On the evening of March 18 President Trump signed the Families First Coronavirus Response Act, a new law aimed at providing multifaceted relief to workers and families during the COVID-19 outbreak. This Act includes a number of provisions directly affecting employers, and the enacted version contains a number of changes from the bill first passed by the House of Representatives on March 14, 2020. The provisions of the new law affecting employee leave are summarized below. This summary also includes information about tax credits employers may utilize when providing emergency paid leave.

The Emergency Family and Medical Leave Expansion Act

The Family Medical Leave Act is amended to include up to 12 weeks of paid Public Health Emergency Leave. The Act takes effect 15 days after enactment of this Act and will remain in effect until December 31, 2020.

• Who is a Covered Employer? Private employers with fewer than 500 employees, and federal, state and local government and public agency employers. Additionally, the Secretary of Labor has the discretion to exempt small businesses with fewer than 50 employees when the imposition of the Act would jeopardize the viability of the business.

• Who is an Eligible Employee? Employee eligibility for a qualifying public health emergency is expanded to include employees that have been employed at least 30 calendar days with the employer from whom leave is requested.

• What is the Qualifying Purpose for Emergency FMLA? Eligibility for the emergency FMLA is limited to employees that are unable to work or telework due to a need for leave to care for a son or daughter under 18 years of age because the child’s school or place of care is closed or child care provider is unavailable, due to a public health emergency. 

• Do Employers Have to Provide All 12 Weeks as Paid? The first 10 days of the leave may be unpaid. The remainder of the leave shall be paid. Employees may elect to use any accrued paid time off, including medical and sick leave, during the unpaid leave if the first ten days of EFMLEA are unpaid. However, employers may not require employees to use such accrued paid time off.

• How Do Employers Calculate Paid Leave? In general, employees must be paid at a rate of two thirds of the employee’s regular rate and be based on the number of hours the employee would normally be scheduled to work. Employees whose schedules vary week to week may be paid based on (i) the average number of hours the employee was scheduled per day over the 6-month period ending on the date the employee takes EFMLEA leave; or (ii) if the employee has not worked 6 months, the reasonable expectation of the employee (at the time of hiring) of the average number of hours per day the employee would normally be scheduled to work.

• Is there a Cap on the Amount of Paid Leave Provided? Under the EFMLEA, paid leave shall not exceed $200.00 per day or $10,000 in the aggregate.

• Do Employers have to Restore Employees to their Jobs When They Return from Leave? Yes, just as employers are required to restore employees on FMLA to their former position, or a substantially similar position, employees from EFMLEA must be restored to their same position. However, employers with fewer than 25 employees may deny job restoration if certain economic conditions are met.

• What if I am an Employer Subject to a Multi-Employer Bargaining Agreement? These employers may fulfill their obligations through contributions to a multiemployer fund that permits employees to secure payment from the fund.

• What do the "Special Rules" for Certain Employers Mean?

  • An employer with fewer than 500 employees shall not be subject to civil actions by employees for a violation of the EFMLEA if the employer does not meet the amended definition of employer as set forth in the EFMLEA.

  • Employers of health care providers and emergency responders may elect to exclude employees from the provisions of the FMLA amendments.

The Emergency Paid Sick Leave Act ("EPSLA")

The EPSLA requires certain employers to provide emergency sick leave to any employees with a qualifying need. Specifically, covered employers must provide up to 80 hours of paid sick time to all full-time employees, and the average number of hours that a part-time employee works over a 2-week period to all part-time employees. The Act takes effect 15 days after enactment of this Act and will remain in effect until December 31, 2020.

The following summarizes key provisions of the EPSLA:

• Who is a Covered Employer? Private Employers with fewer than 500 employees and government employers. Covered employer also includes "any person acting directly or indirectly in the interest of an employer in relation to an employee" and "any successor in interest of an employer."

  • However, the DOL shall have authority to grant a hardship exemption to small businesses with fewer than 50 employees if paid sick leave would "jeopardize the viability of the business as a going concern".

