New Employer Obligations – The March 18, 2020 Families First Coronavirus Response Act

By Ashley L Ensor

The Families First Coronavirus Response Act (“FFCRA”) was signed into law on March 18, 2020, in response to the COVID-19 national emergency.  The FFCRA contains two provisions that have a particular impact on employers with less than 500 employees: the Emergency Paid Sick Leave Act; and the Emergency Family and Medical Leave Expansion Act.  These provisions require employers with less than 500 employees to provide their employees with paid sick leave and/or expanded family and medical leave for specified reasons related to COVID-19. 

The Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act (“Sick Leave Act”) requires that private employers with fewer than 500 employees (and certain public employers) provide paid sick leave to all employees to be used for qualifying COVID-19 related reasons.  This requirement applies regardless of how long the employee has been employed by an employer.

Amount of Paid Sick Time

  • Full-time employees are entitled to 80 hours of paid sick time.
  • Part-time employees are entitled to paid sick time equal to the number of hours that the employee works, on average, over a two-week period.  For instance, an employee who works an average of 15 hours per week would be entitled to 30 hours of sick time.

Qualifying Reasons

An employee qualifies for paid sick time if the employee is unable to work (or telework) for one of the following reasons:

  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 seeking a medical diagnosis;
  4. The employee is caring for an individual who is subject to an order as described in paragraph (1) or has been advised as described in paragraph (2);
  5. 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;
  6. 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.

The term “son or daughter” means a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is: (a)under 18 years of age; or (b) 18 years of age or older and incapable of self-care because of a mental or physical disability.

Employees are not entitled to paid leave under the Sick Leave Act as a result of an employer’s decision to close a business for lack of work or because the employer is required to close the business pursuant to a federal, state, or local directive.

Rate of Pay

The rate of pay that an employee is entitled to for paid sick leave depends on the reason why the leave is needed:

  • For the qualifying leave reasons in paragraphs (1), (2), or (3) above: employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
  • For the qualifying leave reasons in paragraphs (4), (5), or (6) above: employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).

Use of Paid Sick Time

  • Paid sick time is not accrued, it is available for immediate use by an employee.
  • Paid sick time is in addition to any paid leave already provided by an employer.  An employer may not require an employee to use other paid leave provided by the employer before the employee uses the paid sick time under the Sick Leave Act.
  • Paid sick time does not carry over from one year to the next.  Employees are not entitled to reimbursement for unused leave upon termination, resignation, retirement, or other separation from employment.
  • An employer cannot require that the employee first find a replacement employee to cover the hours during which the employee is using paid sick time.
  • Where leave is foreseeable, an employee should provide notice of leave to the employer as is practicable.  After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving paid sick time.
  • An employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of the Sick Leave Act.

Emergency Family and Medical Leave Expansion Act

The Emergency Family and Medical Leave Expansion Act (“FMLA Expansion”) requires that private employers with less than 500 employees (and certain public employers) provide up to 12 weeks of leave (unpaid for the first 2 weeks and paid for the remaining 10 weeks) to employees who are unable to work (or telework) due to a need to care for the employee’s son or daughter (under 18 years of age) if the child’s elementary or secondary school or place of care has been closed (or the child care provider is unavailable) due to an emergency with respect to COVID-19 declared by a federal, state, or local authority. 

The closure of the child’s school or child care is the only reason for leave allowed under the FMLA Expansion.

The term “child care provider” means a provider who receives compensation for providing child care services on a regular basis.

The term “son or daughter” means a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is under 18 years of age or is 18 years of age or older and incapable of self-care because of a mental or physical disability.

Eligible Employees

To qualify for leave under the FMLA Expansion, the employee must be employed for at least 30 calendar days.  Where the necessity for leave is foreseeable, an employee shall provide the employer with such notice of leave as is practicable.

Employers of health care providers or emergency responders may elect to exclude such employees from leave under the FMLA Expansion.

Amount of Leave & Rate of Pay

Under the FMLA Expansion, qualifying employers must provide 12 total weeks of leave. 

The first 10 days of leave may be unpaid.  However, an employee may elect to substitute these 10 unpaid days using available paid leave under the Sick Leave Act or any other available paid time off (including employer sponsored sick or vacation leave).

The remaining 10 weeks of leave must be paid at a rate of at least 2/3 of the employee’s regular rate of pay for the hours the employee would have been scheduled to work during those 10 weeks.  The amount of paid leave is capped at a maximum of $200 per day and $10,000 in the aggregate.

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 under the FMLA Expansion, the number of hours is equal to the average number of hours the employee was scheduled to work per day over the previous 6 months, calculated from the date when the employee takes such leave.  If an employee did not work during that 6-month period, the number of hours is equal to the reasonable expectation at the time of hiring of the average number of hours the employee would be scheduled to work.

Restoration to Position After Expiration of Leave

As with traditional FMLA leave, employers must restore employees to their same or a similar position upon their return from leave under the FMLA Expansion.  However, employers with 25 or fewer employees are exempt from this job protection requirement, if:

  1. The position held by the employee does not exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a COVID-19 related emergency declared by a federal, state, or local authority;
  2. The employer makes 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; and
  3. After those reasonable efforts fail, the employer makes reasonable efforts to contact the ‎employee about an equivalent position, if one becomes available, for 1 year following the ‎conclusion of the COVID-19 related emergency or the conclusion of the 12-weeks of ‎leave taken by the employee, whichever is earlier.

Employment Under Multi-Employer Bargaining Agreements

Both the Sick Leave Act and FMLA Expansion state that an employer who is a signatory to a multi-employer collective bargaining agreement may, consistent with its bargaining obligations and its collective bargaining agreement, fulfill its paid leave obligations by making contributions to a multi-employer fund, plan, or program that enables employees to receive such pay.

Small Business Exemptions

Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.  To elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department of Labor, which will be addressed in more detail in forthcoming regulations.  

Tax Credits for Paid Leave

Covered employers qualify for 100% dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Sick Leave Act and/or FMLA Expansion for a qualifying reason, up to the appropriate per diem and aggregate payment caps.  Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.

Employer Notice Requirements

Covered employers shall post and keep posted a notice of the FFCRA requirements which is prepared or approved by the Secretary of Labor.  The notice should be posted in a conspicuous place on the premises of the employer where notices to employees are customarily posted.  An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.  A copy of the Secretary of Labor’s model notice can be find at: https://www.dol.gov/agencies/whd/pandemic

Enforcement

The Department of Labor’s Wage and Hour Division (WHD) has the authority to investigate and enforce compliance with the FFCRA.  Employers may not discharge, discipline, or otherwise discriminate against any employee who lawfully takes paid sick leave or expanded family and medical leave under the FFCRA, files a complaint, or institutes a proceeding under or related to this Act.  Employers in violation of the provisions of the FFCRA will be subject to WHD penalties and enforcement.

Ashley Ensor is an Associate at Gorman & Williams.  Her practice is concentrated in the areas of employment law, business law, and civil ligation.  Ashley has advised employers on a variety of employment law matters.  Ashley will continue to monitor and report on COVID-19 related employment developments on the Gorman & Williams website.

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