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March 2020

Families First Coronavirus Response Act: House Passes Bill Mandating Two Forms of Paid Leave

Last updated March 17, 2020

In the early morning hours of Saturday, March 14, 2020, by a vote of 363-40, the United States House of Representatives responded to the coronavirus (“coronavirus” or “COVID-19”) outbreak by passing H.R. 6201, the Families First Coronavirus Response Act (“FFCRA” or “Act”). Significantly, the Act requires many employers to provide eligible employees with up to two weeks of paid sick days and up to twelve weeks of federal emergency leave benefits, subject to certain limitations. This bipartisan congressional aid package is expected to pass the Senate and President Trump has already signaled that he fully supports the Act and has encouraged all Republicans and Democrats to come together and pass this emergency legislation. 

On Monday, March 16, however, as the Act was proceeding to the Senate, it hit a roadblock when Rep. Louie Gohmert, who voted against passage of the Act, objected to forwarding the bill to the Senate based upon technical irregularities that occurred in its hasty passage. That roadblock was cleared that same evening when the House approved a set of “technical corrections” by unanimous consent. Rep. Gohmert commented that these technical corrections, which are substantive, “make the bill better than it was when it got passed.” Several Senators have already indicated that they support the Act as amended and passage of this bill appears likely, although it is unclear if there will be additional modifications inserted by the Senate (which would require House approval). We will continue to monitor this legislative response to an unprecedented public health emergency.

In addition to providing for free coronavirus testing and food aid to vulnerable populations, this bipartisan legislation contains several important provisions that employers should be aware of. It is imperative that employers familiarize themselves with these potentially new obligations and begin making preparations to respond to and accommodate employee questions and requests related to COVID-19.

Emergency Family and Medical Leave Expansion Act

As currently drafted, the Emergency Family and Medical Leave Expansion Act (“FMLA Expansion Act”) amends the federal Family and Medical Leave Act of 1993 (“FMLA”) by requiring that eligible employers provide up to twelve weeks of public health emergency leave to employees who have worked for the employer for at least 30 days. Notably, while FMLA defines employer as one with fifty or more employees, the FMLA Expansion Act covers employers with fewer than 500 employees. Although the first 10 days of this emergency leave may be unpaid, employees may elect to substitute any accrued vacation, personal or medical or sick leave during this 10-day period. The remainder of the employee’s emergency FMLA leave must be paid at a rate equal to no less than two-thirds of the employee’s regular rate of pay. Critically, the House’s revision to this Act contained a crucial limitation on an employer’s pay obligation. Specifically, under the revised version, the Act provides: “In no event shall such paid leave exceed $200 per day and $10,000 in the aggregate.”

While the original version of the Act allowed employees to obtain paid leave for their own exposure to or symptoms of the virus or to care for family members who are subject to quarantine, the revised version only permits use of this leave in circumstances where an “employee is unable to work (or telework) due to a need to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”

Like the FMLA, the FMLA Expansion Act requires employers to restore the employee to their prior position at the end of the leave. However, for small employers, there are exceptions. Small businesses with 25 or fewer employees have to provide job protection unless (1) the position held by the employee when the leave commenced does not exist due to economic conditions or other changes caused by the public health emergency; and (2) the employer makes reasonable efforts to restore the employee to the position within one year after the date leave is needed.

The Act also permits the Secretary of Labor to promulgate regulations (1) to exclude certain health care provider and emergency responders from the definition of eligible employee, and (2) to exempt small businesses with less than 50 employees from providing this paid leave if the imposition of these requirements would jeopardize the viability of the business as a going concern.

The bill exempts employers with fewer than 50 employees in a 75-mile radius from civil damages in an employee lawsuit for an alleged violation of the FMLA Expansion Act.

Finally, the Act, which shall take effect 15 days after enactment and expires on December 31, 2020, provides employers with tax credit assistance. Under the FMLA Expansion Act, employers will be able to claim a credit for wages paid up to $200 per employee per day, but no more than $10,000 total per employee.

