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President Trump Signs Families First Coronavirus Response Act to provide Paid FMLA Leave and Paid Sick Leave in Response to COVID-19

March 19, 2020

by Andrew Levy, Langdon Ramsburg, and  Adam Santucci

Yesterday, President Trump signed into law historic legislation that will have a significant impact on many employers nation-wide.  The legislation, called the Families First Coronavirus Response Act, has many provisions.  We will focus this discussion on the workplace issues that most employers can expect to face.

Paid Sick Leave
The law includes the Emergency Paid Sick Leave Act.  This requires that employers with 500 or fewer employees provide paid sick leave to all employees for any of the following reasons:

  • 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;
  • To obtain a medical diagnosis or care if experiencing the symptoms of COVID-19;
  • The employee is caring for an individual who is subject to an order as described in bullet point 1 or 2 above;
  • To care for a son or daughter under 18 years of age if the child’s school has been closed or the child care provider is not available due to COVID-19; or
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

Full time employees will be eligible for up to 80 hours of paid sick time, and part time employees will be eligible for a number of hours equal to the number of hours that part time employee typically works over a two-week period. Employees will be permitted to use the emergency paid sick leave before accessing other paid leave the employer has previously provided.  The amount of pay due under Emergency Sick Leave is dependent upon the reason for the sick leave.  If leave is for one of the first three bullet points above, the payment is based on the employee’s regular rate of pay and is capped at $511 per day and $5,110 total.  If the need for leave is for any other qualifying reason, payment is two-thirds of the employee’s regular rate of pay, with a cap of $200 per day and a total of $2,000.

Expansion of Family and Medical Leave Act
The law also includes the Emergency Family and Medical Leave Expansion Act, which amends the existing Family and Medical Leave Act.  Unlike traditional FMLA that applies to employers with 50 or more employees, the new expansion provisions apply to employers with fewer than 500 employees. Likewise, despite the traditional FMLA’s requirement that employees must be employed for a year and work 1,250 hours in the previous twelve months to be eligible, the expansion provision extends eligibility to all employees who have been employed for 30 days or more.  The following are the highlights of the expanded FMLA entitlements.

  • Eligible employees will be permitted to take paid FMLA leave if the employee is unable to work (or telework) due to a need to care for a son or daughter under 18 years of age if the child’s school has been closed or the child care provider is not available due to a public health emergency.
  • The Act provides definitions for most of these key terms.
  • The first 10 days of the FMLA leave used for these purposes can be unpaid, but (as discussed in greater detail above) an employee may elect to use the Emergency Paid Sick Leave provided under the Act or other available paid leave during the initial 10 day period.
  • Eligible employees will receive two thirds of their regular rate of pay for the remaining 10 weeks, up to a maximum of $200/day and $10,000 total.
  • Healthcare benefits must continue during the leave of absence.

Employees will have job protection during this leave, but there are some exceptions to this requirement for small businesses.

In reading the Emergency FMLA Expansion Act and the Emergency Paid Sick Leave Act together, it appears that full time employees will be permitted to use two weeks of paid leave before being transitioned to the wage benefit provided for under the Emergency FMLA Expansion Act.

The Families First Act provides for a tax credit program that appears to be intended to reimburse employers for 100 percent of the costs of the paid Sick Leave and Paid FMLA leave in the vast majority of cases.  Essentially, employers will receive a rebate or a refund of their federal wage taxes to cover these costs, but there are some limits.  For public sector employers, it is unclear how (or if) they will receive a refund of the costs.

In addition, the Families First Act contains provisions for the expansion of unemployment compensation benefits.  These provisions are designed to incentivize states to expand eligibility for UC benefits and eliminate any waiting period associated with the receipt of such benefits.  There are also specific provisions for extending benefits to employees and employers impacted by COVID-19.

The Act states that it will be effective no later than 15 days after the date of enactment, and there are some concerns that it will be made effective sooner.  There are also sunsetting provisions in the legislation as well, which make clear that these provisions are only through the end of the year.

The above represents only a summary of the historic legislation, and given the time and space limitations we have, we did not cover all of the details.  We will provide additional information moving forward.  McNees will also hold a webinar on Monday, March 23, 2020 targeted for employers with less than 500 employees.  We will provide registration details on our web site and our blog.

In the meantime, we recommend that you consult with counsel to determine how the Families First Coronavirus Response Act will impact your workplace.  You may contact any member of the McNees Labor and Employment Group for guidance.

© 2020 McNees Wallace & Nurick LLC
McNees Employment Law Client Alert is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.