Paid Sick and FMLA Leave for the Coronavirus / COVID-19

On March 18, 2020, Congress passed the Families First Coronavirus Response Act (FFCRA). President Trump signed the bill the same evening. This new law addresses a number of topics related to Coronavirus such as funding for certain benefits, this alert will focus on the FFCRA's major impact on employers by requiring paid sick leave in light of the COVID-19 pandemic. This new law goes into effect on April 2, 2020, so employers should not delay in making plans to comply with new paid leave requirements.

FFCRA provides employees with paid sick leave through the use of two new laws: (1) the Emergency Family and Medical Leave Expansion Act and (2) the Emergency Paid Sick Leave Act. Additionally, the new law includes refundable tax credits for employers who are required to provide Emergency FMLA or Emergency Paid Sick Leave.

The Emergency Family and Medical Leave Expansion Act

Employers Covered: All government employers; and all employers with fewer than 500 employees. However, the Secretary of Labor may later exempt businesses with fewer than 50 employees when providing such leave "would jeopardize the viability of the business." The Department of Labor is expected to issue regulations in the near future that will, among other things, clarify the process to request an exemption.

Employee Eligibility: Those who have been employed for at least 30 calendar days. Does the new law require those days to be consecutive? At this point, that is unclear.

Qualifying Reason: An employee who is unable to work (or telework) due to a need for leave to care for their child if the child's school or place of care has been closed or the childcare provider is unavailable due to a "public health emergency." "Public health emergency" has been defined as "an emergency with respect to COVID-19 declared by a federal, state or local authority." Note: earlier versions of the FFCRA had additional qualifying reasons, but in the version that passed, this is the only qualifying reason.

Amount of Leave: 12 weeks, just like any other kind of FMLA.

Paid and Unpaid Leave: The first ten days of leave is unpaid. However, employees may elect to substitute an accrued vacation leave, personal leave, or sick leave during this ten-day period. After the initial ten-day period, the employer is required to provide ten weeks of paid leave, paid at two-thirds (2/3) of the employee's regular rate of pay. The law limits the dollar amount of paid leave to $200 per day and $10,000 in the aggregate.

Notice Requirement: As much as is practicable for the employee.

Intermittent Leave: The law does not specifically mention intermittent leave.

Reinstatement Rights: The default FMLA rules apply. However, there is an exemption for businesses with less than 25 employees, if certain conditions are met.

Effective Date: April 2, 2020 (15 days after President Trump signed the bill).

Expires: December 31, 2020.

The Emergency Paid Sick Leave Act
Employers Covered: Once again, only government employers and companies with fewer than 500 employees. Businesses with fewer than 50 employees can request an exemption (same as above).

Employee Eligibility: All employees are immediately eligible (regardless of days of service).

Qualifying Reasons: The Emergency FMLA was limited in this regard. The Emergency Paid Sick Leave Act provides that employees may qualify for leave under several scenarios if the employee is unable to work (or telework):

1. the employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
2. the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
4. the employee is caring for an individual who is subject to quarantine or isolation order, or who has been advised to self-quarantine due to COVID-19;
5. the employee is caring for a son or daughter whose school or place of care is closed, or the childcare provider is unavailable, due to COVID-19 precautions;
or
6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Amount of Leave: Full-time employees are entitled to 80 hours (two weeks) of paid sick leave. Part-time employees are entitled to leave equaling the number of hours the employee works, on average, over a 2-week period.

Paid Leave: This depends on if the employee takes leave under the first three scenarios (1-3) or the last three scenarios (4-6).

If the employee takes leave under scenarios 1-3, then the employee is to receive his or her regular rate of pay. This is limited to $511 per day and $5,110 in the aggregate.

If the employee takes leave under scenarios 4-6, then the employee is to receive 2/3 of his or her regular rate of pay. This is limited to $200 per day and $2,000 in the aggregate.

Employer Limitations: Employers cannot require employees to find a replacement or require employees to use "other paid leave provided by the employer" instead of the Emergency Paid Sick Leave. Presumably, this means the employee gets paid sick time under the new law in addition to any PTO he or she has already accrued.

Penalties for Violations: Same as a minimum wage violation under the Fair Labor Standards Act. This includes fines, imprisonment, damages to the employee amounting to double the unpaid wages and reasonable attorney fees and court costs.

Poster: Within 7 days, there should be a model poster available from the Department of Labor notifying employees of their rights under the Emergency Paid Sick Leave Act. Employers will be required to post that notice in a conspicuous place in the workplace.

Effective Date: April 2, 2020 (15 days after President Trump signed the bill).

Expires: December 31, 2020

TAX CREDITS

The new law provides a refundable tax credit equal to 100 percent of qualified paid sick and family leave wages an employer pays for each calendar quarter. It also provides for tax credits for self-employed individuals, as well.

UNCERTAINTIES

In the next few weeks, we expect the Department of Labor to implement regulations regarding the FFCRA. We hope these regulations will address some uncertainties that exist with the current law, such as:

- What is the interplay between the two paid leave provisions?
- How does intermittent leave play a part, if any, in this new law?
- How is the process for seeking exemptions supposed to work?
- Who decides whether an employee is unable to work or telework?
- If an employee is unable to work or telework because the employee is experiencing COVID-19 symptoms, can an employer designate that leave as a serious health condition under the FMLA?
- How will the joint employer rules in the Fair Labor Standards Act apply to employers who have more than 500 employees?

We will be sure to keep you up to date as these regulations are implemented.

KRAMER RAYSON LLP

In an attempt to limit the spread of COVID-19, our professionals are serving clients remotely through telephone, email, and videoconferences. Rest assured that at Kramer Rayson LLP we remain ready and willing to assist our clients with the Families First Coronavirus Response Act and any other issues that may arise during these challenging times, just like we've done since 1948. Should you need to consult with one of our professionals, do not hesitate to contact us.