* With Contributions by Attorney Melissa Schilling
After the U.S. House of Representatives made a number of changes to the “Families First Coronavirus Response Act,” the Senate passed H.R. 6201, the Families First Coronavirus Response Act, by a vote of 90 to 8 on March 18, 2020. President Trump signed the bill on the same day and the law will become effective within 15 days of President Trump’s signature, on April 2, 2020. Primarily, the law requires employers with fewer than 500 employees to provide paid family leave to employees who are caring for a child due to a school or daycare closure, and requires private employers with fewer than 500 employees to provide two weeks of paid sick leave to full-time employees for six COVID-19 related absences. The Act sunsets on December 31, 2020.
The following is a summary of the key provisions private sector employers need to be aware of:
Family Medical Leave Act (“FMLA”) for COVID-19 Absences
For the sake of differentiating regular FMLA from emergency FMLA, we’ll call this new type of FMLA “EFMLA.”
- The law amends and expands the FMLA to provide 12 weeks of job-protected paid leave for eligible employees of employers with fewer than 500 employees for a new qualifying reason (see the third bullet point below).
Yes, you read that right. Smaller employers are the target of this law. Employers with more than 500 employees do not have to provide paid EFMLA. There is no guidance as to when, or over what period of time, an employer must use to count the 500 employees. Those employers who hover around the 500 employee mark should seek guidance from legal counsel versed in the FMLA to determine if they are covered by this Act.
There is no indication in the Act as to whether EFMLA provides employees with an additional 12 weeks of leave on top of any other regular FMLA leave the employee may use or may have used. To the extent the Act amends the FMLA, it would seem EFMLA is not an additional 12 weeks of leave. If you have employees requesting or needing EFMLA who also are using regular FMLA, you should seek guidance from legal counsel versed in the FMLA.
- Eligible employees include employees who have worked at least 30 calendar days for the employer.
This is a drastically reduced eligibility criteria for EFMLA when compared with the eligibility requirements for regular FMLA.
- Employees can take EFMLA when they are unable to work or telework because they must care for a child due to their son’s or daughter’s school being closed due to a public health emergency, or due to their child care provider being unavailable due to a public health emergency.
A “public health emergency,” is a COVID-19 emergency declared by federal, state, or local authority.“School” is an elementary or secondary school. “Child care provider” is one who receives compensation for providing child care services on a regular basis. (Sorry, grandpa and grandma, but you probably do not qualify as a child care provider for EFMLA purposes.) There is no explanation for what being “unavailable” means. EMFLA is only available to care for children under age 18.
Most importantly, employers and employees, alike, should note that this is a very narrow qualifying reason for EFMLA. Employees who do not have children under 18 in their households will not be able to take EFMLA.
- The first 10 days of EFMLA leave may be unpaid; however, an employee may choose to use accrued personal or sick leave during this time.
This is different from the employer’s ability to require use or paid leave before going unpaid for regular FMLA. Here, the employee is in control and can conserve paid leaves to use at a later time. Only some employees on EFMLA will also qualify for emergency paid sick leave (see below).
- After the first 10 days of EFMLA, employers must compensate employees in an amount not less than two-thirds of the employee’s regular rate of pay multiplied by the number of hours the employee would have been scheduled to work; however, “in no event shall such paid leave exceed $200 a day and $10,000 in the aggregate.” Special rules apply for determining the number of hours to use for employees who work varying schedules, and when the employer is unable to determine with certainty the number of hours the employee would have worked.
The regular rate of pay, per the Act, defaults to the Fair Labor Standards Act’s definitions and rules. Unfortunately, the FLSA regular rate rules only apply to non-exempt employees. Exempt employees do not usually track their work hours and are not usually scheduled for a certain number of hours, making it difficult for employers to apply the formula for calculating EFMLA pay. Assuming the employee requesting EFMLA is normally scheduled for, or normally works, 40 hours per week, they could receive up to 480 hours of EFMLA under this Act. The caps of $200/day or $10,000 in the aggregate mean a 40-hour per week employee can be no more than $25 per hour. If their pay is higher than that, they will take a haircut, and many FLSA-exempt employees make more than this cap.
This begs some questions: How should employers calculate EFMLA pay for employees who are exempt from the FLSA when the hours part of the formula is difficult to determine and the regular rate part of the formula does not apply? Is EFMLA intended for FLSA-exempt employees at all?
