The much-anticipated Families First Coronavirus Response Act was officially signed into law by President Trump on March 18, 2020. Employers with less than 500 employees should be ready to implement emergency paid sick leave and provide for FMLA leave under certain circumstances relating to COVID-19 as early as April 2, 2020. Below are FAQs and answers to help employers navigate and understand their obligations under the Act. Of particular note, employers should develop policies addressing the paid sick leave and FMLA provisions contained in the Act. As always, Buchanan Ingersoll & Rooney is available to assist you during this unprecedented and challenging time.
Generally
Q: What is the current status of the Families First Coronavirus Response Act?
A: President Trump signed into law H.R. 6201, the Families First Coronavirus Response Act, on March 18, 2020.
Q: Who does the Act cover?
A: Employers with fewer than 500 employees.
Q: How does the Act impact employers with more than 500 employees?
A: The Act has no effect on employers with over 500 employees.
Q: We have several commonly owned companies. Will each of them be considered a separate employer or will they be treated as one employer for purposes of the 500-employee threshold?
A: Generally, separate companies will be treated as separate employers unless they are sufficiently integrated to be considered a single enterprise under the FLSA for purposes of the new paid sick leave or a single employer under the FMLA for purpose of the new FMLA leave.
In order to constitute a single enterprise under the FLSA, the activities sought to be aggregated must be "performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units including departments of an establishment operated through leasing arrangements, but shall not include the related activities performed for such enterprise by an independent contractor." See 29 USC 203(r).
The test for determining whether related companies will be considered a single employer or separate companies under the FMLA is found at 29 CFR 825.104. Generally, separate companies will be treated as separate employers unless they are sufficiently integrated to be considered a single employer. That test considers the following factors: (i) common management; (ii) interrelation between operations; (iii) centralized control of labor relations; and (iv) degree of common ownership/financial control.
Note, however, that taking the position a group of companies is a single enterprise or single employer for purposes of the this new law may have implications under other laws that use a similar tests.
Q: How does the Act impact my leave policies?
A: The Act creates a new emergency paid sick leave obligations and amends the FMLA as it relates to COVID-19 issues. As a result, employers will need to amend their PTO and FMLA polices to reflect these new obligations.
Q: How soon after the Act passes will it apply to employers?
A: The provisions of the Act go into effect on April 2, 2020 and will expire on December 31, 2020.
Q: Do I have to pay employees for emergency paid sick leave if employees are unable to work because I have decided to close my business or made a business determination that employees should not be working?
A: If an employer makes a decision to close or cancel work shifts for business reasons (i.e. lack of work), emergency paid sick leave will not have to be paid.
The Act requires emergency paid sick leave only in the following circumstances:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to paragraphs (1) or (2).
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
- The 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.
Q: Do I have to provide FMLA Leave if employees are unable to work because I have decided to close my business or made a business determination that employees should not be working?
A: FMLA leave under the Act's amendment only applies if an "employee 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." (Hereinafter, COVID-19 Qualifying FMLA Leave.) Thus, if an employer makes a decision to close the business, the employee will not be entitled to COVID-19 Qualifying FMLA Leave.
Paid Sick Leave: Emergency Paid Sick Leave Act
Q: Under the Emergency Paid Sick Leave Act, how much leave are employers required to provide?
A: Full-time employees are entitled to 80 hours and part-time employees are entitled to a number of hours equal to the number of hours that employee works, on average, over a two-week period; however, the benefits are capped at certain amounts per employee.
Emergency paid sick leave under this Act shall cease beginning with the employee's next scheduled work shift immediately following the termination of the need for paid sick time for COVID-19 reasons (as outlined in the next question).
Q: Who is eligible for paid sick leave under the Emergency Paid Sick Leave Act?
A: All employees of employers with 500 employees or less, regardless of how long they've been employed, are eligible for emergency paid sick leave. Employees will be eligible if they are unable to work (or telework) because:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to paragraphs (1) or (2).
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
- The 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.
Q: Are any employers exempt from the Emergency Paid Sick Leave Act?
A: Employers that employ health care providers or emergency responders may elect to exclude such employees from the Emergency Paid Sick Leave Act. The Secretary of Labor shall also have the authority to issue regulations for good cause to exclude health care providers and emergency responders from this Act.
The Secretary of Labor shall also have the authority to issue regulations for good cause to exclude small businesses with fewer than 50 employees from the requirements of this Act when the imposition of such requirements would jeopardize the viability of the business as a going concern.
Q: Can I require employees to use other paid leave before using the federal paid sick leave?
A: No. Emergency paid sick leave under this Act must be available immediately.
