COVID-19: Emergency Imposition of Paid Family Medical and Sick Leave
The House of Representatives passed a broad piece of legislation that requires employers with fewer than 500 employees to provide paid sick leave and paid family medical leave to employees. The bill, entitled the Family First Coronavirus Response Act (the “Bill”) passed in the house on Sunday morning and now faces review by the Senate. While the Senate could revise some portions, the Bill has broad support and is expected to pass. The Bill has two components that profoundly impact employers at a time when they have also had to curtail business due to the extreme measures put in place to combat the spreading of COVID-19.
The Bill contains two separate provisions meant to assist families who are required to take time off work related to shutdowns, sick leave, and family leave because of COVID-19. Both provisions apply to employers with fewer than 500 employees. The first provision, the Emergency Family and Medical Leave Expansion Act (“the FMLA Expansion Act”), set out in more detail below, significantly expands the employees who are eligible for FMLA and employers that must provide leave. The second provision, the Emergency Paid Sick Leave Act (“PSLA”), provides a federal requirement for two weeks of paid COVID-19-related sick leave. Both provisions are effective 15 days after the passage of the Bill in the Senate.
The Emergency Family and Medical Leave Expansion Act
The FMLA Expansion Act provides an exclusion for employers who have fewer than 50 employees when the imposition of paid leave “would jeopardize the viability of the business as a going concern,” but does not define that phrase. The Act also excludes some health care providers and emergency responders. Here are the details:
Expanded Definition of “Employee”
The Act revises the definition of an eligible employee from an employee who has worked at least 1,250 hours in the preceding 12 months to an employee who has worked for at least 30 days.
Expanded Definition of “Family Member” to include Employee’s Parent
The Act revises the definition of “parent” (with respect to the employee) to include any of the following:
- A biological, foster, or adoptive parent of the employee.
- A stepparent of the employee.
- A parent-in-law of the employee.
- A parent of a domestic partner of the employee.
- A legal guardian or other person who stood in loco parentis to an employee when the employee was a child.
Expanded Qualifying Needs for Leave
A “qualifying need” for leave during a public health emergency is now added as a reason for leave and includes:
- To comply with a recommendation or order by a public official having jurisdiction or a health care provider on the basis that:
- The physical presence of the employee on the job would jeopardize the health of others because of:
- Exposure of the employee to coronavirus; or
- Exhibition of symptoms of coronavirus by the employee; and
- The employee is unable to both perform the functions of the position of such employee and comply with such recommendation or order.
- The physical presence of the employee on the job would jeopardize the health of others because of:
- To care for a family member of an eligible employee with respect to whom a public official having jurisdiction or a health care provider makes a determination that the presence of the family member in the community would jeopardize the health of other individuals in the community because of:
- The exposure of such family member to coronavirus; or
- Exhibition of symptoms of coronavirus by such family member.
- 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 childcare provider of such son or daughter is unavailable, due to a public health emergency.
Paid FMLA Leave
The Act requires employees to take unpaid leave for the first 14 days of leave, and an employee may elect to take paid leave or vacation benefits. The new Act does not state that the employer can require the employee to take any accrued but unused leave, but allows the employee to opt in, which is different from FMLA, which allows employers to require employees to substitute paid leave.
After the first 14 days of leave, employers must provide paid leave, which cannot be less than two-thirds of the employee’s regular rate of pay, as determined under the Fair Labor Standards Act, and based on the number of hours that the employee would normally work.
There are special rules for determining the number of hours if an employee works a varying shift. In that case, the employer must use the average number of hours that the employee was scheduled per day over the six-month period prior to the date the employee takes leave, including hours for which the employee took leave of any type, or if the employee did not work over that period, the average number of hours that the employee would normally be scheduled to work.
The amount of paid leave depends on the length of leave for each employee based on their independent leave needs. This Bill sunsets on December 31, 2020, and employees can potentially obtain up to 12 weeks of COVID-19-specific leave, depending on their circumstances.
The notice rules require that an employee provide practicable notice if the need for leave was not foreseeable.
