Trump Signs the Families First Coronavirus Response Act Aimed to Relieve COVID-19’s Impact on Employees
On Wednesday, March 18, 2020, President Donald Trump signed into law the Families First Coronavirus Response Act (“the Act”), which provides paid sick leave and paid family medical leave expansion to workers in the United States affected by the novel coronavirus.FN1 The Act, which applies to employers with fewer than 500 employees,FN2 contains the following employment-related provisions:
1. 80 Hours of Paid Sick Leave
The Act requires employers with fewer than 500 employees to provide full-time employees with 80 hours of paid sick leave, and provide part-time employees with sick leave in the amount of their average number of hours worked over a two-week period, for any of the following reasons:
To self-isolate because of a COVID-19 diagnosis, or to comply with a recommendation or order to quarantine due to exposure or exhibition of novel coronavirus symptoms;
To obtain medical care if an employee is experiencing coronavirus symptoms;
To care for a family member diagnosed with, experiencing symptoms of, or quarantining due to, coronavirus; or
To care for child whose school has closed, or childcare provider is unavailable, due to the coronavirus.
The sick leave is immediately available to employees, regardless of length of employment, and must be provided in addition to any paid leave the employer already provides. An employee may elect to use this emergency paid sick time before using other available employer-provided paid leave, and the employer may not require them to do so. Employers are required to compensate employees for any paid sick time taken under the Act at 100% of their regular rates of pay. For the care of a family member, however, employees are only entitled to two-thirds of their regular rate of pay.
2. Paid Job-Protected Leave Under the Family and Medical Leave Act for Anticipated Childcare Needs
The Act also expands protections available under the Family Medical Leave Act (“FMLA”),FN3 allowing employees to take up to 12 weeks of job-protected leave when the employee is unable to work or telework due to a need for leave to care for a son or daughter under 18 years of age if the minor child’s elementary or high school or place of care has been closed, or the minor child’s paid child care provider is unavailable, due to the public health emergency related to the coronavirus.
The first 10 days of this FMLA leave may be unpaid,FN4 with the rest of the twelve weeks compensated at a rate no less than two-thirds of the employee’s usual rate of pay for their usual hours scheduled, up to a maximum of $200/day or $10,000 in the aggregate. At the employee’s sole discretion, the employee may elect to substitute his or her accrued paid time off, vacation leave, or other medical or sick leave during the first 10 days of unpaid leave, but an employer cannot require an employee to do so.
Only employees who have been on the employer’s payroll for at least 30-days are eligible to use this emergency FMLA leave for the same reasons listed above. Similar to traditional FMLA leave, leave under the Act is job-protected and an employer must return the employee to the same or equivalent position upon their return to work.FN5
3. Tax Credits for Paid FMLA and Sick Leave and $1 Billion for Emergency Unemployment Insurance
A series of tax credits are available to employers providing emergency sick leave or paid FMLA under the Act, including a refundable tax credit equal to 100% of qualified paid family or medical leave wages paid by the employer for each calendar quarter. The amount of qualified family leave wages for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability imposed for the employer’s portion of Social Security taxes, then the excess credit is refundable to the employer.FN6
Finally, the bill provides $1 billion in grants to states for emergency unemployment insurance: $500 million to provide immediate additional funding to all states for staffing, technology, and other administrative costs, subject to additional requirements; and $500 million reserved for emergency grants to states that experience at least a 10% increase in unemployment.
Takeaway
Employers with fewer than 500 employees must ensure compliance with the Act by April 2, 2020 (15 days after the date of enactment) and are required to post a notice provided by the Secretary of Labor by March 25, 2020 informing employees of the new policies.FN7 Additionally, employers may not discharge, discipline, retaliate or otherwise discriminate against any employee who takes leave or exercises other protected rights under the Act. Employers who violate the act are subject to the same punishment and penalties provided by the Fair Labor Standards Act (“FLSA”).FN8 Please contact Campbell Litigation, P.C. for assistance in complying with the Act.
Footnotes:
FN1: H.R. 6201, (March 11, 2020), https://docs.house.gov/billsthisweek/20200309/BILLS-116hr6201-SUS.pdf
FN2: Employers with fewer than 50 employees may be eligible for a hardship exemption through the U.S. Department of Labor if the provision of emergency paid sick time would jeopardize the viability of the business. See §§ 110(a)(3)(B) and 5111(2).
FN3: Although existing provisions of the FMLA do not apply to employers with fewer than 50 employees, the emergency family leave provision applies even to businesses with fewer than 500 employees. See § 110(a)(1)(B).
FN4: An employee may elect to substitute paid vacation, personal leave, or medical or sick leave, including the paid leave provided in the Act to cover the first 10 days of unpaid leave. See § 110(b)(1).
FN5: However, businesses with fewer than 25 employees are excused from the FMLA’s job restoration obligation if the employee’s position no longer exists due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a public health emergency during the period of leave, provided that the employer makes reasonable efforts to restore the employee to an equivalent position and, if such efforts fail, the employer makes reasonable efforts to contact the employee if an equivalent position becomes available during the following year. See § 110(d)(1)-(3).
FN6: “In the case of an employer, there shall be allowed as a credit against the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100 percent of the qualified family leave wages paid by such employer with respect to such calendar quarter.” See § 7003(a).
FN7: Employers are required to post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice prepared or approved by the Secretary of Labor stating the requirements of the Act. See § 5103(a). The Secretary of Labor shall make a model notice publicly available no later than 7 days after the Act’s enactment. See § 5103(b).
FN8: See § 5104 providing for Prohibited Acts.