By Kathryn M. Hindman
At a time when Oregon and Washington employers are bracing themselves for the evolving dynamics of COVID-19, on March 18, 2020, the President signed legislation meant to combat the economic impact of the coronavirus epidemic. Known as the Families First Coronavirus Response Act, the law increases certain food-aid benefits for low income families, and addresses COVID-19 testing and unemployment for impacted workers. For most employers, the new law also mandates paid sick leave and expands family and medical leave for employees who miss work when a child is impacted by the virus.
This alert summarizes the two key programs affecting employers related to the emergency expansion of federal family and medical leave and emergency paid sick leave. Effective April 2, 2020, both programs apply to employers with fewer than 500 employees, and expire on December 31, 2020.
Emergency Family and Medical Leave Expansion Act
- Coverage: The Act expands employer coverage of the current federal Family and Medical Leave Act (FMLA) to apply to employers with fewer than 500 employees for Emergency FMLA COVID-19 purposes only. The Act does not exempt public or non-profit employers, but allows the Secretary of Labor to exclude health care providers and first responders, and exempt employers with fewer than 50 employees if the leave would jeopardize the viability of the business. Covered employers must post and provide notice to employees about their rights under the Act, which will be prepared by the Department of Labor.
- Eligibility for Emergency FMLA Reasons: The Act shortens and lowers the current FMLA eligibility requirements and allows a full or part-time employee who has worked 30 days prior to the commencement of the leave, and is unable to work or telework to care for the employee’s child (under 18) when their child’s school or place of care is closed, or the childcare provider in unavailable due to a public health emergency, to receive up to 12-weeks of protected leave. This is the only qualifying reason for Emergency FMLA.
Emergency Paid Sick Leave Act
- Paid Emergency FMLA:
- The first ten days out of the workplace may be unpaid. During this time, an employee may choose to substitute any accrued paid leave (like PTO, vacation, or sick leave including the leave benefit under the Emergency Sick Leave Act) to cover all or some of the ten-day period. Employers cannot require or compel use of accrued paid time off.
- After ten days, employers must pay full-time employees taking Emergency FMLA leave at no less than two-thirds of the employee’s regular rate of pay for the number of hours the employee is normally scheduled. The Act caps this pay entitlement for each full-time employee at $200/day and $10,000 in the aggregate. Employees who work part-time or irregular schedules are entitled to pay based on the average hours the employee worked for the six months prior to the commencement of the Emergency FMLA. New employees who have worked less than six months are entitled to pay based on the average number of hours the employee was expected at hiring to be normally scheduled to work.
- Reinstatement: Employers with 25 or more employees must return the employee from Emergency FMLA to the same or equivalent position. Employers with fewer than 25 employees are not required to reinstate the employee if the position no longer exists due to an economic downturn or other circumstances caused by a public health emergency during the Emergency FMLA period, and the employer made reasonable efforts to return the employee to an equivalent position; employers under such circumstances must make reasonable efforts to return the employee to work for up to a year following the employee’s leave.
- Coverage: Applies to employers with fewer than 500 employees. As with Emergency FMLA, the Act does not exempt public or non-profit employers, but allows the Secretary of Labor to exclude health care providers and first responders, and exempt employers with fewer than 50 employees if the leave would jeopardize the viability of the business. Covered employers must post a notice to employees about their rights under the Act, which will be prepared by the Department of Labor.
- Reasons for Emergency Paid Sick Leave and Eligibility: Covered employers must provide full-time employees with up to 80-hours (pro-rated for part-time employees) of paid sick leave, available for immediate use regardless of length of employment, if they cannot work or telework because they are:
- Experiencing COVID-19 symptoms and are seeking a medical diagnosis: paid at 100% and capped at $511/day and $5,110 in the aggregate;
- Advised by a healthcare provider they should self-quarantine, or are subject to a federal, state or local quarantine or isolation order related to COVID-19: paid at 100% and capped at $511 per day and $5,110 in the aggregate (or assisting an individual who must quarantine/self quarantine for those reasons, paid at two-thirds the employee’s rate and capped at $200 per day and $2000 in the aggregate);
- Caring for a son or daughter if their school or childcare provider is unavailable due to COVID-19: paid at two-thirds the employee’s rate and capped at $200 per day and $2000 in the aggregate;
- 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: paid at two-thirds the employee’s rate and capped at $200 per day and $2000 in the aggregate;
- Rate of pay: Similar to the paid leave under Emergency FMLA (above), employees who work part-time or have an irregular schedule are paid based on the average number of hours the employee worked for six months prior to taking the paid sick leave. New employees who have worked less than six months are entitled to pay based on the average number of hours the employee was expected at hiring to be normally scheduled to work over a two-week period. Full-time employees, at their request, may receive 80 hours of mandated emergency paid sick leave instead of the initial ten days of unpaid leave allowed by Emergency FMLA (explained above).
A Note on Collective Bargaining Agreements:
- Carryover and Other Limits: This emergency paid sick leave cannot be carried over to the following year, after December 31, 2020, and is in addition to any accrued and paid leave currently provided by the employer. In other words, employers may not require employees to use already accrued time off prior to use of federally provided paid leave, and employers may not change existing paid leave policies to avoid being subject to the Act’s paid sick time provisions. Employers are also prohibited from requiring employees to find coverage for missed shifts, or retaliating against those who take paid sick time.
Both the Emergency FMLA expansion and Emergency Paid Sick Leave sections of law include provisions that apply to employers who are signatory to “multi-employer collective bargaining agreements.” Consistent with the labor contract and the employer’s bargaining obligations, such employers may be able to satisfy the FMLA and sick leave requirements for employees covered by the contract by making contributions to a multi-employer fund, plan or program based on the hours of paid FMLA leave or sick time the employee is entitled to under this new legislation. However, the fund, plan, or program must allow employees to receive pay for the FMLA/sick time leave.
A Note on Tax Credits and Emergency Unemployment Insurance:
The Act provides for certain tax credits against the employer portion of Social Security and Hospital Insurance taxes to assist employers with the benefit costs inherent in providing paid sick leave and Emergency FMLA required under the Act. Employers are eligible for sick leave credits of up to $511 per employee per day for employees caring for themselves, and up to $200 per employee per day if the employee is caring for a family member due to the family member’s illness or school closure. These credits are capped at the excess of ten days over the aggregate number of days taken in preceding calendar quarters. Employers are also eligible for Emergency FMLA credits equal to $200 per employee per day, capped at $10,000 per employee. The credits are refundable to the employer if they would exceed the employer’s payroll tax. Sick leave and Emergency FMLA leave provided for this purpose are not considered wages when calculating the employer’s portion of the Social Security tax. The Act also provides one billion dollars for emergency grants to states for certain activities related to unemployment.
Employers with fewer than 500 employees must implement the new leave and paid sick time requirements by April 2, 2020, as well as post and provide notice to their employees. Federal regulations are to be issued within the next two weeks and we will continue to keep you apprised. We are monitoring other changes employers are facing in this coronavirus new world. For further information, contact any member of our COVID-19 team which includes Kathryn Hindman
, Maryann Yelnosky
, Francis Barnwell
, Kent Pearson
(Labor Law questions), and Kara Backus
(Employee Benefits questions).
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