• Who is an Eligible Employee? All Employees are eligible for paid sick time and may use immediately regardless of length of employment.

  • However, the DOL shall have the authority to issue regulations excluding certain healthcare providers and first responders from the definition of employee.

• What are the Qualifying Purposes? An employee may use paid sick time provided under the EPSLA if an employee is unable to work OR telework for the following COVID-19 related events:

  • The employee is subject to a Federal, State or local quarantine or isolation order related to COVID-19;

  • The employee has been advised to self-quarantine due to concerns related to COVID-19.

  • The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.

  • The employee must care for an individual that is subject to an order or has been advised to self-quarantine as described above.

  • The employee must care for leave to care for a son or daughter under 18 years of age because the child’s school or place of care is closed or child care provider is unavailable, due to COVID-19 precautions.

• What is the Rate of Paid Sick Time? Employees are entitled to their regular rate of pay unless leave is to care for a person subject to quarantine or a child whose school or child care is closed because of COVID-19 in which case the pay is reduced to two thirds the regular rate.

• What is the Cap Amount of Paid Sick Time? The paid leave benefit is capped at $511 per day and $5,110 in the aggregate for full-rate sick time and $200 per day and $2,000 in the aggregate for two thirds rate sick time.

• Will Unused Paid Sick Time Provided Under the EPSLA be Carried Over? No, Paid Sick Time provided under the EPSLA does not carry over from one year to the next.

• Can I Require an Employee to Find a Substitute Worker if They Need Paid Sick Leave? No, employers cannot be required to find a replacement employee to cover hours during which the employee is using paid sick time. This applies to all employers, including restaurants, coffee shops, etc.

• Can I require an Employee to Use Other Paid Leave Before the Emergency Paid Sick Leave? An employer may not require an employee to use other paid leave provided by the employer before the employee uses the emergency paid sick leave provided by the law.

• Are Employers Required to Notify Employees of these Benefits? If so, How? Employers must post a notice of employee rights. The DOL will provide a model notice for employer use within seven (7) days of enactment of the Act. 

Tax Credits For Emergency Leave Provisions

Employers may receive certain tax credits to offset the cost of the paid leave provided under the bill, including paid leave provided under the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. These credits are allowed against the Employer portion of Social Security taxes (tax imposed by Section 3111(a) or 3221(a)).

Tax Credits under the Emergency Family and Medical Leave Expansion Act

• An employer may receive a credit for each calendar quarter in an amount equal to 100% of the qualified family leave wages paid. Qualified family leave wages mean wages and compensation paid by an employer which are required to be paid by reason of the Emergency Family and Medical Leave Expansion Act.

• Limitations

  • Amount of qualified family leave wages paid are capped at $200 per day for each individual up to $10,000 per calendar quarter.

  • Credit is limited to the Social Security taxes on the wages paid with respect to the employment of all employees of the employer.

• Refundable Tax Credit

  • If the amount of the credit exceeds the employers portion of Social Security taxes for wages paid with respect to the employment of all employees of the employer, the excess is treated as an overpayment and is refundable

Tax Credits under the Emergency Paid Sick Leave Act

• An employer may receive a credit for each calendar quarter in an amount equal to 100% of the qualified sick leave wages paid. Qualified sick leave wages mean wages and compensation paid by an employer which are required to be paid by reason of the Emergency Paid Sick Leave Act.

• Limitations

  • Amount of qualified sick leave wages paid under the Emergency Paid Sick Leave Act are capped at $511 per day or $200 per day if the leave is for caring for a child or family member for up to 10 days per employee each calendar quarter.

  • Credit is limited to the Social Security taxes on the wages paid with respect to the employment of all employees of the employer.

• Refundable Tax Credit

  • If the amount of the credit exceeds the employers portion of Social Security taxes for wages paid with respect to the employment of all employees of the employer, the excess is treated as an overpayment and is refundable