Q: Can I require employees to find a replacement employee to cover their hours if they want to use emergency paid sick leave?
A: No.
Q: At what rate of pay must I provide paid sick leave under the Emergency Paid Sick Leave Act?
A: If an employee is out for the following reasons, paid sick leave must be paid at the employee's required compensation (as defined below), but is capped at $511/day and $5,110 in the aggregate per employee:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
If an employee is out for the following reasons, paid sick time must be paid at 2/3 the employee's required compensation, and is capped at $200/day and $2,000 in the aggregate per employee:
- The employee is caring for an individual who is subject to paragraphs (1) or (2).
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
- The 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.
An employee's required compensation shall not be less than the greater of: (1) the employee's regular rate of pay, (2) the minimum wage rate in effect under Section 6(a)(1) of the FLSA, or (3) the minimum wage rate in effect for such employee in the applicable state or locality where the employee is employed.
By April 2, 2020, the Secretary of Labor shall issue guidance to assist employers in calculating the amount of paid sick time.
Q: How do I calculate emergency paid sick leave for employees whose hours vary from week to week?
A: In the case of an employee whose schedule varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken emergency paid sick time, the employer shall use a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such paid sick time, including hours for which the employee took leave of any type. If the employee did not work over such period, the employer may calculate the rate by using 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.
Q: How much notice do my employees have to give me to take emergency paid sick time?
A: After the first workday (or portion thereof) an employee receives paid sick time under this Act, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.
Q: Do I need to inform employees of their right to take paid sick leave under the Emergency Paid Sick Leave Act?
A: Yes, employers shall post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Secretary of Labor, of the requirements of this Act. The Secretary of Labor has been asked to make this notice publicly available seven days after the enactment of this Act.
Q: How does the Emergency Paid Sick Leave Act impact state/local paid sick leave entitlements?
A: This Act does not diminish and, therefore, grants rights and benefits in addition to the rights or benefits that employees are entitled to under any other federal, state, or local law; collective bargaining agreement; or existing employer policy.
Q: Will this paid sick time carry over if not used in 2020?
A: No.
Q: What if I already provide paid sick leave?
A: The Act does not specify whether this leave needs to be added to sick leave or PTO that is already provided by employers, or can run concurrently with leave that is already provided. Our recommendation at this time would be to ensure that you provide a minimum of two weeks of paid sick leave to comply with the Act and tell employees that it runs concurrently with any required federal pay or leave. While this may not ensure that the leaves or pay will run concurrently, it may help to establish that conclusion.
Q: If the employee's employment is terminated, do I have to pay them out for paid sick time that is unused?
A: No. This Act does not require financial or other reimbursement to an employee upon the employee's termination, resignation, retirement, or other separation from employment for unused paid sick time under this Act.
Q: What are the penalties for failure to comply with this Act?
A: Employers who violate this Act shall be considered to have failed to pay minimum wages in violation of the FLSA and be subject to penalties related to such a violation. Willful violations will result in greater penalties.
Q: How does this Act impact me if I am under a multi-employer bargaining agreement?
A: An employer signatory to a multi-employer collective bargaining agreement may, consistent with its bargaining obligations and its collective bargaining agreement, fulfill its obligations under this Act by making contributions to a multi-employer fund, plan, or program based on the hours of paid sick time each of its employees is entitled to under the Act while working under the multi-employer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multi-employer collective bargaining agreement for emergency paid sick leave.
Employees who work under a multi-employer collective bargaining agreement into which their employers make contributions (as outlined above) may secure pay from such fund, plan, or program based on hours they have worked under the multi-employer collective bargaining agreement for emergency paid sick leave.
Revisions to FMLA: Emergency Family and Medical Leave Expansion Act
Q: Who does the FMLA amendment cover?
A: Employers with fewer than 500 employees.
Q: If I have less than 50 employees, does COVID-19 Qualifying FMLA Leave apply to my business?
A: Yes, but the Act gives the Secretary of Labor the authority to issue regulations for good cause to exempt small businesses with fewer than 50 employees where the imposition of these requirements would jeopardize the viability of the business as a going concern.
Q: Who is eligible for FMLA leave under this amendment?
A: All employees (full- or part-time) who have been employed for 30 calendar days who have a "qualifying need related to a public health emergency." The requirement that the employee must be employed for a year and work 1,250 hours in a location where there are 50 or more employees within a 75-mile radius does not apply.
The Act defines "qualifying need related to a public health emergency" as "the employee 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." (Hereinafter, COVID-19 Qualifying FMLA Leave.)
Q: How does the Act define a "public health emergency"?
A: The Act defines a "public health emergency" as "an emergency with respect to COVID-19 declared by a Federal, State, or local authority."
