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COVID-19: New Federal Paid Leave Requirements

March 19, 2020

Overview

On March 18, 2020, Congress passed and the President signed into law HR 6201, a broad-ranging response to the COVID-19 outbreak. Two principal provisions of HR 6201 will impact employers—a temporary expansion of the Family and Medical Leave Act (FMLA) to provide paid leave for employees unable to work due to closure of schools and child-care facilities and temporary paid sick leave for COVID-19-related absences. HR 6201 will become effective April 1, 2020 (15 days after enactment).

Emergency FMLA (EFMLA) Leave

  • Applies to employers with fewer than 500 employees
  • Only covers absences due to COVID-19 school and child-care closures
  • First 10 days of leave are unpaid (but employees can use other paid leave)
  • Remainder of 12-week leave period is paid at two-thirds of employee’s normal rate times employee’s normal workweek
  • Cap limits required EFMLA pay to $200 per day and $10,000 total
  • Limited carve-outs for health-care providers, emergency responders, and employers with fewer than 25 employees, to be clarified by regulations

Which Employers Are Covered?

HR 6201’s EFMLA provisions apply to all employers with fewer than 500 employees, as do the emergency sick-leave requirements discussed in the next section. The Department of Labor has authority to issue regulations exempting businesses with fewer than 50 employees when requiring EFMLA and/or emergency sick leave “would jeopardize the viability of the business as a going concern.”

Which Employees Are Covered?

In contrast to FMLA’s 12-month waiting period, employees are eligible to take EFMLA leave once the employee has been employed for at least 30 calendar days. Employers may exempt health-care providers and emergency responders from eligibility for EFMLA leave. The scope of this exemption is unclear, but will be clarified by regulations from the Department of Labor.

What Purposes Allow Taking EFMLA Leave?

EFMLA leave under HR 6201 is for a single purpose—inability to work (in person or remotely) because of the need to care for a child under the age of 18 due to a school or child-care facility closure caused by an emergency declared by federal, state, or local authorities related to COVID-19. It does not cover other COVID-19 related absences—although ordinary FMLA and the paid sick-leave provisions of HR 6201 may cover such absences.

What Does EFMLA Leave Require?

EFMLA leave under HR 6201 is a 12-week period of job-protected leave. The first 10 days of leave are unpaid, although an employee may choose to use any available paid leave (vacation, PTO, sick leave, emergency paid sick leave, or personal leave) during the first 10 days. Employers may not require employees to take paid leave to cover the first 10 days of EFMLA.

After the 10-day period of unpaid leave, the EFMLA leave must be paid. At minimum, the paid leave must be at two-thirds of the employee’s regular rate of pay (as determined under the Fair Labor Standards Act (FLSA) for overtime purposes) for the employee’s normally scheduled hours. However, the paid leave requirement need not exceed $200 per day and $10,000 in total.

If an employee’s regularly scheduled hours are variable, HR 6201 requires use of the average hours worked—including hours where the employee took any kind of leave—over a six-month lookback period. If an employee with variable hours did not work during the six-month lookback period, HR 6201 requires payment of EFMLA based on “the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.”

What Happens When EFMLA Leave Ends?

Generally, EFMLA leave is job-protected to the same extent as ordinary FMLA leave—the employer generally has an obligation to reinstate the employee to their prior position, or an equivalent position with equivalent pay and benefits. HR 6201 makes a limited exception for employers with fewer than 25 employees when such employers experience COVID-19-related economic adversity causing the loss of the employee’s prior position. Under these circumstances, the employer’s obligation is to (1) make reasonable efforts to restore the employee to an equivalent position, and (2) if these “reasonable efforts” fail, to make reasonable efforts to contact the employee about any equivalent positions that become available in the 12-month period following the earlier of the end of the need for EFMLA leave or the end of the 12-week EFMLA leave period.

What About Collective Bargaining Agreements?

HR 6201 contains a limited exception for employers who are signatories to multiemployer collective bargaining agreements, to the extent employees can access pay for EFMLA leave under a multiemployer plan. Under such circumstances, the employer must pay into the multiemployer plan based on the paid EFMLA leave eligible employees take. Outside of this limited exception, EFMLA leave is in addition to any paid leave provided for under a CBA.

Emergency Paid Sick Leave Act

Like the EFMLA, the Emergency Paid Sick Leave Act (EPSLA) applies to employers with fewer than 500 employees and allows additional paid leave for employees who cannot work or telework for certain COVID-19-related reasons. Like the EFMLA, this Act becomes effective on April 1, 2020, and remains in effect until December 31, 2020. Unlike the EFMLA, paid sick leave is available to all employees even if they have not yet worked 30 days. This Act also does not have a 10-day waiting period.

In addition, of significance to Oregon and Washington employers, an employer may not require an employee to first use other paid leave provided by the employer before the employee uses paid sick leave. In other words, an employer may not dock any accrued sick leave or PTO banks of the employee until after the employee has used their emergency paid sick leave provided as a result of this Act. This paid leave is in addition to any other accruals the employee may have. An employee may request to use this paid leave during the initial 10 days that are unpaid under the EFMLA.

Allowable Reasons for Emergency Paid Sick Leave

An employee may take paid sick leave because the employee is:

  1. subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. advised by a health-care provider to self-quarantine due to COVID-19 concerns;
  3. experiencing COVID-19 symptoms and seeking medical diagnosis;
  4. caring for an individual subject to a federal, state, or local quarantine or isolation order or advised by a health-care provider to self-quarantine due to COVID-19 concerns;
  5. caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to a public health emergency; or
  6. experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Employers should note that under this statute, the employee need not be taking care of a family member to be eligible. An employee taking care of a coworker or a neighbor or friend would qualify for sick leave under reason 4.

Emergency Sick Leave Hourly Entitlement

  • Full-time employees are entitled to 80 hours of sick-leave pay.
  • Part-time employees are entitled to the number of hours of pay they worked for the six months prior to taking paid sick leave. If they have worked less than six months prior to leave, they are entitled to the average number of hours the employee would normally be scheduled to work over a two-week period.

Sick Leave Payment and Caps

  • Sick leave is paid at an employee’s normal hourly rate but capped at a total of $511 per day up to $5,110 total per employee if used for reasons 1-3 above, in other words, for the employee’s own needs.
  • Sick leave is paid at two-thirds the employee’s rate if used for reasons 4-6 above and capped at $200 per day up to $2,000 total.

Penalties for Failure to Comply

The Act protects employees from discrimination or retaliation for taking emergency sick leave, and treats failure to pay such amounts as a minimum wage violation under the FLSA with penalties for employers who are not in compliance.

Uncertainties

There are a number of items that do not seem to be addressed by the Bill. For example, does an employer get credit for payments made voluntarily under any of the circumstances above that are made before the effective date? May an employer on a prospective basis cut back normal PTO or sick pay accruals for the remainder of the year to offset some of this paid leave?

Schwabe’s employment attorneys are closely monitoring these developments and will update clients as additional information regarding these questions becomes available. To learn more, read a related article, or view an informational video, please visit Schwabe's COVID-19 resource page.

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