Updated March 25, 2020
In our continuing effort to keep The Kullman Firm’s clients up to date regarding labor and employment law developments related to COVID-19, we are sharing guidance on the Families First Coronavirus Response Act in a question and answer format. If you would like to discuss this new legislation, or have other questions, please do not hesitate to contact The Kullman Firm attorney(s) with whom you work.
What does the Families First Coronavirus Response Act mean for my company?
On March 18, 2020, the Senate passed the Families First Coronavirus Response Act (FFCRA), and President Trump signed it into law. On March 24th, the Department of Labor (DOL) issued additional guidance. The FFCRA contains several pieces of legislation, including the Emergency Paid Sick Leave Act (EPSLA), which provides paid sick leave, and the Emergency Family and Medical Leave Expansion Act (EFMLEA), which provides an additional qualifying event for protected leave under the Family Medical Leave Act (FMLA) for eligible employees. The EPLSA and EFMLEA apply to private employers with fewer than 500 employees total and public employers of any size. Employers may exclude health care provider employees and emergency responder employees from both paid leave under the EPLSA and emergency FMLA leave under the EFMLEA.
The legislation provides that the Secretary of Labor can issue regulations exempting employers with fewer than 50 employees under both statutes if complying would jeopardize the viability of the business. To qualify for the small business exemption, employers should document why they meet the criteria to be set forth by the DOL in the forthcoming regulations. Employers should not send any materials to the DOL when seeking a small business exemption for paid sick leave and/or expanded family and medical leave.
These statutes become effective on April 1, 2020. Absent further legislation, the EPLSA’s and EFMLEA’s respective requirements relating to paid sick leave and emergency FMLA leave expire on December 31, 2020.
Under these statutes, employers will be able to seek dollar for dollar tax credit for payments made pursuant to the EPSLA and EFMLEA, provided that such payments are made for qualifying absences taken on or after April 1. To take immediate advantage of the paid leave tax credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week. These tax credits will not be available to employers who are not required to comply with the provisions of the FFCRA or for payments to employees for non-qualifying reasons.
While both statutes overlap and contain similarities, there are some distinctions worth exploring.
EMERGENCY PAID SICK LEAVE ACT
Which employees are entitled to paid sick leave?
The EPSLA is solely for employees impacted by COVID-19 and applies to individuals who (1) are subject to quarantine by a federal, state or local order due to COVID-19, (2) have been advised by a health care provider to quarantine, (3) are experiencing symptoms and are seeking a medical diagnosis, (4) are taking care of an individual subject to a quarantine or who has been advised to quarantine, (5) are staying at home to care for a son or daughter of such employee whose school or place of care has closed, or where the child care provider is unavailable due to COVID-19 precautions, or (6) are experiencing similar conditions specified by the Secretary of Health and Human Services in consultation with the Secretaries of Labor and Treasury.
How much paid leave is required?
For individuals who are quarantined for COVID-19, who have been advised to quarantine, or who have symptoms and are seeking a medical diagnosis, described in (1)-(3) above, employers are required to compensate them for such absences up to 80 hours, or ten (10) eight-hour days, at their regular rate/salary, not to exceed $511/day, for an aggregate maximum of $5,110. Part-time employees must be paid for the typical number of hours they are scheduled to work in a two-week period. Employees who are taking care of someone who has been quarantined, who are staying home with children because schools are closed, or who are experiencing similar conditions specified by Health and Human Services, described in (4)-(6) must be paid 2/3 of their regular rate/salary, not to exceed $200/day, for an aggregate maximum of $2,000.
Paid sick time is available as described above regardless of how long an individual has been employed at your company—there is no minimum threshold of employment under the EPSLA.
Can we require employees to use vacation time before or instead of using the paid sick leave mandated by the EPLSA?
No; the requirements of the EPSLA are in addition to any benefits employees are already entitled to under your company’s policies prior to the passage of the EPLSA. Employers cannot require employees to find other employees to cover shifts for them as a pre-condition to taking this paid leave, and employers are prohibited from retaliating against employees for taking such leave.