Emergency Paid Leave Act of 2020

Under this section of the Act, effective no later than 15 days after the date of enactment of this Act, employers must provide paid sick time (PST) to employees who are unable to work (or telework) for any of the following reasons:

(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 COVID-19 concerns.
(3) The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to an order as described in (1) above or has been advised to self-quarantine as described in (2) above.
(5) The employee is caring for a son or daughter if the school or place of care of the child 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 Treasury and the Secretary of Labor.

Notably, while the original version of the Act required employers to pay for this leave at the employee’s regular rate of pay, the revised version imposes limits on the amount that employers are required to pay. Specifically, the bill limits an employer’s paid leave obligation to $511 per day and $5,110 in the aggregate for a use described in paragraphs (1), (2) or (3) above (generally, an employee’s own health condition or quarantine) or $200 per day and $2,000 in the aggregate where the leave is taken for a use describe in paragraphs (4), (5) or (6) above (generally to care for others or school closure.)

Like the FMLA Expansion Act, this provision of the Act also applies to all private employers with fewer than 500 employees. Under the current version of the Act, there is no employment duration required and employers must provide this benefit immediately to all employees. It entitles full time employees to 80 hours of PST. Part time employees are entitled to receive pay based on the average number of hours that the employee worked over a two week period. This benefit may fill the gap of the ten days of unpaid leave for eligible employees under the FMLA Expansion Act, discussed above.

The Act does not diminish the rights or benefits that an employee is entitled to under any other Federal, State or local law, collective bargaining agreement or existing employer policy. Significantly, a provision in the prior version of the Act stated that if the employer already had a policy that provided paid leave, the “paid sick time under this Act shall be made available to employees of the employer in addition to such paid leave; and . . . the employer may not change such paid leave on or after such date of enactment.” That provision was stricken during the “technical corrections” phase and this deletion suggests that employers can amend their paid leave policies to adapt to changing business realities.

An employer may exclude employees who are health care providers or emergency responders from coverage under this Act. In addition, the Act grants the Secretary of Labor the authority to issue regulations to: (a) exclude certain health care providers and emergency providers from the definition of employee and by allowing their employer to opt out; (b) exempt small businesses with less than 50 employees from this obligation if the imposition of paid leave would jeopardize the viability of the business as a going concern; and (c) ensure consistency between the FMLA Extension Act and the Emergency Paid Leave Act. If enacted, the Secretary of Labor must issue a model notice to be posted at worksites within seven days of enactment and must issue guidance on the calculation of PST within fifteen days of enactment.

Employers will be entitled to a payroll tax credit for wages paid as PST under this Act. Specifically, employers will be able to claim a credit up to $200 per employee for employees who use such leave for care for children and up to $511 per day for employees who use such leave for prevention, care and treatment of the virus.

This provision of the Act expires on December 31, 2020.

Emergency Unemployment Insurance Stabilization and Access Act of 2020

This Act proposes to expand unemployment benefits and would direct $1 billion in federal aid to state unemployment insurance programs in response to the recent spike in coronavirus-related layoffs and terminations. Eligible employees who are either diagnosed with COVID-19, or have lost their jobs due to the spread of the virus would not be required to certify that they are able, available and actively looking for work.

Conclusion

If enacted, most employers will be impacted by the significant changes to employee leave benefits and unemployment insurance provided for in the Families First Coronavirus Response Act. While it is anticipated that the Senate will take prompt action, this bill has not been passed and key provisions are subject to change. But, employers should be aware of these imminent pending changes and should contact their CSG counsel to review their policies to ensure compliance with these new provisions immediately upon enactment.

Chiesa Shahinian & Giantomasi PC will continue to track this legislation and provide updates. If you have any questions about implementing policies relating to this Act, COVID-19 and/or responding to employee concerns, please feel free to reach out to your CSG attorney or the authors listed here.

For additional information pertaining to the coronavirus outbreak, please visit CSG's COVID-19 Resource Center.


This publication contains general information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Attorney Advertising. Prior results do not guarantee a similar outcome.

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