- At the end of EFMLA use, employees are entitled to restoration to their previous job or an equivalent job, as with regular FMLA – with one exception. Employees of employers with less than 25 employees are not entitled to be restored to their job if four conditions are met. First, the employee was using EFMLA, not regular FMLA. Second, the employee’s position no longer exists because of economic conditions or other changes in operations that affect employment and were caused by the public health emergency occurring during the period of EMFLA. Third, the employer made reasonable efforts to restore the employee to an equivalent position. Finally, if those efforts failed, the employer made reasonable efforts during a post-leave period to contact the employee when an equivalent position becomes available. The contact period is the one-year period beginning on the earlier of either the date when the EFMLA qualifying reason ended, or the one-year period beginning 12 weeks after the date when the employee’s EFMLA began.
Talk about complicated. Sadly, some of the smallest employers may need to take advantage of this carve-out, no matter how complicated it may be. Again, seek the assistance of legal counsel versed in the FMLA.
- The Department of Labor has the authority to exempt small businesses with fewer than 50 employees from the paid family leave requirements, for good cause, and when such requirements would “jeopardize the viability of the business as a going concern.” In addition, employers with less than 50 employees on each day of 20 or more calendar weeks in the preceding or current calendar year are not subject to civil suit if they violate the EFMLA amendments to the FMLA.
These provisions of the Act provide some relief to smaller employers, and, at first blush, appear to dis-incent smaller employers from providing EFMLA. However, the Act does not exempt smaller employers from action by the Department of Labor for violations. Also, the process for the DOL’s small business exemption is not provided in the Act, and will require further guidance or regulation from the DOL. That guidance will not likely arrive before small employers have to make a compliance decision. Again, seeking the assistance of legal counsel versed in the FMLA is recommended.
- Employers of health care providers or emergency responders can exclude these employees from EFMLA. The DOL will issue regulations for good cause on this provision of the Act.
Until the DOL issues those regulations, employers of health care workers should keep in mind that “health care provider” (“HCP”) is a defined term under FMLA regulations and that definition has been adopted and incorporated within the Act’s amendments for EFMLA. HCP’s include: doctors of medicine or osteopathy, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse-midwives, clinical social workers, physician’s assistants, and Christian Science Practitioners listed with the First Church of Christ. If your health care workers are not on this list, then it appears they cannot be exempted from the EFMLA provisions of this Act.
- Tax credits are available for employers who provide EFMLA for employees, including credits against FICA and adjustments to gross income.
Emergency Paid Sick Leave (“EPSL”) for COVID-19 Absences
For the sake of differentiating regular sick leave employers might have from emergency paid sick leave, we’ll call this new type of sick leave “EPSL.”
- Private sector employers with fewer than 500 employees must provide 80 hours of paid sick leave to full-time employees who are unable to work or telework because of one or more qualifying reasons:
(1) The employee is under a government quarantine or isolation order related to COVID-19.
(2) The employee is self-quarantined due to COVID-19 concerns, per the advice of a health care provider (the definition of HCP to be used is the one in the FMLA).
(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 #1 or #2, above.Note that there is no limitation on who the individual may be for qualifying reason #4.
(5) The employee is caring for a son or daughter (as defined in the FMLA; under 18 years of age) if their school has been closed due to COVID-19 precautions, or if their child care provider is unavailable due to COVID-19 precautions. Note that COVID-19 precautions for this #5 is a lesser burden that required under #1.
(6) The employee is experiencing “any other substantially similar condition” specified by the Secretary of the Department of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. This catch-all qualifying reason for using EPSL is vague and confusing. Does the “condition” refer to #1-#5? Does “condition” mean the employee must be experiencing flu-like symptoms but does not have COVID-19?
- EPSL is available for immediate use by the employee regardless of how long the employee has been employed by the employer. An employee who has only worked for one day is eligible for EPSL.
- The rate at which full-time employees are paid for EPSL depends on the specific reasons triggering the leave.
- Employees taking EPSL for reasons #1-#3 are paid for the number of hours they would otherwise have been normally scheduled to work multiplied by the greater of their regular rate of pay under the FLSA, the FLSA’s minimum wage, or the minimum wage applicable under state or local law. Pay for EPSL taken for reasons #1-#3 is capped at no more than $511 per day or $5,110 in the aggregate. Note that these caps are significantly higher than the EFMLA caps and the EPSL caps for reasons #4-#6. For a 40-hour per week employee, these caps work out to more than $63 per hour (or $132,860 per year).