Are there posting requirements?
Employers are required to post and keep posted in a conspicuous place a notice informing employees of their rights under the EPSLA. The DOL’s has issued a Model Notice which we have shared on our website.
What are the penalties for non-compliance?
The EPSLA provides that a failure to pay emergency sick leave shall be deemed a failure to pay minimum wages in violation under the Fair Labor Standards Act (FLSA), and penalties under the FLSA will apply—backpay, liquidated damages (double back pay) for willful violations, and potential civil penalties and fines.
EMERGENCY FAMILY MEDICAL LEAVE EXPANSION ACT
What do I need to know about the EFMLEA?
Like the EPSLA, the EFMLEA is solely for individuals impacted by COVID-19 insofar as it relates to childcare-related reasons. In addition to paid sick leave under the EPSLA, eligible employees are entitled to receive up to 12 weeks of expanded emergency FMLA leave. The first 10 days can be unpaid (unless payment is required by the EPSLA or other applicable law or policy), but the remainder must be paid. EFMLEA protected leave is only available to employees staying at home to care for a child under 18 years of age whose school or place of care has been closed or whose childcare provider is unavailable due to the COVID-19 virus. In order to qualify for emergency FMLA leave, individuals must have been employed by the employer for at least the 30 days immediately preceding the requested leave.
Are any employees excluded from the EFMLEA?
As with paid sick leave, an employee may exclude health care provider employers and emergency responders from coverage under the EMFLEA.
Does the employee have to satisfy normal FMLA requirements?
No. While ordinarily, to qualify for protected leave under the FMLA, an employee must have worked for the employer for one year and must have worked at least 1,250 hours during that time, under the EFMLEA, the only requirement is that the employee have been on the company’s payroll for at least the 30 days immediately preceding the requested leave. If a worker is working for a company as a temporary employee, and the company subsequently hires the worker on a full-time basis, the worker may count any days previously worked as a temporary employee toward the 30-day eligibility period.
How much are employees required to be paid during EFMLEA leave?
After the first unpaid 10 days of emergency leave, employers are required to pay employees 2/3 of their regular rate/salary, capped at $200 per day, for an aggregate maximum of $10,000.
Can we require an employee to exhaust his/her existing sick leave, PTO, and vacation leave before using emergency FMLA leave?
No. Unlike normal leave under the FMLA, employers cannot require employees to draw down accrued leave during the first two weeks of emergency FMLA leave. Employees can, however, elect to use PTO or accrued time during the first 10 days of emergency leave, as that time is otherwise unpaid. DOL guidance is to date unclear on whether employers can draw down an employee’s accrued PTO during the remaining 10-weeks of paid EFMLEA leave or not. Notably, while the EPSLA specifically prohibits employers from doing this, the EFMLEA contains no such prohibition. Employers are required to maintain benefits for employees when they are out on EFMLEA leave.
What are an employee’s job restoration rights after taking emergency FMLA leave?
EFMLEA leave is generally job-protected. In most cases, employees returning from EFMLEA leave must be returned to the same or equivalent position. Smaller employers with 25 or fewer employees are exempt from this requirement where the position does not exist due to economic conditions or other changes that affect employment and were caused by a coronavirus-related emergency declared by a governmental authority. However, employers must make certain efforts in order for this exemption to apply (including attempting to restore the employee to an alternate position and contacting the employee about openings for up to a year).
Are there any notice requirements of employees?
The EFMLEA simply states that after the first day of EFMLEA leave, an employer has the right to require “reasonable notice procedures.” The FMLA contains detailed procedures as to what information employers can obtain, when they can obtain it, what they can do with it, and who they may talk to about it. It will remain to be seen how these procedures will apply in this pandemic. As many employers are closing or moving to work-from-home models, notice requirements and return-to-work notes will probably be much less significant than in an ordinary working economy.
Since legal developments pertaining to COVID-19 are constantly evolving, we recommend that our clients call the Kullman Firm attorney(s) with whom they work for the most current guidance on these matters.