The new FFCRA which was signed into law March 18th, 2020 contains two separate laws, the (1) Emergency Family and Medical Leave Expansion Act (“EFMLEA”) and (2) Emergency Paid Sick Leave Act (“EPSLA”), that impose paid family and sick leave obligations on employers with fewer than 500 employees. The Act will go into effect no later than 15 days after the enactment of the FFCRA (April 2, 2020) and the Act will expire on December 31, 2020.
1 – Paid Medical Leave – Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act (“EFMLEA”) requires employers with fewer than 500 employees to provide employees with up to 12 weeks of leave for a “qualifying need related to a public health emergency,” which means COVID-19. In particular, a qualifying need means that an employee is unable to work (or telework) because the employee needs leave to care for a son or daughter under the age of 18 whose school or place of care has closed, or whose childcare provider is unavailable, because of an emergency with respect to COVID-19 declared by a federal, state or local authority. (The original version of the House bill was much broader and would have covered leave needed for, among other reasons, quarantine or caring for family members.)
Under the EFMLEA, the first 10 days of the employee’s leave may consist of unpaid leave, but an employee may choose to substitute any accrued paid leave (vacation, personal or medical or sick leave) for such unpaid leave. Following that 10-day period, an employer must provide paid leave to the employee for each additional day of leave. The rate of pay for such paid leave is calculated based on a rate of not less than two-thirds of the employee’s regular rate of pay and the number of hours the employee would otherwise normally be scheduled to work but is capped for each employee at $200 per day or $10,000 in the aggregate.
The EFMLEA differs from the FMLA in other important respects. For example, FMLA leave is available only to an employee whose employer has at least 50 or more employees within a 75-mile radius of the employee’s worksite. The FMLA therefore does not apply to many small employers, but it covers all employers with 500 or more employees. The EFMLEA, in contrast, applies to any employer with fewer than 500 employees, and the EFMLEA has no mileage radius. The EFMLEA therefore governs smaller employers with fewer than 50 employees unless the Department of Labor decides to exempt such an employer on the grounds that imposition of the EFMLEA’s requirements would jeopardize the employer’s ability to continue operating.
The EFMLEA also broadens the scope of employees who are eligible for leave. Under the FMLA, employees are not eligible for leave unless they have worked for their employer for at least 12 months and have worked 1,250 or more hours in the 12-month period preceding their leave. The EFMLEA shortens the minimum period of employment from 12 months to just 30 days, and it includes no required number of hours to have been worked during that period.
2 – Paid Sick Leave – Emergency Paid Sick Leave Act
The Emergency Paid Sick Leave Act (“EPSLA”) requires private employers with fewer than 500 employees to provide temporary paid sick leave to employees who are unable to work for any of the following reasons related to COVID-19:
(1) the employee is subject to a federal, state or local quarantine or isolation order;
(2) a health care provider has advised the employee to self-quarantine;
(3) the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
(4) the employee is caring for someone who has been advised or ordered to quarantine;
(5) the employee is caring for a son or daughter whose school or place of care has closed, or whose childcare provider is unavailable, because of COVID-19 precautions; or
(6) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
The rate of pay that an employee may receive for sick leave under the EPSLA depends on the reason why the leave is needed. If sick time is needed because of any of the first three reasons set forth above, i.e., the employee is subject to a federal, state or local quarantine or isolation order, a health care provider has advised the employee to self-quarantine, or the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis, then the employee’s paid sick time is capped at $511 per day and $5,110 in the aggregate. If, however, sick time is needed for any other reasons set forth in the EPSLA, the employee’s paid sick time is capped at $200 per day and $2,000 in the aggregate.
The amount of paid sick time to which an employee is entitled depends on whether they work on a full-time or part-time basis. 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, so an employee who works an average of 15 hours per week would be entitled to 30 hours of sick time.
Sick time required by the EPSLA is available to employees immediately, regardless of how long they have worked for an employer, and employers cannot require employees to use other forms of paid leave before using paid sick leave under the EPSLA.
Under the EPSLA, the Department of Labor has the authority to issue regulations to exempt small businesses from paying sick time to an employee who is caring for a son or daughter whose school or place of care has closed, or whose childcare provider is unavailable, because of COVID-19 precautions if the imposition of such a requirement would jeopardize the employer’s ability to continue operating. The Department of Labor may also issue regulations, among other things, to ensure consistency between the EFMLEA and EPSLA and the provisions of the FFCRA that address coverage of testing for COVID-19.
The EPSLA also specifically prohibits retaliation against any employee who takes leave or files any complaint or proceeding related to the statute. Remedies for violations of the EPSLA, including willful violations, are in addition to those set forth in the Fair Labor Standards Act.
The EPSLA also requires employers to post notices of the requirements of the statute in conspicuous places on the employer’s premises.
Tax Credits for Employers
The FFCRA also includes terms that provide an employer with a refundable tax credit, if the payments exceed the employers own payroll taxes for wages paid to employees under the EFMLA and EPSLA, in an amount equal to 100 percent of the qualified sick leave wages that the employer pays with respect to that calendar quarter. The EPSLA credit for each employee would be for wages up to $511 per day while the employee is receiving EPSLA to care for themselves, or $200 per day if the EPSLA is to care for an individual or to provide care for a child due to school or childcare closures. The amount of tax credit for EFMLA wages for each employee is up to $200 per day or $10,000 in the aggregate.
Practical Tips
Employers covered under the FFCRA should be prepared to implement the mandatory EFMLA and EPSL provisions for their workforces. Additionally, employers not currently subject to the FMLA should review the EFMLA requirements for eligible employees and prepare to administer leave accordingly. For those employers with operations in jurisdictions where paid sick leave is mandated, the paid leave under the FFCRA is in addition to any paid sick leave benefit currently provided to employees. Covered employers should not modify other existing paid leave polices and should comply with any jurisdiction-specific requirements. Once notice from the Department of Labor is developed, employers should promptly disseminate this to employees, by posting at worksites as well as sending electronically in the event employees are working remotely. Finally, although the FFCRA’s paid leave provisions do not cover those who are self-employed, those individuals would be eligible to receive tax credits of up to two weeks of EPSLA at their average pay and 12 weeks of EFMLA at two-thirds their normal rate.
****Prior Guidance to employers regarding Covid19 from the US Department of Labor (link) https://www.dol.gov/agencies/whd/fmla/pandemic
****Sample Leave Policy from ADP (link) https://sbshrs.adpinfo.com/covid19-policies
