March 26, 2020 Daniel Mirarchi

Helping you with the Families First Coronavirus Response Act

On March 18, 2020, the “Families First Coronavirus Response Act” was signed into into law.  Among other things, the Families First Act expands the Family and Medical Leave Act to help working parents who need to care for a child because their school or daycare is closed and provides mandatory paid sick leave for employees that are affected by COVID-19.  Some provisions of the new law that may affect both employers and employees dealing with the direct and indirect consequences of our response to the outbreak are described below. They are expected to go into effect on April 2, 2020, and lapse on the last day of this year, December 31, 2020.     

It expands the Emergency Family and Medical Leave Act. . . . 

Childcare Expansion.  The Emergency Family and Medical Leave Expansion Act provides employees with up to 12 workweeks of leave from when the expansion becomes effective through December 31, 2020 “because of a qualifying need related to a public health emergency[.]”  This only relates to when an employee is unable to work (or telework) because the employee needs to care for a child (under 18) if their school or daycare is closed in connection with COVID-19. It does not expressly expand coverage if an employee has a health issue related to COVID-19.    

Pay Rate.  The first 10 days may consist of unpaid leave, but am employee may choose to substitute any “accrued vacation leave, personal leave, or medical or sick leave for unpaid leave[.]”  After the first 10 days, an employer must provide paid leave for each day at a rate not less than two-thirds of an employee’s regular pay and be based on the number of hours an employee would otherwise be normally scheduled to work.  

This amount is capped at $200 per day and $10,000 in the aggregate.       

Covered Employer.  Companies with fewer than 500 employees are covered by this expansion.  Thus, companies with over 500 employee are exempted from this provision.  As described below, the Secretary of Labor may exempt employers with fewer than 50 employees if it meets certain criteria.      

Additional Exclusions.  The Secretary of Labor is also granted authority to issue regulations for the following:

  • To exclude certain healthcare providers and emergency responders from the definition of “employee” and allowing them to opt out; and 
  • Exempt businesses with fewer than 50 employees from providing sick pay to an employee caring for a child whose school or daycare is closed when it would jeopardize the viability of the business as a going concern.  (Emphasis added). 

Position Restoration.  Under FMLA, in most instances, an employee who takes leave shall be entitled to return to the position of employment previously held or restored to an equivalent position.  Under the expansion, however, this does not apply to employers with less than 25 employees and where: 

  1. an employee takes leave, 
  2. that position no longer exists due to economic conditions or other changes in operating conditons pf the employer that affect employment and are caused by COVID-19 during the leave period, 
  3. Employer makes a reasonable effort to restore the employee to an equivalent position, and 
  4. If reasonable efforts fail, the employer makes a reasonable effort after the “qualifying need” concludes or 12 weeks after the date the employee’s leave commences to contact the employee about an equivalent position.      

Tax Credits.  For each calendar quarter, an employer subject to the requirements  is permitted to take as a credit against certain taxes in an amount equal to 100% of the qualified family leave wages paid by the employer within each calendar quarter.  

Emergency Paid Sick Leave is mandated. . . .

Paid Sick Leave.  Under the “Emergency Paid Sick Leave Act,” an employer is required to provide its employees up to 80 hours for full time employees (and an average over two weeks for part-time employees) of paid sick leave where an employee is unable to work (or telework) because they:

  1. Are under a quarantine or isolation related to COVID-19;
  2. have been advised by a health care provider to self-quarantine due to COVID-19;
  3. are experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. are caring for an individual in quarantine or isolation because of COVID-19;
  5. are taking care of a child whose school or daycare is closed, or the childcare provider is unavailable, due to COVID-19; or
  6. are experiencing “any other substantially similar condition specified by the Secretary of Health and Human Services.”  

*An employer can exclude an employee who is a health care provider or an emergency responder from this subsection.  The act, however, does not define the terms “health care provider” or “emergency responder.” While some may be obvious, i.e., medical staff in an ICU, other may not be.   

The Emergency Paid Sick Leave Act is limited to private entities or individuals that has fewer than 500 employees.  In addition, it applies to public agencies that employs 1 or more employees.

Existing Sick Leave Policy.  The bill makes clear that it applies to all employees regardless of how long they worked for the company and an employer may not require an employee to use other paid sick time before paid sick time under the bill is triggered.   

Moreover, an employee can use paid sick time provided through the act first.  Likewise, an employer is prohibited from making an employee use other paid leave provided by the employer before the employee uses paid sick time provided in the act.  

Calculation.  Paid sick leave is calculated on the employee’s required compensation and the number of hours the employee would normally be scheduled to work.  In any case, paid sick time shall not exceed $511 per day and $5,110 in the aggregate for circumstances described in (1), (2), and (3) above. Likewise, it shall not exceed $200 per day and $2,000 in the aggregate for circumstances described in (4), (5), and (6) above.  The act states that an employee’s compensation “shall not be less than the greater” of an employee’s regular pay, the federal minimum wage, or state or local minimum wage. An employer, however, an employee is only required to two-thirds of their estimated pay if they are caring for a family member as identified in subparagraphs (4), (5), and (6).       

Prohibited Acts.  The Emergency Paid Sick Leave Act also prohibits an employer from firing, disciplining, or discriminating in any other manner against any employee who takes leave under this act.  Moreover, it contains an anti-retaliation provision that makes it unlawful to take similar adverse employment actions against any employee that filed a complaint or commenced a proceeding under the act or has (or will) testify in such proceedings.     

Tax Credits.  For each calendar quarter, an employer is permitted to take as a credit against certain taxes in an amount equal to 100% of the qualified sick leave wages paid.  

Additional Exclusions.  The Secretary of Labor is also granted authority to issue regulations for the following:

To exclude certain healthcare providers and emergency responders from the definition of “employee” and allowing them to opt out; and 

Exempt businesses with fewer than 50 employees from providing sick pay to an employee caring for a child whose school or daycare is closed when it would jeopardize the viability of the business as a going concern.  (Emphasis added). 

Final thoughts. . . 

First and foremost, we wish that everyone stays safe and health during this crisis. 

Faced with an unprecedented health crisis, the U.S. government crafted and passed this wave of legislation to respond to some immediate concerns of both employers and employees.  Since this law is new, its language and provisions may not be clear, please contact us if you need any help navigating them.

Written by Daniel J. Mirarchi, who is Of Counsel to Rogers Castor and handles a variety of commercial litigation matters for the firm.  Over the last 15 years, he has represented businesses, individuals, and public pension funds in securities, data breach, fraud, employment, breach of contract, and theft of trade secret matters. 

Learn about the author, attorney Daniel Mirarchi, of-counsel at Rogers Castor.

Read other articles by this author:

“HELP FOR SOME SMALL BUSINESSES ON THE WAY? THE SBA EXPANDS ITS 7(A) LOAN PROGRAM”