On the evening of March 18, 2020, President Trump signed into law a significant legislative response affecting employers and workers coping with the COVID-19 (“coronavirus”) pandemic.
The Families First Coronavirus Response Act (the “Act”) contains two separate but related provisions. First, the Act provides for Emergency Paid Sick Leave (“EPSL”) to be provided to employees and paid for by employers in certain situations. Second, it provides for an Emergency Family and Medical Leave Expansion (“EFMLE”), which expands coverage of the existing FMLA to specific situations related to the pandemic. Both provisions are subsidized through certain reimbursements available to employers (including self-employed individuals) in the form of a tax credit.
Emergency Paid Sick Leave
The EPSL provisions of the Act become effective April 2, 2020, and they will automatically expire December 31, 2020. In general, the EPSL provision provides for up to two weeks of employer-paid leave for most absences related to coronavirus, as set forth below.
All employers having fewer than 500 employees are covered by EPSL (the rationale apparently being that larger employers should already have such policies in place and should not be subsidized through the tax credit accompanying the leave requirement). The Department of Labor is authorized to exempt businesses with fewer than 50 employees if it determines compliance would jeopardize the viability of the business.
Employees of covered employers are immediately eligible. There is no minimum period of employment required, and eligibility extends to both full-time and part-time employees.
EPSL is available when employees cannot work or telework because of one of the following:
- The employee is subject to a federal, state, or local quarantine or isolation order;
- The employee has been advised by a health care provider to self-quarantine;
- The employee is experiencing symptoms of coronavirus and is seeking a medical diagnosis;
- The employee is caring for a person subject to a federal, state, or local quarantine or isolation order or who has been advised by a health care provider to self-quarantine;
- The employee is caring for a son or daughter of the employee whose school or day care is closed (i.e., EFMLE eligibility, detailed below); or
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, the Secretary of the Treasury, and/or the Secretary of Labor.
As noted below, if an employee already qualifies for EFMLE unpaid leave, the employee may choose to use EPSL during the first 10 days of leave.
Employees may also choose to use take (or retain) whatever accrued paid leave was already available to them before March 18, 2020. Employers are prohibited from changing their existing leave polices after that date in a manner that would reduce the amount of other available leave. Likewise, employers cannot require that employees exhaust leave under an employer’s existing policies before using EPSL. This choice is left up to the employee.
Full-time employees are entitled to 80 hours of paid leave. Part-time employees are entitled to be paid for the number of hours per day they worked on average over the prior two-week period.
There are two methods for determining the amount of EPSL compensation, depending on which of the six reasons for the leave is applicable. First, leave taken for the following reasons must be paid at the employee’s full regular rate of pay, subject to caps of $511 per day and $5,110 total:
- The employee is subject to a federal, state, or local quarantine or isolation order;
- The employee has been advised by a health care provider to self-quarantine; or
- The employee is experiencing symptoms of coronavirus and is seeking a medical diagnosis.
Second, leave taken for the following reasons must be paid at the rate of two-thirds of the employee’s regular rate of pay, subject to caps of $200 per day and $2,000 total:
- The employee is caring for a person who is subject to a federal, state, or local quarantine or isolation order or who has been advised by a health care provider to self-quarantine;
- The employee is caring for a son or daughter of the employee whose school or day care is closed (i.e., EFMLE eligibility); or
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, the Secretary of the Treasury, and/or the Secretary of Labor.
The EPSL provision does not specify what constitutes acceptable documentation for an employee to claim leave. Employers can expect the Department of Labor to eventually issue appropriate forms and lists of acceptable documentation for employers to confirm employee eligibility for EPSL leave. For now, given the emergency nature of the requirements, employers should be prepared to accept employees’ own written statements about the need and reason for leave, including the name and relationship of the person being cared for, if applicable. Once eligibility is established, employers may require employees on leave to follow “reasonable notice procedures” to continue receiving paid sick leave.
