Families First Coronavirus Response Act becomes law

UPDATED MARCH 25, 2020

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act, which includes broad assistance to businesses and individuals. For employers and employees, the bill includes measures that expand the FMLA and provide for emergency paid leave for employers of 500 or fewer employees. The law is effective April 1, 2020, and will extend these protections through December 31, 2020. Note this effective date of April 1, 2020 is noted in the new DOL guidance issued on March 24, 2020 - click here to learn more.

Expansion of FMLA to COVID-19 leaves

The act expands the FMLA’s time off rights of up to 12 weeks of leave to encompass a “Public Health Emergency Leave” (referred to here as “FMLA-C19” leave).  The provisions of the act are summarized below:

  1. Reasons for FMLA-C19 leave - The act expands the scope of the FMLA to cover an instances where an employee is unable to work or telework due to the need to care for a child if the child’s school or place of child care has been closed or the child care provider is unavailable, due to a public health emergency (FMLA-C19). 

    Employers should note that as the result of amendments in the House, the scope of the leave is significantly scaled back. Employees who have the COVID-19 or are caring for a family can use the standard FMLA leave for “serious health conditions.”
  2. Eligible employees -  An employee employed for a least 30 days is eligible for the FMLA-C19 leave rights. This is in contrast to the FMLA which requires 12 months of employment for FMLA coverage.
  3. First 10 days of FMLA-C19 leave - The first 10 days of FMLA-C19 leave are unpaid. Employees may use accrued paid leave for this initial period or the emergency paid sick leave, if applicable.
  4. After the first 10 days - The remaining FMLA-C19 leave must be paid at two-thirds of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work. Significantly, the act caps the amount of required pay for leave to no more than $200 per day and $10,000 total.
  5. Notice requirement - The bill provides that an employee will provide the employer with as much “notice of leave as is practicable.”
  6. Job restoration - Employers with 25 or more employees must restore an employee to the same or similar job following any FMLA-C19 leave.
  7. Tax credit for wages - A refundable tax credit will be available for employers equal to 100% of qualified wages required to be paid for the Emergency FMLA-C19 leave for each calendar quarter.
  8. Note regarding site closures - Employers should understand that FMLA-C19 does not extend benefits for those not working because of site closures or other reasons not already covered by FMLA.

Emergency paid sick leave time for affected employees

The act provides for 80 hours of emergency paid sick time for full-time employees (pro-rata for part-time employees) for their own COVD-19 related reasons and 2/3rd pay to care for a family member.

The act allows use of emergency paid sick time for employees who are unable to work or telework for the following reasons:

Reasons for sick leave:

  • The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  • A health care provider has advised the employee to self-quarantine because of COVID-19.
  • The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
  • The employee is caring for an individual subject or advised to quarantine or isolation.
  • The employee is caring for a son or daughter whose school or place of care is closed,nor child care provider is unavailable, due to COVID-19 precautions.
  • The employee is experiencing substantially similar conditions as specified by the Secretary of HHS, in consultation with the Secretaries of Labor and Treasury.

Use of emergency paid sick leave

Employers should take note that all employees are immediately eligible for this leave, regardless of how long they have been employed. The emergency paid sick leave does not carry over from one year to the next.

Amount of pay for emergency paid sick leave

The act caps paid leave at $511 per day ($5,110 in total) where leave is taken for the employee’s own illness or quarantine and $200 per day ($2,000 in total) where leave is taken for caring for others or school closures.

Use of emergency paid time

  1. Sequencing - The act provides that an employee can first use the emergency paid sick time before using other paid time off provided by an employer.
  2. Coordination with existing policies - Importantly, if an employer already offers paid sick leave to its employees, emergency paid sick leave must be in addition to the already-existing leave. An employer cannot modify its sick leave policy to avoid offering additional leave.
  3. No discrimination or retaliation - The act also prohibits discrimination or retaliation against an employee for taking a coronavirus-related leave.
  4. Tax credit - Finally, to help defray the cost of the paid leave, the Act makes available a tax credit equal to 100% of sick leave wages paid by an employer.

Unemployment Benefits Expanded

The act also provides for emergency grants to states for activities related to processing and paying unemployment insurance (UI) benefits, under certain conditions, including requiring employers to provide notice of potential UI eligibility to laid-off workers

Implementation of the Act

The act is effective on April 2, 2020. Employers should act promptly to understand and comply with the act. The act directs the DOL to provide additional guidance within seven days. Employers should consider issuing policy supplement that communicates the provisions of the Act to employees. In addition, a notice posting will be required. McDonald Hopkins will provide updates on any developments.

McDonald Hopkins is closely monitoring the COVID-19 pandemic and its impact on employers. Should you need additional information or guidance of any kind, please contact your McDonald Hopkins attorneys or visit our coronavirus resource page.

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