Families First Coronavirus Response Act: Expanded Protections for Employees During COVID-19 Pandemic

Yesterday evening the President of the United States signed into law the “Families First Coronavirus Response Act” (the “Act”), a bipartisan measure meant to minimize the impact of the COVID-19 pandemic on the general public. The Act includes myriad provisions related to increased funding for public assistance programs and establishes a number of mandates applicable to private employers with fewer than 500 employees as well as public employers.

Following are key changes to federal law that will impact employers across the country.

EXPANSION OF FMLA PROTECTIONS

The Act amends the Family and Medical Leave Act (“FMLA”) to provide additional protected leave, both paid and unpaid, to employees forced to provide child care as a result of school or child care center closings due to COVID-19. While the changes are significant, they only apply to this limited circumstance. These expanded protections also only apply through December 31, 2020.

Reasons for Leave

The amendments allow employees to take leave only when an “employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable,” due to the COVID-19 emergency.

The additional changes to the FMLA addressed below only apply to this narrow childcare leave. If an employee is on protected leave because he or she is suffering from a COVID-19-related health condition or to care for a child who is suffering from a COVID-19-related health condition, these amendments, including the provisions for paid FMLA leave, will not apply. That employee, however, may be eligible for the new federal paid sick leave, as described below.

Covered Employees

Employees who seek to take COVID-19 related childcare leave need only be employed for 30 calendar days with the employer from whom the leave is requested. For these employees, the traditional FMLA requirement that they have worked a minimum of 1,250 hours is now waived.

Covered Employers

While the FMLA generally applies to employers with 50 or more employees, these childcare amendments apply to all employers with fewer than 500 employees, including those previously exempt from the FMLA.

The Act, however, authorizes the Secretary of Labor to approve exemptions for certain health care providers and emergency responders and small businesses with fewer than 50 employees “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”

Of course, what circumstances would justify an exemption under this provision is yet to be determined.

Paid Leave Provisions

In perhaps the most significant change to the FMLA, employers now will be required to provide paid leave to employees on FMLA-protected COVID-19 childcare leave. The first 10 days of this leave is unpaid under these amendments, but employees can choose to use other accrued paid time off during that period. If eligible, an employee could use the new federal paid sick leave (discussed below) during this otherwise unpaid period.

On day 11, the employer must pay each employee 2/3 of the employee’s regular rate of pay based on the number of hours the employee would otherwise be required to work, up to $200 per day and/or $10,000 total.

Restoration of Employment

Similar to traditional FMLA requirements, employees taking protected leave under these amendments are entitled to reinstatement at the end of their protected leave. The law provides limited relief to employers with fewer than 25 employees. Such employers are not required to restore an employee to his or her former position upon the following conditions:

• The employee takes COVID-19 related leave;
• The previous position held no longer exists due to changes in operating conditions –
  • That affect employment; and
  • Are caused by COVID-19 during the period of leave;
• The employer makes reasonable efforts to restore the employee to an equivalent position; and
• If the employer is unable to restore the employee to an equivalent position, the employer makes reasonable efforts for one year from the earlier of: (1) the date the public health emergency concludes; or (2) 12 weeks after the employee’s leave commences, to contact the employee about the opening of an equivalent position.

Multi-Employer Collective Bargaining Agreements

The Act states that employer signatories to a multi-employer collective bargaining agreement may fulfill these additional FMLA obligations for paid leave by contributing to a multi-employer fund, plan or program that provides paid sick leave benefits, but only for those employees on whose behalf such contributions are made.

MANDATORY PAID SICK LEAVE

The Act also mandates covered employers to provide certain paid sick leave benefits to covered employees. Similar to the FMLA amendments, the federal paid sick leave mandate expires on December 31, 2020.

Covered Employers and Employees

The paid sick leave provisions apply to private employers with fewer than 500 employees and public employers with more than 1 employee. The Secretary of Labor has the authority to exempt small businesses with fewer than 50 employees “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” Again, what will need to be shown to be eligible for such an exemption is uncertain.

Employers may elect to not provide paid sick leave to health care providers or emergency responders.

Hours of Leave

Covered employers are required to provide full-time employees with 80 hours of paid sick time. For part-time employees, employers are required to provide the number of hours worked by that employee, on average, over a 2-week period. The law does not provide any specific guidance on how this two-week period should be selected.

Importantly, the paid sick leave required under the Act is in addition to any paid leave already provided by the employer through collective bargaining agreements or policy or as required by state law. And, an employer is prohibited from requiring employees to use such accrued paid time off prior to using this new federal sick leave.

Multi-Employer Collective Bargaining Agreements

The Act states that employer signatories to a multi-employer collective bargaining agreement may fulfill these additional FMLA obligations for paid leave by contributing to a multi-employer fund, plan or program that provides paid sick leave benefits, but only for those employees on whose behalf such contributions are made.

Uses of Paid Sick Leave

A covered employee must be entitled to use their time if they are unable to work because the employee:

• Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
• Has been advised by a heath care provider to self-quarantine due to COVID-19 concerns;
• Is experiencing COVID-19 symptoms and is seeking medical diagnosis;
• Is caring for an individual subject to a quarantine or isolation order or has been advised by a health care provider to quarantine;
• Is caring for a child whose school or place of child care is closed or child care provider is unavailable; and/or
• Is experiencing a “substantially similar condition” specified by the Secretary Health and Human Services.

Rate of Pay

Employees must be paid their regular rate of pay, using FLSA calculations (subject to any higher state or local minimum wage rates). However, for employees whose leave is not related to caregiving, paid sick time shall not exceed $511 a day and $5,110 in the aggregate. For leave that is related to caring for another individual, the paid sick time shall not exceed $200 a day or $2,000 in the aggregate.

Miscellaneous Provisions

Employers cannot require employees to secure coverage from a co-worker as a condition of using time and all employees must be able to use their time immediately. Employers also may not discriminate against employees for using paid sick leave.

Violations of the Paid Sick Leave Requirements

Employers who violate the paid sick leave provisions of the Act are subject to penalties available under the FLSA.

TAX CREDITS FOR FMLA AND PAID SICK LEAVE

While the Act places significant financial burdens on employers already struggling, the Act does make some financial relief available.

Impacted employers will qualify for a tax credit equal to 100% of qualified sick leave wages paid by the employer (subject to the $200 and $511 daily limits and limits on the number of days taken). Employers also are eligible for a tax credit equal to 100% of qualified family leave wages paid by the employer (subject to the $200 and $10,000 limits).

Moreover, those individuals who are self-employed (as well as certain gig workers) similarly will be eligible for tax credits in “an amount equal to the qualified sick leave equivalent amount with respect to the individual” as well as “an amount equal to 100 percent of the qualified family leave equivalent amount with respect to the individual.”

Due to the COVID-19 pandemic, the labor and employment landscape is rapidly changing. Employers must stay aware of their increasing obligations or risk significant (additional) liability. O’Toole Scrivo, LLC is here to help you navigate through these uncertain times.