Emergency Family and Medical Leave Expansion
The Act’s EFMLE extends coverage of the FMLA, but only for a very specific situation related to the coronavirus – the need to care for children during school and daycare closures. Like the EPSL provisions, these requirements will become effective April 2, 2020, and they will automatically expire December 31, 2020.
Similar to coverage under the EPSL, “covered employers” under the EFMLE include all employers in the United States with fewer than 500 employees. There is no automatic exemption for employers with fewer than 50 employees, but the Department of Labor will likely exempt such small businesses if it determines compliance would jeopardize the viability of the business.
Employees become eligible for EFMLE once they have worked for a covered employer for a minimum of 30 calendar days.
EFMLE leave is available only where an employee is unable to come to work or work from home (telework) because there is a need to care for a son or daughter under the age of 18 while the child’s school or day care is closed due to coronavirus.
As with EPSL, employers can expect the Department of Labor to eventually issue appropriate forms and lists of acceptable documentation to confirm employee eligibility for EFMLE leave. For now, given the emergency nature of the requirements, employers should be prepared to accept employees’ own written statements describing their need for leave and the situation of the child to be cared for. Existing FMLA regulations already include a broad definition for “son or daughter,” including step-children, foster children, and children for whom the employee otherwise has parental (“in loco parentis”) responsibilities, so similar breadth of coverage should be expected under the EFMLE.
The EFMLE provision requires that such leave be protected. The first 10 days of EFMLE leave may be unpaid; however, at the employee’s discretion, PTO or other paid leave available through the employer can be substituted for unpaid leave during this period. If an employee qualifies for both EFMLE and Emergency Paid Sick Leave (i.e., EPSL, the first part of this new legislation), the employee may use the EPSL simultaneously to pay for the first 10 days of EFMLE.
For the remainder of the 12-week EFMLE allowance, employers are required to pay eligible employees at the rate of either (a) two-thirds of an hourly employee’s “regular rate” under the Fair Labor Standards Act for hours the employee would normally have been scheduled, or (b) two-thirds of a salaried employee’s standard pay, or (c) if compensation is variable, two-thirds of the employee’s prior six-month average pay preceding the leave.
All payments for leave under the EFMLE are capped at maximums of $200 per day and $10,000 for the duration of the leave per employee. Any remainder of the 12-week leave allowance available once these caps are reached may be unpaid.
Following EFMLE leave, employers are required to return employees to their original or equivalent positions, with one exception for small employers with fewer than 25 employees. Such small employers may decline to return employees to work if (a) the employee’s position no longer exists because of economic or operating conditions caused by the coronavirus emergency; and (b) the employer makes “reasonable efforts” to restore the employee to an equivalent position with equivalent pay, benefits, and terms and conditions of employment for a one-year period after termination.
Notification Requirements
Employers are required to inform employees of the availability of EFMLE and EPSL through adoption and publication of internal policies. Eventually, the Department of Labor will publish a poster that employers must post in the workplace.
Tax Credit for Required Paid Sick Leave
The Act provides a refundable tax credit equal to 100% of qualified paid sick leave wages paid by the employer for each calendar quarter. Qualified sick leave wages includes wages that are required to be paid by the employer under the EFMLE and EPSL provisions of the Act. The amount of the credit corresponds to the caps for each form of benefit. Employers will receive a refund for such credits to the extent they exceed their liability for Social Security taxes. Self-employed individuals also may use EFMLE and EPSL and receive corresponding tax credits. Coolidge Wall will provide separate tax recommendations for employers and self-employed individuals as it continues to analyze the Act.
The Labor and Employment lawyers at Coolidge Wall will post additional analysis about employer responsibilities under the Families First Coronavirus Response Act, as well as information updates on other federal and state developments related to the coronavirus outbreak. Should you have specific questions, please contact us.
Contributing attorneys:
Marc L. Fleischauer
David P. Pierce
Benjamin A. Mazer
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail.