Q: How does the Act define a "child care provider"?
A: The Act defines a "child care provider" as: "a provider who receives compensation for providing child care services on a regular basis, including an 'eligible child care provider' (as defined in section 658P of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858n))."
Q: How does the Act define a "school"?
A: The Act defines a "school" as "an 'elementary school' or 'secondary school' as such terms are defined in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)."
Q: If I employ health care providers or emergency responders, will COVID-19 Qualifying FMLA Leave apply to my business?
A: Employers of health care providers or emergency responders may elect to exclude their employees from this Act. Additionally, the Act gives the Secretary of Labor the authority to issue regulations for good cause to exclude certain health care providers and emergency responders from the definition of eligible employee under the Act.
Q: How many weeks of COVID-19 Qualifying FMLA Leave do I need to provide and does it need to be paid?
A: FMLA requires employers to provide up to 12 weeks of FMLA leave for use by employees who have been employed for 30 days. The first 10 days can be unpaid and the remaining time must be paid at 2/3 the employee's regular rate for the number of hours that the employee would otherwise be normally scheduled to work, with the paid leave capped at $200 per day and $10,000 in the aggregate per employee.
Employees may choose to use accrued and unused PTO during the first 10 days.
Q: Can COVID-19 Qualifying FMLA Leave run concurrently with emergency paid sick leave?
A: If available, the paid sick leave may be used to cover the first 10 days of FMLA leave for COVID-19.
Q: How do I calculate FMLA payment for employees whose hours vary from week to week?
A: In the case of an employee whose schedule varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken leave, the employer shall use a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type. If the employee did not work over such period, the employer may calculate the rate by using 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.
Q: If employees are on FMLA leave for non-COVID-19 reasons, do I now have to pay them?
A: No. The 2/3 payment requirement only applies to FMLA leave related to COVID-19.
Q: How much notice do my employees have to give me before taking COVID-19 Qualifying FMLA Leave?
A: Where the necessity for leave is foreseeable, an employee shall provide the employer with such notice of leave as is practicable.
Q: Is the COVID-19 Qualifying FMLA Leave job protected?
A: Yes. However, employers with less than 25 employees may be exempted from protecting the job if the position held by the employee when the leave commenced does not exist anymore due to the economic conditions or other changes in operating conditions of the employer.
The employer must engage in reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment.
If the employer's reasonable efforts fail, the employer must contact the employee if an equivalent position becomes available in the one-year period following the date of the public health emergency's conclusion or 12 weeks after the date when the employee's COVID-19 FMLA leave commences, whichever is earlier.
Q: How does this Act impact me if I am under a multi-employer bargaining agreement?
A: An employer signatory to a multi-employer collective bargaining agreement may, consistent with its bargaining obligations and its collective bargaining agreement, fulfill its obligations under these amendments by making contributions to a multi-employer fund, plan, or program based on the paid leave each of its employees is entitled to under such section while working under the multi-employer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multi-employer collective bargaining agreement for COVID-19 Qualifying FMLA Leave.
Employees who work under a multi-employer collective bargaining agreement into which their employers make contributions (as outlined above) may secure pay from such fund, plan, or program based on hours they have worked under the multi-employer collective bargaining agreement for COVID-19 Qualifying FMLA Leave.
Impact on Unemployment: Emergency Unemployment Insurance Stabilization and Access Act of 2020
Q: What impact does the Act have on unemployment insurance?
A: The Act provides $1 billion in emergency unemployment insurance relief to the states, allocating half for costs associated with increased administration of each state's unemployment insurance program and the other half to be held in reserve to assist states with a 10 percent increase in unemployment. To receive a portion of this grant money, states must temporarily relax certain unemployment insurance eligibility requirements, such as waiting periods and work search requirements.
Q: Do I have any new unemployment-related obligations under the Act?
A: No. But, for states to get funding, they must take the following steps, so employers should watch for state-mandates on the following:
- Requirement for employers to provide notification of the availability of unemployment compensation to employees at the time of separation from employment. Such notification may be based on model notification language issued by the Secretary of Labor.
- State must ensure that applications for unemployment compensation, and assistance with the application process, are accessible in at least two of the following: in-person, by phone, or online.
- State must notify applicants when an application is received and is being processed, and in any case in which an application is unable to be processed, provides information about steps the applicant can take to ensure the successful processing of the application.
Again, the Act does not impose requirements on employers, but states may require employers to take steps so that they can meet the above goals. Additionally, the Act provides that the Secretary of Labor may prescribe any regulations, operating instructions, or other guidance necessary to carry this out, so employers should be on the lookout for that as well.
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.
