On March 18, 2020, the Families First Coronavirus Response Act (“FFCRA” or the “Act”) was enacted. The Act provides certain sick and family leave benefits for employees absent from work for reasons related to COVID-19, tax credits for employers who provide leave pursuant to the Act, and additional funding to the states for unemployment benefits. The law will become effective not later than April 2, 2020 and expires on December 31, 2020.
As noted, the leave and tax credit provisions of the Act apply only to employers with fewer than 500 employees (and government employers).
Emergency Paid Sick Leave
Under the Act, full-time employees are entitled to take up to 80 hours of paid sick leave. Part-time employees are entitled to take paid sick leave equal to the average number of hours the employee works over a 2-week period.
Which employees are eligible for emergency paid sick leave?
Each employee, regardless of length of employment, is eligible for the leave, except that an employer may exclude employees who are health care providers or emergency responders. Employers may not require that employees search for or find a replacement as a condition to taking sick leave.
Under what circumstances may sick leave be taken?
(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
(3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to a quarantine order (as in (1) above) or been advised by a health care provider to self-quarantine (as in (2) above).
(5) The employee is caring for their child whose school or daycare has been closed, or the child care provider of the child is unavailable due to COVID–19 precautions.
(6) The employee is 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.
What is the “rate of pay” for sick leave?
It depends why the leave is taken. For reasons (1) through (3) above, sick leave is paid at the employee’s regular rate of pay, subject to caps of $511 per day ($5,110 in total). For reasons (4) through (6) above, sick leave is paid at two-thirds of the employee’s regular rate of pay or minimum wage, whichever is greater, subject to caps of $200 per day ($2,000 in total).
Is this paid sick leave paid out at termination or carried over year-to-year?
No. This leave does not have to be paid out at termination and is not carried over to the following year.
What is the relationship between the paid sick time required by the Act and other paid leave an employer already provides?
Paid sick leave under the Act is in addition to any other paid leave an employer chooses to provide or is required to provide under other applicable laws, such as Maryland’s Healthy Working Families Act (“sick and safe leave”). In other words, an employer may not dock other available leave banks when an employee takes the paid sick leave available to them under the Act.
Can employers require that employees first use other types of available leave before accessing the paid sick leave?
No. The Act specifically provides that an employer may not require an employee to use other paid leave provided by the employer before using this paid sick time.
Are employees who take leave protected from discrimination or retaliation?
Yes. It is unlawful to fire or otherwise discriminate against an employee who takes leave or who files or participates in a complaint about violations of the Act.
Emergency Family and Medical Leave Expansion
The Act expands the current Family and Medical Leave Act (FMLA) to provide 12 weeks of job-protected leave to eligible employees who are unable to work (or telework) because their minor child’s school or childcare service is closed or unavailable due to an emergency related to COVID-19 declared by a Federal, State, or local authority.
Which employees are eligible for leave?
Employees are eligible for leave if they have been on the employer’s payroll for at least 30 calendar days.
Is the expanded childcare leave paid or unpaid?
The first 10 days of leave under the Act may be unpaid, although employees may elect to substitute accrued paid time off (such as vacation, personal, or sick leave—including emergency paid sick leave as detailed above) during this period. After the initial 10 days, employers must pay an employee at least two-thirds of the employee’s regular rate of pay based on the number of hours the employee would have been scheduled to work if not out on leave. Payment is capped at $200 per day or $10,000 in total.
What if an employee doesn’t have a set schedule?
For an employee whose schedule may vary from week to week, the employer can use the average number of hours the employee was scheduled to work per day over the 6-month period that ends on the date the employee takes leave. If the employee did not work over this 6-month period, the employer may use the employee’s “reasonable expectation” at the time of hire of the average number of hours the employee would normally be scheduled to work.
Is the employee entitled to reinstatement following leave?
At the end of an employee’s leave under the Act, the employee has the same rights to reinstatement as under the FMLA. However, companies with 25 or fewer employees are not required to reinstate an employee if the employee’s position has been eliminated due to economic conditions or other operating changes caused by COVID-19 and the employer is unable to reinstate the employee to an equivalent position.
Is there anything else I should know?
It is important to note that the Act authorizes the Department of Labor (DOL) to issue implementing regulations that may (1) exclude certain health care providers and emergency responders from being eligible employees; and (2) exempt businesses with fewer than 50 employees from providing leave for childcare related to COVID-19 if providing such leave would jeopardize the viability of the business. The DOL has not yet issued such regulations.
Tax Credits for Paid Sick and Paid Family and Medical Leave
Employers who provide emergency paid sick leave and emergency FMLA leave pursuant to the Act are eligible for refundable tax credits against payroll taxes, equal to 100% of the wages paid (subject to the caps described above).
Emergency Unemployment Insurance Stabilization and Access Act of 2020
As part of the FFCRA, the Emergency Unemployment Insurance Stabilization and Access Act of 2020 allocates $1 billion in emergency grants to states for activities related to processing and paying unemployment compensation benefits.
Of that amount, $500 million will provide immediate funding to states for administrative costs. States must meet certain requirements to receive this funding, including requiring employers to notify employees of the availability of unemployment compensation benefits at the time of their separation from employment.
The remaining $500 million will provide support to states that have seen a marked increase in claims for unemployment compensation from the same quarter in the previous calendar year. Recipient states are required to demonstrate steps taken to increase access to unemployment compensation for claimants, including waiving work search requirements and the waiting week and not charging employers directly impacted by COVID-19. Direct impact may be due to an illness in the workplace or direction from a public official to quarantine or otherwise isolate employees. These measures will vary state by state.
Employers should make preparations now in order to be compliant with the Act no later than April 2, 2020. Because of the temporary nature of the Act, employers may consider creating a new policy or guidance document implementing the terms of the Act, rather than modifying all of their existing sick leave, attendance, and FMLA policies. The DOL will soon issue a “model notice” to employees describing the requirements of the Act.
Please contact Steve Metzger, Sydney Fortmann, Kathy Hoskins, Saul Gilstein, or another member of the firm’s Employment Practice Group if you have any questions or require assistance addressing the Act’s terms.
This client alert is for informational purposes and is not legal advice. The COVID-19 crisis has created a very fluid situation, in which changes to the law or related guidance can occur on a daily basis. Please contact your legal advisor for assistance before acting in relation to the subject of this client alert.
Saul E. GilsteinOf Counsel
Saul Gilstein offers clients his substantial experience in several diverse areas of practice including commercial leasing, the taxation of real estate, and employment law. He represents both landlords and tenants in commercial lease negotiations and has vast experience in counseling and defending clients with regard to sensitive employment matters and claims.