paid leave under the E-PSLA for an equivalent of 80 hours of work; or
    • Upon the employee’s return to work after taking paid leave under the E-PSLA.
  • Replacements: An employer may not require, as a condition of providing paid sick time, an employee to search for or find a replacement to cover the hours during which the employee will use the paid sick time.
  • Prohibitions and Enforcement: An employer’s failure to provide E-PSLA leave will be deemed a failure to pay minimum wage in violation of the federal Fair Labor Standards Act and is subject to the same fines and damages, including liquidated (double) damages. Employers are also prohibited from retaliating against an employee for taking time off under the E-PSLA, filing a complaint or instituting proceedings related to this law, or testifying in such proceedings. Violations of these prohibitions will also be enforced under the provisions of the Fair Labor Standards Act.
  • Relation to Other Laws and Policies: The E-PSLA may not be construed to diminish the rights or benefits to which an employee may otherwise be entitled under any other federal, state, or local law, under a collective bargaining agreement, or under an existing employer policy.
  • U.S. Department of Labor/Future Regulations: The U.S. Department of Labor has been given authority to issue regulations related to the E-PSLA. This specifically includes the authority to issue regulations:
    1. To exclude certain health care providers and emergency responders from the definition of employee, including by allowing the employer of such health care providers and emergency responders to opt out.
    2. To exempt small businesses with fewer than 50 employees from the requirement to provide leave for reason numbers (4) and (5) under the Reasons for Leave set forth above (relating to school closings and child care) “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
    3. As necessary to carry out the purposes of the E-PSLA.