On March 18, 2020, the Families First Coronavirus Response Act (the “Coronavirus Response Act”) was signed into law in response to the challenges our country is facing as a result of the coronavirus that causes COVID-19. The bill provides for, among other things, emergency paid leave and paid sick days for certain employees.
Given the rapid spread of the coronavirus throughout the United States, employers will be facing increasing requests for paid leave necessitated by the wide-ranging impacts of the virus. Below is a summary of the material provisions of the Coronavirus Response Act relating to paid family and medical leave and paid sick time.
Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act creates a new emergency federal paid leave benefits program that expands coverage under the Family and Medical Leave Act (FMLA). Employees must have worked for a covered employer for at least 30 days to be entitled to emergency family and medical leave. Covered employers include employers with fewer than 500 employees, with an exception for employers that have less than 50 employees if such payment obligations would jeopardize the viability of the business as a going concern. Moreover, employers of healthcare providers or emergency responders may choose to exclude their employees from the benefits of this new law.
Under this new law, leave is permitted where the employee is unable to work (or telework) due to a need for leave to care for the employee’s child if: (i) the child’s school or place of care has been closed because of the coronavirus, or (ii) the child’s caretaker is unavailable because of the same. Eligible employees are entitled to take up to 12 weeks of emergency family and medical leave, which would run concurrently with their typical FMLA leave. The first 10 days of emergency family and medical leave are unpaid, but employees have the option to substitute paid vacation, personal leave, or sick leave during this period. For each day of emergency family and medical leave taken after the initial 10 days are exhausted, employers are required to pay the employee at least two-thirds of their regular rate of pay for the number of hours normally worked. Notably, employers are not required to provide paid leave to a given employee in excess of $200 per day, or $10,000 in the aggregate.
Employees who foresee the need for leave are required to provide their employers with as much notice as is practicable. The Emergency Family and Medical Leave Expansion Act will take effect no later than April 2, 2020, and will remain in effect until December 31, 2020.
Emergency Paid Sick Leave Act
The Emergency Paid Sick Leave Act implements new paid sick leave requirements for employers with fewer than 500 employees. Sick leave is available for immediate use and without regard to how long employees have been employed by their employer. However, employers of healthcare providers or emergency responders may choose to exclude their employees from the benefits of this law.
Leave under the Emergency Paid Sick Leave Act is available where an employee is unable to work (or telework) due to a need for leave for one of the following reasons:
- An employee’s COVID-19 related self-isolation or quarantine is ordered by federal, state, or local authorities.
- An employee’s COVID-19 related self-quarantine is advised by a healthcare provider.
- An employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
- An employee is caring for an individual who has been ordered to self-isolate or quarantine by a federal, state, or local authority, or has been advised by a healthcare provider to self-quarantine because of COVID-19 concerns.
- An employee is caring for the employee’s child if the child’s school or place of care has been closed, or the child’s care provider is unavailable due to COVID-19 precautions.
- An employee 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.
Full-time employees are entitled to 80 hours of paid leave at their regular rate of pay, and part-time employees are entitled to their regular rate of pay for the average number of hours they work over a two-week period. However, if an employee takes leave for reasons 4, 5, or 6 set forth above, they are entitled to two-thirds of their rate of pay while on paid sick leave.
There are caps on the amount employees can receive under this new law as follows: if an employee takes leave for reasons 1, 2, or 3 set forth above, payment cannot exceed $511 per day and $5,110 in the aggregate; and if an employee takes leave for reasons 4, 5, or 6 set forth above, payment cannot exceed $200 per day and $2,000 in the aggregate.
Employers may not require that their employees use other paid leave before using leave provided by this law, and they are required to post a notice regarding emergency paid sick leave in a conspicuous place. This notice will be prepared and made available by the Secretary of Labor. The Emergency Paid Sick Leave Act will take effect no later than April 2, 2020, and will remain in effect until December 31, 2020.
Tax Credits for Employers
The Coronavirus Response Act provides tax credits for employers that are intended to offset the costs of providing paid leave and sick time as set forth above. For example, employers may be entitled to a tax credit equal to 100% of the qualified wages they are required to pay under the Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act for each calendar quarter. Employers should consult with counsel for further information on the applicability of the available tax credits to their particular situations.
Employer Recommendations
We recommend that employers take the following steps to ensure compliance with the Coronavirus Response Act: (i) review their existing leave policies and revise them accordingly; (ii) consult Pryor Cashman’s coronavirus library/resource center for additional legal updates and guidance regarding the Coronavirus Response Act and COVID-19; and (iii) consult your Pryor Cashman attorney for further information and/or with any questions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