- Employees taking EPSL for reasons #4-#6 only receive two-thirds of the calculation provided in the bullet point just above this one. Pay for EPSL taken for reasons #1-#3 is capped at no more than $200 per day or $2,000 in the aggregate. Note that these caps are lower than EPSL taken for reasons #1-#3, but match the EFMLA caps.
This is complicated, but help is on the way. The Act requires the DOL to provide guidance on these pay calculations within 15 days after enactment, or by the effective date of April 2, 2020.
- Employers must provide part-time employees with EPSL on a pro-rata basis, equal to the number of hours they work, on average, over two weeks. There is no explanation as to what two-week period the employer should use to determine the average house. Special rules apply to part-time employees who work a varying schedule and when the employer is unable to determine with certainty the number of hours the part-time employee would have worked over the two week period.
- The availability of EPSL ends with the next scheduled work shift immediately following the termination of the need for EPSL. In other words, once the trigger reason(s) for using EPSL ends, the employee must return to work for their next regularly scheduled shift. This and other provisions of the Act suggest, but do not expressly state, that EPSL can only be used for one period of absence, and cannot be used intermittently or in more than one block of time. Employers with employees who wish to use EPSL intermittently should consult with legal counsel versed in employment law.
- EPSL sunsets on December 31, 2020, it cannot be carried over into 2021 and any unused portion of EPSL cannot be cashed out upon termination for any reason.
- An employer may not require an employee to use other paid leave provided by the employer before the employee uses EPSL. Any leave your company provides to employees can be saved while the employee uses EPSL.
- Employers may require employees to follow reasonable notice procedures to continue to receive EPSL.
- Nothing in the EPSL provisions of the Act reduce the rights or benefits due to employees under a collective bargaining agreement, other laws (federal, state, or local), or existing employer policies. Employers who adopted emergency paid leave policies ahead of the Act cannot apply those toward the EPSL obligations. EPSL must be provided in addition to any “existing” employer policies. Conservatively, existing policies include those in effect on the Act’s date of enactment (3/18/2020). Less conservatively, and for employers willing to take on more risk or who are willing to argue this in a legal proceeding, existing policies includes only those in effect on the Act’s effective date (4/2/2020). If you fall into the latter camp, you can try to rescind or reduce additional leave policies adopted before March 18.
- Employers are prohibited from retaliating against employees who take EPSL, who file a complaint or initiate a proceeding about EPSL violations, or who testify in any such action. The prohibition includes, specifically, discipline, discharge, and other discrimination.
- Employers must post a notice informing employees of their rights to leave. The DOL is to provide this poster within seven days after enactment, or by March 24, 2020.
- As with EMFLA, Employers of health care providers or emergency responders can exclude these employees from EPSL. The DOL will issue regulations for good cause on this provision of the Act.
Until the DOL issues those regulations, employers of health care workers should keep in mind that “health care provider” (“HCP”) is a defined term under FMLA regulations and that definition appears to have been adopted and incorporated within the Act’s EPSL provisions. HCP’s include: doctors of medicine or osteopathy, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse-midwives, clinical social workers, physician’s assistants, and Christian Science Practitioners listed with the First Church of Christ. If your health care workers are not on this list, then they cannot be exempted from the EFMLA provisions of this Act.
- As with the EFMLA, the Department of Labor has the authority to exempt small business with fewer than 50 employees from the paid family leave requirements, for good cause, and when such requirements would “jeopardize the viability of the business as a going concern.”
This provision of the Act provides some relief to smaller employers. The process for this small business exemption is not provided in the Act, and will require further guidance or regulation from the DOL. That guidance will not likely arrive before small employers have to make a compliance decision. Again, seeking the assistance of legal counsel versed in the FMLA is recommended.
- Violations of the EPSL provisions of the Act are a failure to pay minimum wage under the Fair Labor Standards Act, and will subject employers to the penalties provided under the FLSA.
- As with the EFMLA, tax credits are available for employers who provide EFMLA for employees, including credits against FICA and adjustments to gross income.
- Tax credits against personal income tax are also available for employees.
The Families First Coronavirus Response Act is complex, tricky, and must be understood quickly. Dickinson Law can help employers apply the Act to their workforces.