Coronavirus Legal Update

Families First Coronavirus Response Act (H.R. 6201) passed by Senate

The Senate just passed the coronavirus legislation that not only includes provisions for COVID-19 testing, but also paid sick and emergency leave. Since this Act shall take effect not later than 15 days after the date of enactment, it is important that you, as an employer, are aware of this development and how it will impact you, your employees, and your workplace.

Emergency Family Medical Leave
Private sector employers with fifty (50) or more employees and covered public sector employers must provide up to 12 weeks of job protected FMLA leave for “a qualifying need related to a public health emergency” to employees who have been on the payroll for at least thirty (30) days. This “qualifying need” is limited to circumstances where an employee is unable to work (or telework) due to a need to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency. The first 10 days for which an employee takes leave may consist of unpaid leave. However, an employee may elect to substitute any accrued vacation leave, personal leave, or medical/sick leave for unpaid leave. Following the 10th day, an employer shall provide paid leave for each day thereafter for the duration of such leave. Paid leave will be calculated based on an amount that is not less than 2/3 of an employee’s regular rate of pay and the number of hours the employee would otherwise be scheduled to work. However, paid leave will be capped at $200 per day and $10,000 in the aggregate. Further, the bill appears to exclude health care providers or emergency responders and employers with fever than fifty (50) employees if the required leave would “jeopardize the vitality of their business”.

Emergency Paid Sick Leave
Employers with fewer than 500 employees, and covered public employers, are required to provide paid sick time to an employee who is unable to work (or telework) because:

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

Full-time employees will be entitled to eighty (80) hours of paid sick time and part-time employees will be entitled to pay for a number of hours equal to the number of hours that employee works, on average, over a 2 week period. Unlike the 30-day payroll requirement with FMLA, employees will be immediately eligible for this kind of leave. Paid sick leave will be capped to $511 per day, $5,110 in the aggregate, when leave is taken for reasons (1), (2), and (3) noted above; and $200 per day, $2,000 in the aggregate, when leave is taken for reasons (4), (5), and (6).
Under the Act, employers will be required to post notice regarding employee’s rights to such leave in the workplace. Thankfully, the Secretary of Labor will make a model notice that meets the Act’s requirements publicly available within seven (7) days from the date of enactment.

The bill also includes a prohibition on retaliating against any employee who takes leave in accordance with the new law and further provides that the failure to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.

Tax Credits
In an effort to strike a balance with the paid leave provisions above, the bill includes refundable tax credits for employers that are required to offer Emergency FMLA or paid sick leave, including self-employed individuals. Note that these credits are only available to those employers that are required to offer these benefits under the new law, and will generally not be extended to employers not subject to the new mandates under the bill.

For the full text of the bill and additional information, please visit https://www.congress.gov/bill/116th-congress/house-bill/6201/text.

Article by: Christine Vizcaino

NOTE: This article was updated on March 18, 2020. Because the COVID-19 situation is dynamic, with new governmental measures each day, employers should consult with counsel for the latest developments and updated guidance on this topic.