Employers with fewer than 25 employees do not have to restore employees to their former position if the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in the employer’s operating conditions that affect employment, and are caused by a public health emergency during the period of leave. The employer must makes reasonable efforts to restore the employee to an equivalent and suitable position in terms of benefits, pay, and other terms and conditions of employment. If the employer cannot locate an equivalent and suitable position, then the employer must make efforts to contact an employee regarding the opening of a position for the one-year period beginning on the earlier of the date that leave concludes or the date that is 12 weeks after commencement of the leave.
An employers with a multibargaining agreement may, consistent with its bargaining obligations and its collective bargaining agreement, fulfill its obligations under the new FMLA Expansion Act by making contributions to a multiemployer fund, plan, or program based on the paid leave each of its employees is entitled to under such section while working under the multiemployer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program, based on hours they have worked under the multiemployer collective bargaining agreement for paid leave taken under the FMLA Expansion Act.
Employees who work for an employer under a multibargaining agreement may secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement for paid leave taken under the FMLA Expansion Act.
The Emergency Paid Sick Leave Act
The PSLA requires that an employer provide all employees, no matter how long they have been employed, up to two weeks of paid sick leave for five COVID-19-specific reasons:
(1) To self-isolate because the employee is diagnosed with coronavirus.
(2) To obtain a medical diagnosis or care if such employee is experiencing the symptoms of coronavirus.
(3) To comply with a recommendation or order by a public official with jurisdiction or a health care provider because the physical presence of the employee on the job would jeopardize the health of others, or because the employee has symptoms of coronavirus.
(4) To care for or assist a family member of the employee who is self-isolating because the family member has been diagnosed with coronavirus or is experiencing symptoms and needs to obtain medical diagnosis or care. This provision requires that a public official with jurisdiction or a health care provider make a determination that the presence of the family member in the community would jeopardize the health of other individuals in the community.
(5) To care for the child of such employee if the school or place of care has been closed, or the childcare provider of such child is unavailable, due to coronavirus.
The PSLA requires that employers make paid sick leave available for immediate use without requiring that employees use other available leave before the COVID-19 paid sick leave. Employers must pay full-time employees up to 80 hours of paid leave, and part-time employees the number of hours that they work on average in a two-week period. This leave is use it or lose it and will not carry over into 2021. Employees may only receive paid sick leave for the specific reasons listed above, and sick leave payments end if the employee returns to work. Employers cannot require that employees find replacements while on paid sick leave. If the employee’s need for sick leave is to care for a family member, as set out in numbers 4 and 5 above, then the amount of paid sick leave is limited to two-thirds of their regular wages. The Department of Labor will issue guidelines for computing paid sick leave rates.
This paid leave is in addition to any leave an employer provided prior to the effective date of this Act, even if used for COVID-19 purposes.
The Department of Labor will provide a model notice for use by employers, which employers must post in a conspicuous place where they normally post notices.
The law makes discrimination or retaliation because an employee took COVID-19 paid sick leave a violation of the law. Further, employees will be able to file wage claims if an employer fails to pay sick leave benefits.
Multiemployer Bargaining Agreements
As with the new FMLA Expansion Act, an employer with a multiemployer bargaining agreement may fulfill its obligations under the PSLA by making contributions to a multiemployer fund, plan, or program based on the hours of paid sick time each of its employees is entitled to under this Act, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement and for the specific COVID-19 uses specified.
The Bill also contains unemployment provisions and tax credits for self-employed individuals and independent contractors. Employers must get ready for this new financial hit at a time when they are facing shutdowns and slowdowns in their business.
Employer Required Closures
An interesting provision of the new Bill is that there is not a requirement to pay sick leave or to provide FMLA where the employee is not at work because the employer chose to close the office. In this case, employees may be eligible for unemployment.
Tax Credits for Employers
The Bill includes a provision for a tax credit that is allowed against the employer’s Social Security taxes equal to 100% of qualified paid sick leave or family leave wages that an employer must pay for each calendar quarter. There are limitations and caps, however. The amount of wages with respect to any individual shall not exceed $200 for employees who must stay home to care for a quarantined family member, or $511 in the case of any day any portion of which is paid sick time described in for sick or quarantined employees.
Please visit Schwabe's COVID-19 resource page for more information.