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Pending Coronavirus legislation may impact your paid leave and FMLA obligations

Chuck Poplstein Colin Pajda March 16, 2020

Expected to pass the Senate later today, the Families First Coronavirus Response Act passed by the House early Saturday, March 14, 2020 creates several significant paid leave requirements for employers. Even employers not usually covered by the Family and Medical Leave Act (FMLA) may be required to offer FMLA leave and paid sick time for employees who must miss work for coronavirus-related reasons.

If the Senate passes the bill as drafted, these are some of the most significant changes employers must be prepared for in the coming weeks:

Coverage

The new law would take effect no later than 15 days after enactment. The Bill contains a sunset provision of December 31, 2020.

The new law would not apply to employers with 500 or more employees. This is presumably calculated on a control group basis.

Employers with one or more but fewer than 500 employees would be subject to the act.

Emergency Family and Medical Leave Expansion Act

The Bill would expand the FMLA to include a new type of approved leave: public health emergency leave related to the COVID-19 pandemic. Essentially, the Act adds several new qualifying reasons for taking FMLA leave:

  1. To comply with a recommendation or order by a health care provider or a public official having jurisdiction because the employee has been exposed to or is exhibiting symptoms of coronavirus and because the employee is unable to perform his or her job functions while complying with the order. This second requirement – that the employee be unable to perform essential job functions – suggests that employees who are able to work remotely (and are not too ill to do so) may not qualify for public health emergency leave.

  2. To care for a family member who has been exposed to or is exhibiting symptoms of coronavirus.

  3. To care for a child under the age of 18 if the child’s school or place of care has been closed or the child’s compensated child care provider is unavailable due to a public health emergency.

Unlike the FMLA coverage requirements for other types of leave (employers with 50 or more employees within a 75 mile radius), all employers with fewer than 500 employees must grant public health emergency leave to anyone who has been employed for at least 30 days. The usual FMLA requirements that an employee have been employed for at least 12 months and have worked 1,250 hours do not apply to public health emergency leave. Employers with fewer than 50 employees may apply for an exemption from the new leave requirements if they can establish that compliance with the Act would jeopardize the viability of their business.

The structure of public health emergency leave is also significantly different than standard FMLA leave. While standard FMLA leave is unpaid, public health emergency leave is only unpaid for the first 14 days. During this first 14 days, an employee may choose to substitute paid time off they have accrued under the employer’s policy, but the employer may not require the employee to use their paid leave. After that, the employer must provide paid leave for each day of leave taken under the Act. This paid leave is calculated at two-thirds the employee’s regular rate of pay for the number of hours the employee would normally be scheduled to work.

The Act also provides expanded definitions for the terms “parent” and “family member” and creates certain exemptions and exceptions for small employers that would not normally be covered by the FMLA. Among all of these departures from the standard FMLA, the bill does retain some familiar features: employees must give as much notice as practicable if leave is foreseeable, employees must be restored to the positions they held at the commencement of their leave (with a possible exemption for small employers in certain circumstances), and the leave allotment is still 12 weeks’ leave in a 12-month period. This means that public emergency health leave is not available once the employee has used up their 12 weeks of FMLA leave.

The new leave requirements will begin within 15 days of the Act’s enactment and will run through December 31, 2020.

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act (EPSLA) requires employers to provide all employees with 80 hours of paid sick leave for certain qualifying coronavirus-related reasons. The Act only applies to an employer who has fewer than 500 employees.

Under the EPSLA, full-time employees are entitled to 80 hours of paid sick time for certain coronavirus-related reasons. Part-time employers are entitled to a number of hours equal to the average number of hours they would normally work in a two-week period. The law applies to any employee no matter how long they have been employed.

Employees may take paid sick time:

  1. To self-isolate because the employee is diagnosed with coronavirus;

  2. To obtain a medical diagnosis or care if the employee is experiencing symptoms of coronavirus;

  3. To comply with a recommendation or order by a public official with jurisdiction or a health care provider because the employee has been exposed to or is exhibiting symptoms of coronavirus;

  4. To care for or assist a family member of an employee who meets any of the above descriptions; and

  5. To care for the child of the employee if the child’s school or place of care has been closed, or the compensated child care provider of the child is unavailable, due to a public health emergency.

If the sick time is taken to care for the employee’s own diagnosis, care, or isolation, the employee is entitled to paid sick time at their regular rate of pay (but not less than the applicable federal, state, or local minimum wage). If the time is taken to care for a family member or child, the employee is entitled to two-thirds of their regular rate. Regular rate is determined using the FLSA definition.

There are several other technical aspects of emergency paid sick time employers will want to keep in mind as the Act becomes effective, as these can differ significantly from state paid sick leave requirements and from existing employer policies:

  • Unlike paid sick leave required by some state laws or employer policies, paid sick time under the Act does not carry over from one year to the next.

  • Unused paid sick time under the Act does not need to be paid out on an employee’s termination, resignation, retirement, or separation from the employer.

  • The employer may not require the employee to search for or find a replacement in order to receive paid sick time under the Act.

  • Paid sick time is available for immediate use regardless of how long the employee has been employed.

  • The employee may use paid sick time under the Act before using any other accrued paid time off.

  • Emergency paid sick time is in addition to any paid time entitlement under the employer’s existing paid time off policy. The employer may not change its paid leave policies on or after the date of the Act’s enactment to avoid providing the additional two weeks of emergency paid sick time.

Violations of the EPSLA carry the same basic remedies as a violation of the FLSA. Like the FLSA, the EPSLA prohibits discrimination or retaliation against employees who take paid sick time or file a complaint related to the Act.

Each employer must post and keep posted in a conspicuous place a notice advising employees of their rights to emergency paid sick time. The Secretary of Labor will make a model notice publicly available within 7 days after the enactment of the Act.

The new paid sick time requirements will begin within 15 days of the Act’s enactment and will run through December 31, 2020.

Tax Credits for Paid Sick and Paid Family and Medical Leave

To help employers cover the costs of the new Paid Family and Medical Leave and Paid Sick Time requirements, the House passed certain tax credit provisions equal to 100% of the qualifying wages paid under the two programs, subject to certain caps and limitations. The credit is taken against payroll taxes owed. Also, paid sick leave or paid public health emergency leave will not be considered wages for employment tax purposes. The Secretary of the Treasury will be releasing regulations and guidance to help employers navigate these tax credit provisions.

Thus far the Act is not retroactive, which means that any paid time currently being granted would not count toward FMLA leave or toward the 80 hours of sick leave, nor be eligible for the credit.

This is only a summary of the most significant changes that will be affecting employers over the next few weeks. We will continue to post updates and guidance as more information is released and after the Senate votes on the bill later today.

We are available to answer more specific questions on exactly how these new laws will affect your company. Please contact any of our attorneys listed here with questions.

Chuck Poplstein and Colin Pajda are attorneys in Thompson Coburn’s Labor & Employment practice group.

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