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President Trump Signs “Families First Coronavirus Response Act” (H.R. 6201)

On March 25, 2020 the DOL’s Wage and Hour Division issued it’s first round of guidance. Read about it here


On Wednesday, March 18, 2020, President Trump signed into law the “Families First Coronavirus Response Act,” which passed by a majority of votes in both houses of Congress. The leave provisions will go into effect on April 1, 2020 (which is 15 days after the law’s passage).

Below is a summary of the Act’s key provisions:

 

Emergency Family and Medical Leave Expansion Act

Start Date: April 1, 2020

End Date: Automatic sunset December 31, 2020

 

Employer Size

  • Private employers with fewer than 500 employees (and covered public sector employers) for COVID-19 related leave issues (for non-COVID-19 related issues, the FMLA thresholds remain the same, 50 or more employees within 75-mile radius).
  • “Health care providers” and “emergency responders” may opt out of coverage. The Secretary of Labor will be vested with authority to further define these terms.

Employee Coverage

  • Applies to both full and part time employees who worked for employer for 30 calendar days or more;
  • For COVID-19 related leave issues (for non-COVID-19 related issued, the FMLA requirement of 1,250 hours within prior 12 month period remains the same).

Qualifying Leave

  • Leave is available for “qualifying need related to a public health emergency,” which is defined as an employee being unable to work due to a public health emergency due to:
    • A need for leave to care for a son or daughter under 18 years of age of such employee if the school or place of care has been closed;
    • Or if the child care provider of such son or daughter is unavailable.

Amount of Leave/Benefit Calculation

  • Provides up to 12 weeks of FMLA leave.
  • First ten days may be unpaid, but employees may choose to use available paid sick leave, vacation, or other PTO.
  • Ten of the weeks must be paid at a rate “not less than two-thirds of an employee’s regular rate of pay,” based on either:
    • The number of hours the employee would have otherwise have been expected to work; or
    • If the employee works non-regular hours, based on the employee’s six-month average.

Caps

  • $200/day per employee.
  • $10,000 in the aggregate per employee.

Job Restoration

  • Employees must generally be restored to their previous position or an equivalent position.
  • Employers with fewer than 25 employees have a narrow exception to the restoration requirement if the employee’s position no longer exists due to economic conditions or changes in the employer’s operations caused by the public health emergency.
    • Such employers must make a reasonable effort to restore the employee to the position held and if such efforts fail must make reasonable efforts to contact the employee for up to one year if an equivalent position becomes available.

Exemptions for Businesses with Under 50 Employees

  • The Secretary of Labor is granted the authority to issue regulations for good cause to exempt “small businesses with less than 50 employees” if the imposition of the requirements would “jeopardize the viability of the business as a going concern.”

Damages Limitation

  • Civil FMLA damages are excluded for lawsuits initiated by employees against employers that employ less than 50 employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.

 

Emergency Paid Sick Leave Act

Start Date:  April 1, 2020

End Date:  Automatic sunset December 31, 2020

 

Employer Size

  • Private employers with fewer than 500 employees (and covered public sector employers).
  • “Health care providers” and “emergency responders” may opt out of coverage. The Secretary of Labor will be vested with authority to further define these terms.

Employee Coverage

  • Available for full and part time employees.
  • No waiting period.

Qualifying Leave

  • Paid sick leave is available for employees that are “unable to work (or telework)” and the employee:
    • Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
    • Has been advised by a health care provider to self-quarantine because of COVID-19;
    • Is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
    • Is caring for an individual subject or advised to quarantine or self-isolate;
    • Is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
    • Is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Amount of Leave/Benefit Calculation

  • Full time employees: 80 hours.
  • Part time employees: the number of hours equivalent to the average amount of hours worked by such employees over a two-week period.
  • Unused leave does not carry over year to year.

Caps

  • Payment at the employee’s regular rate, subject to a maximum of $511 per day/$5,110 in the aggregate for situations where:
  • The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to COVID-19 concerns; or
  • The employee is experiencing symptoms of COVID-19 and seeks a medical diagnosis.

OR

  • Employees receive two-thirds of their regular rate of pay, up to a maximum of $200 per day/$2,000 in the aggregate, in situations where:
    • The employee is caring for an individual who (1) is subject to a quarantine or isolation order, or (2) has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
    • The employee is caring for a child of that employee whose school or care provider has been closed, or if the child care provider is unavailable due to COVID-19 concerns.  The statute imports the FMLA’s definition of “son or daughter” which confirms that its scope includes stepchildren, adoptive children, and foster children;
    • A catchall provision where 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.”  The parameters of this final subgroup have not been clearly delineated and will presumably require additional regulatory clarification.

Restrictions

  • Employers cannot require that employees first use sick leave under the employer’s normal benefits scheme before using the sick leave under the act.
  • As with the FMLA provisions of H.R. 6201, exceptions are made for employees who are health care providers and emergency responders. This exception is phrased in terms of allowing the employer of such employees to “elect to exclude such employee[s]” from these provisions.

Exemptions for Businesses with Under 50 Employees

  • The Secretary of Labor is granted the authority to issue regulations for good cause to exempt small businesses with less than 50 employees from providing leave for caring for children whose school or day care has closed or is unavailable if doing so “jeopardizes the viability of the business as a going concern.”

 

Tax Credits

The Act provides tax credits against an employer’s employment tax obligations for employers that have to provide benefits under the Act.  The Secretary has also been given authority to prescribe regulations or other guidance that provide for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the special credit.

 

Next Steps

While the Act is designed to provide immediate relief to employees through paid leave provisions and assist employers through tax credits, concerns remain for employers over potential cash flow issues that may emerge.  Small businesses may be able to take advantage over certain emergency small business loans.  Additionally, Congress is seeking to try to provide additional stimulus relief.

 

Further developments are expected in the coming days and weeks.  We will continue to provide you with alerts as they are released.

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