March 19, 2020 (revised March 24, 2020)
This issue updates our previous Alert dated March 19, 2020 and provides additional information regarding payment caps and limitations when providing paid leave to employees.
On March 16, the House of Representatives passed a broad leave bill to meet the needs of certain U.S. Employees whose employment was adversely impacted by the restrictions on businesses imposed as a result of the spread of the COVID-19 virus. On March 18, the Senate overwhelmingly approved the House bill (now called the Families First Coronavirus Response Act – H.R. 6201) and it was signed by the President. At the same time, the Senate signaled that it may revisit some of the leave provisions of the bill it just approved during the course of considering a subsequent relief bill.
The laws will be effective on April 2 and will end on December 31, 2020.
EMERGENCY FAMILY MEDICAL LEAVE ACT
Although the first part of the new leave law is based on the existing Family Medical Leave Act (FMLA) there are significant differences.
The new Emergency Family Medical Leave Act covers employers with fewer than 500 employees and certain public-sector employers. Small businesses with fewer than fifty (50) employees are excluded when the imposition of the Act’s leave requirements would jeopardize the viability of the business as a going concern.
Employers with fewer than fifty (50) employees are specifically exempted from civil damages, back pay and liquidated damages in a private FMLA-based lawsuit.
Eligible employees would include those employees who have been on the payroll for thirty (30) calendar days and have a qualifying need relating to a public health emergency. More specifically, it is limited to situations in which an employee is unable to work or telework because of a need to care for a minor child if that child’s school or place of childcare has been closed or is otherwise unavailable due to a “public health emergency.”
Employers may exclude employees who are health care providers or emergency responders from the Emergency FMLA coverage.
Initial FMLA Leave:
The first ten-day section of the Emergency FMLA leave may be unpaid. Although the employer may not require an employee to do so, an employee may opt to utilize accrued vacation, personal, or sick leave during that period of time. Although it is unclear, it also appears that employees may use leave provided for under the Emergency Paid Sick Leave Act as described below, provided the employee’s circumstances qualify under one of the six described reasons for leave under the Emergency Paid Sick Leave Act.
The maximum leave that may be taken by an employee under this legislation is twelve (12) weeks. After the initial 10-day segment of FMLA leave, the remaining leave, again, up to 12 weeks, must be paid by the employer at two-thirds of the employee’s regular rate of pay. The employee will only be paid for the number of hours the employee would otherwise have been scheduled to work. The Act contains language which would cover situations in which an employee’s suggested schedule varies from week to week. However, no employer is required to pay more than $200 per day or $10,000 total for emergency FMLA leave to an eligible employee.
As with the “regular” FMLA, employees must be restored to their previous position upon the conclusion of their leave. However, there are provisions which could, in certain circumstances, exclude employers who employ fewer than twenty-five (25) employees from automatic job restoration.
EMERGENCY PAID SICK LEAVE ACT:
The Emergency Paid Leave Act generally covers the same employers as the Emergency Family Medical Leave Act with the exception of language including any entity that is not a private employee.
Unlike the Emergency Family Medical Leave Act, all employees are covered immediately, even if they have not been on the payroll for thirty (30) calendar days. As noted above, it appears that employees may use the provisions of the Emergency Paid Leave Act during the first ten (10) days of coverage under the Emergency FMLA, as described above. As under the Emergency FMLA, employees who are healthcare providers or emergency responders may be excluded from coverage.
An employer will be required to provide paid sick leave as described below to an employee who is unable to work or telework for the following reasons:
- Where the employee is subject to a federal, state, or local quarantine or isolation order related to or involving COVID-19.
- Where the employee has been advised by a healthcare provider to self-quarantine because of concerns related to COVID-19.
- Where the employee actually has symptoms of COVID-19 and is seeking a medical diagnosis.
- Where the employee is caring for an individual who is subject to a quarantine order or advised to self-quarantine.
- Where the employee is caring for a son or daughter of such employee, under 18 years of age, if the school or place of care of the son or daughter is closed, or a childcare provider of such son or daughter is unavailable, due to COVID-19 precautions or restrictions, or
- (The Catch-All Provision) the employee is experiencing “substantially similar conditions” as specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and Secretary of Labor.
The Amount of Sick Pay:
The maximum number of hours of paid sick time for full-time employees would be 80 hours. For part-time employees it would be capped at the number of hours the employee works, on an average, over a two-week period. The new legislation would provide full pay, but would limit paid leave for each eligible employee to $511 per day, or a total of $5110 in total, where leave is taken for the first three reasons described above (the employee’s illness or quarantine). When leave is taken for the fourth through sixth reasons described above (namely caring for others or because of the closure of daycare or schools) the employee would receive two-thirds of their regular pay, and the maximum pay would be $200 per day for each eligible employee and $2,000 total.
Existing Paid Sick Leave:
The employer cannot require that paid sick leave that has already been made available to employees be exhausted before the Emergency Paid Sick Leave may be used. Nor can already available paid leave of any type be used to offset leave provided for under the Emergency Paid Sick Leave. It can, however, be used by eligible employees after they have exhausted all leave available under this law.
Under the new laws, payroll tax credits are available to employers to recoup certain payments provided for Emergency Paid Sick Leave and Emergency FMLA.
We will keep readers advised of any modifications of the provisions described above.
Employers with questions about the applicability of the two laws described in this Alert may contact the Labor, Employment and Benefits members of our COVID-19 Response Team indentified below.
Contact information for the complete McGrath North’s COVID-19 Response Team can be found here.
For information regarding additional business-related concerns centered around COVID-19, please visit our COVID-19 Resource Guide here.