On March 18, 2020, the President signed into law The Families First Coronavirus Response Act (the "Act". This new federal law will provide employees with emergency paid family leave and paid sick leave related to COVID-19.

These paid leave laws apply to all employers with fewer than 500 employees. The laws take effect on April 1st and expire on December 31, 2020. The Secretary of Labor is expected to issue guidelines to assist employers in complying with these new legal requirements in the coming weeks.

Emergency Family Medical Leave Act

Employees who have been employed for at least 30 calendar days by the employer are eligible for the new paid family leave. The Act specifically expands the Family and Medical Leave Act by broadening the term "qualifying need" to include 12 weeks of leave for "the employee [who] 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." Under the law, "public health emergency" means an emergency related to COVID-19. "School" includes elementary or secondary schools as defined in the Elementary and Secondary Education Act of 1965 (20 U.S.C. § 7801). "Child care provider" means a provider who provides child care serves on a regular basis for compensation.

The first 10 days of family leave are unpaid. Employers may allow employees to substitute any other paid leave for accrued vacation, personal, medical or sick leave. Employees who qualify for paid sick leave (see below) may also use that paid leave for these 10 days. Employers are prohibited from requiring that employees substitute any of these other paid leaves.

The next 10 weeks of leave are to be paid. Employees are entitled to be paid not less than 2/3rds of their regular rate of pay for the number of hours the employee would otherwise normally be scheduled to work. "Regular rate of pay" is determined consistent with the Fair Labor Standards Act (29 U.S.C. § 207(e)).

Variable hour employees are entitled to the average number of hours worked over the past six-month period. With respect to employees working for less than a six-month period, the employer shall use 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."

The eligible paid family leave described above is capped at $200 per day and capped at a total of $10,000.

Emergency Paid Sick Leave Act

Paid sick leave will be immediately available to all employees regardless of how long the employee has been employed. Employers are required to provide up to 80 hours of paid sick time for those employees who are unable to work (or telework) due to the need for leave because the employee:

  1. Is subject to a federal, state, local quarantine or isolation order related to COVID-19
  2. Has been advised by health provider to self-quarantine due to concerns related to COVID-19
  3. Is experiencing symptoms of COVID-19 and seeking medical diagnosis
  4. Is caring for a person who is subject to a federal, state, local quarantine or isolation order related to COVID-19, or has been advised by a health provider to self-quarantine due to concerns related to COVID-19
  5. Is caring for a son or daughter if school or place of care has been closed, or child care provider of the son or daughter is unavailable due to COVID-19 precautions
  6. Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with Secretary of Treasury and Secretary of Labor.

Full-time employees are entitled to up to 80 hours of paid sick leave. Part-time employees are entitled to be paid for the number of hours the employee works, on average, over a 2-week period. For part-time employees with variable hours, the employer shall average the number of hours worked over the past six- month period. Employees working for less than a six-month period, the employer shall use 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."

Employers must pay employees their regular rate of pay, or minimum wage, whichever is greater, for leave taken for the circumstances described in items 1-3 above. Employers must pay employees at 2/3rds of their regular rate of pay, or minimum wage (whichever is greater), for leave taken for the circumstances described in items 4-6 above.

Paid sick leave is capped at $511 per day or a total of $5,110, for circumstances 1-3 above and $200 per day or a total of $2,000 for circumstances 4-6 above.

While employers may require workers to follow reasonable notice procedures to continue to receive the benefit after the first workday an employee receives pay under this law, employers must not:

  1. require an employee to find a replacement to cover for the employee;
  2. require employee to use other employer provided paid leave first;
  3. discriminate or retaliate against employee taking this leave; or
  4. retaliate against employee for making a complaint or participating in, testifying in, or seeking enforcement in a proceeding related to this action.

The Act does not preempt any required federal, state or local law, existing employer policy, or collective bargaining agreement. There is also no carry-over of this sick leave to the next year, and no financial obligation for employers to pay employees upon termination for sick leave not used.

The Act requires employers to post, and keep posted, a notice in "conspicuous places on the premises of the employer where notices to employees are customarily posted." In order to ensure adequate notice for those employees who are working remotely, employers should also provide notice electronically or m any other manner in which notice is customarily provided to employees. The Secretary of Labor is expected to issue a model notice in the coming weeks.

Enforcement may be brought,and penalties assessed, against employers for violations of the Act or for the payment of less than minimum wages.

Employer Take-Aways

Employers impacted by the Act should draft temporary policies related to these mandated paid leaves. We will be providing updated information on this over the coming days.

For smaller businesses that are not generally covered by the FMLA and that now find their businesses subject to the Act, the Secretary of Labor has the authority to issue regulations providing exceptions for businesses with fewer than 50 employees "when the imposition of such requirements would jeopardize the viability of the business as a going concern." No such regulations are in place at this time. Exemptions may also apply to certain health-care companies and companies employing emergency responders.

These laws also provide for payroll tax credits for employers subject to the emergency paid family and sick leaves to cover the wages paid to employees.

The Act was quickly pulled together to address current circumstances. It will take time for employers to understand these new laws and to get policies and systems in place by April 1st to comply with the requirements. Stay tuned for further guidance and communication on compliance.

These laws also provide for payroll tax credits for employers subject to the emergency paid family and sick leaves to cover the wages paid to employees.

This legislation was quickly pulled together to address current circumstances. It will take time for employers to understand these new laws and to get policies and systems in place by April 1st to comply with the requirements. Stay tuned for further guidance and communication on compliance.

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.