March 20, 2020
THE EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
Part of the Act makes significant changes to the Family and Medical Leave Act (“FMLA”). Generally speaking, the FMLA applies to employers with 50 or more employees who worked at least 20 weeks during either the current year or preceding year, and covers employees who have worked for an employer for at least 12 months and 1,250 hours within the last 12 months. Based on these guidelines, many smaller businesses are not required to comply with the FMLA.
However, the new Public Health Emergency Leave provided under the Act greatly expands the number of employers who must comply with the newly passed law and also greatly expands the number of employees who are eligible for protection. The new law is set to take effect no later than 15 days after enactment (April 2), and will remain in effect until December 31, 2020 (unless otherwise expanded).
The new law will cover ALL employers with fewer than 500 employees, which encompasses a huge number of employers who are not subject to FMLA requirements. Likewise, the new law will cover all employees who have been on payroll for at least 30 days, drastically increasing the number of employees eligible for protection and benefits.
The new law provides up to 12 weeks of job-protected leave to eligible employees who miss work due to a qualifying need related to a public health emergency (as defined). The first 10 days of the leave may be unpaid, and during this time an employee may utilize accrued PTO, vacation time, or sick leave if the employee chooses to do so (employers may not force employees to use this time). After this initial 10 day period, the employer is required to provide paid leave to the employee for 10 weeks. The paid leave requires that the employer provide paid leave at a rate which is at least two-thirds of the employee’s regular rate of pay and based on the employee’s normally-scheduled work weeks. Such pay is not to exceed $200 per day or $10,000 over the course of the leave.
Employees are eligible to use the new leave where such employee is not able to work (either physically at work or remotely) in order to care for the employee’s minor child if the child’s school or caregiver establishment is closed due to an emergency relating to COVID-19 declared by a federal, state, or local authority. To the extent possible, the employee is to provide the employer with as much advance notice as is practicable, but notice will likely be minimal. Because the leave is protected, the employer is required to allow the employee to return to his/her position (or its equivalent) at the conclusion of the leave. For a business with less than 25 employees, an exception may be granted where: (1) that employee’s position no longer exists due to economic conditions or other changes in the employer’s operating conditions resulting from the public health emergency; and (2) despite the employer’s reasonable efforts, an equivalent position is not available. In such circumstances, the employer has an affirmative duty to make reasonable efforts to contact the employee if an equivalent position becomes available for a period of one year.
There are indications that the Secretary of Labor may issue regulations to exempt small businesses with fewer than 50 employees from these new provisions on a case-by-case basis, where requiring compliance would jeopardize the viability of the business as a going concern. It is unclear how this process will work or what evidence will be required for the exemption to apply.
EMERGENCY PAID SICK LEAVE ACT
In addition, the new law creates the Emergency Paid Sick Leave Act. This portion of the law also covers any employer with less than 500 employees, and covers all employees of those employers without regard to how long a particular employee has worked for the employer.
Employees may claim the benefits of the Emergency Paid Sick Leave Act where they are unable to work (physically present in the place of work or remotely) as a result of a government quarantine related to COVID-19, where they have been advised by their health care provider to self-quarantine as a result of potential or actual exposure to COVID-19, where they are experiencing symptoms of COVID-19 and are seeking a diagnosis regarding the same, where they are caring for an individual who is subject to a government quarantine or self-quarantine as advised by a health care provider, where they are caring for a minor child whose school or care center is closed as a result of COVID-19, or where they are otherwise experiencing any substantially similar issues or conditions identified by agencies of the federal government.
Under the Emergency Paid Sick Leave Act, full time employees are entitled to 80 hours of emergency leave and part-time employees are entitled to leave in the amount of their average number of hours worked over a two week period. Where the employee is entitled to leave based on his or her own health issues described above, the rate of pay for leave shall be the greater of the employee’s regular rate of pay, the FLSA minimum wage rate, or the state or local minimum wage rate where the employee is employed. In no event will an employee’s pay be greater than $511 per day or $5,110 over the entire course of the leave. Where the employee is entitled to leave to care for a family member or child, the rate of pay for leave shall be two-thirds of the employee’s regular rate of pay, but shall not exceed $200 per day or $2,000 over the entire course of the leave. Additional guidelines will be provided by the Secretary of Labor. Under no circumstances will the employer be required to pay out unused leave in the event of termination of the employment relationship.
Employers shall not discharge, discipline, or discriminate in any manner against any employee who attempts to use emergency paid sick leave or who participates in proceedings relating thereto. Employers are also not allowed to require employees to use other accrued paid leave (vacation, PTO, sick leave) prior to using emergency paid sick leave. Employers are required to post notices to notify employees of the availability of this leave in a conspicuous place at the place of work where other similar notices are posted. The Secretary of Labor is supposed to provide a model notice shortly.
TAX CREDITS FOR PAID SICK AND PAID FAMILY AND MEDICAL LEAVE
Employers are supposed to receive refundable tax credits for providing qualified sick leave wages discussed above to employees. The tax credit is equal to 100% of qualified sick leave wages paid by the employer during each calendar quarter between the enactment of the new law and December 31, 2020. Employers are likewise supposed to receive a tax credit equal to 100% of qualified paid family leave wages paid by the employer during each calendar quarter between the enactment of the new law and December 31, 2020.