Employer Advisory Council of Orange County, Inc.

EAC Update

Families First Coronavirus Response 

Provided by from Scott & Whitehead

The “Families First Coronavirus Response Act” (H.R. 6201) was passed by the Senate and signed by President Donald Trump March 18, 2020. The Act was revised from the version initially passed by the House of Representatives.  This new Act takes effect on April 2, 2020 and sunsets on December 31, 2020.Click in the section and start typing to add content.

The Act has two critical components for private employers with fewer than 500 employees:

• Emergency Paid Sick Leave (“PSL”) -- Starting on April 2, 2020, such employers must make available up to 80 hours of paid sick leave for COVID-19 related absences (as defined below) for all employees regardless of length of employment; and
   
• Emergency Family and Medical Leave (“FMLA Emergency Leave”) -- Starting on April 2, 2020, such employers must offer 10 days of unpaid leave and up to 10 weeks of paid leave when an employee is unable to work or telework due to a need to care for his or her child (under age 18) because the child’s school or place of care has been closed or the child care provider of the child is unavailable due to a “public health emergency.”

IMPORTANT: These new FMLA Emergency Leave provisions apply to employers with fewer than 50 employees who have not traditionally been covered by the FMLA.  As a result, thousands of employers not previously subjected to the FMLA may be required to provide job-protected leave to employees for certain COVID-19 related reasons.

Emergency Paid Sick Leave Act

Which employers are covered? All private employers with fewer than 500 employees and certain public employers are covered. The Department of Labor is authorized to draft regulations to exempt small businesses with fewer than 50 employees when the provisions would jeopardize the viability of the business as a going concern, but such regulations have not been published or implemented to date.

Which employees are covered? All employees regardless of length of employment are covered. The Act allows employers who employ health care provider or emergency responder employees to elect to exclude them from PSL, but it does not define those terms. The Department of Labor is authorized to draft regulations related to this exemption, but no regulations have been published or implemented to date.   

What must covered employers do? Employers must immediately make available up to 80 hours of PSL for full-time employees and prorated PSL for part-time employees (calculated by taking the number of hours the employee works on average over a two week period).

The employer must offer PSL where the employee is unable to work (or telework) due to a need for leave because:

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 concerns related to COVID-19;
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 a federal, state or local quarantine or isolation order related to COVID-19  or an individual who has been advised by health care provider to self-quarantine due to concerns related to COVID-19. (NOTE:  This is very broad as it extends to any individual, not just a family member);
5. The employee is caring for his or her child because the school or place of care  of the child has been closed or child care provider of such child is unavailable due to COVID-19 precautions; or
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.

The employee can use the PSL immediately and can opt to use it before using other types of employer provided leave. The employer cannot require the employee to use other paid leave before using PSL. PSL is paid out at the employee’s regular rate when taken for reasons 1-3 (above), and at 2/3rds the employee’s regular rate when taken for reasons 4-6 (above). PSL does not carry over to next year and does not need to be paid out at termination. After the first workday that the employee receives PSL, an employer may require the employee to follow reasonable notice procedures in order to continue receiving PSL.

PSL offered by employers cannot diminish the rights or benefits an employee is entitled to under any other federal, state or local law, any collective bargaining agreement or any employer policy. Employers cannot require employees to search for a replacement employee to cover scheduled work time as a condition of using PSL. Employers cannot discharge, discipline or otherwise discriminate against an employee who takes PSL, or who files a complaint or initiates any proceeding related to this Act or who has testified or is about to testify in such a preceding.

Employers must post a notice of the requirements of this Act to be prepared and approved by the Secretary of Labor. The notice must be placed in conspicuous places on the employer’s premises where notices to employees are customarily posted.  The Act orders the Secretary of Labor to prepare a model notice and make such notice available to employers seven days after the Act’s enactment which is March 25, 2020.  

Employers violating the this Act are in violation of the Fair Labor Standards Act and subject to its penalties.

PSL payments can be capped at $511 per day per employee, and $5,110 in the aggregate per employee if taken for reasons 1-3 (above) and $200 per day per employee, and $2,000 in the aggregate per employee if taken for reasons 4-6 (above).  Importantly, the employer will be entitled to seek tax credits for these PSL payments subject to these caps.

Emergency Family and Medical Leave Expansion Act

Which employers are covered? All private employers with fewer than 500 employees and certain public employers are covered.  The Department of Labor is authorized to draft regulations to exempt small businesses with fewer than 50 employees when the provisions would jeopardize the viability of the business as a going concern, but such regulations have not been published or implemented to date.

Which employees are covered? Any employee who has been employed by the employer for at least 30 calendar days is covered. The Act allows employers who employ health care provider or emergency responder employees to elect to exclude such employees from FMLA Emergency Leave, but it does not define those terms. The Department of Labor is authorized to draft regulations related to this exemption, but no regulations have been published or implemented to date.  The usual FMLA requirements that the employee have been employed for a year, worked for at least 1,250 hours, and works in a location where there are 50 employees within a 75-mile radius DO NOT apply.

What must covered employers do? An employer must offer up to 10 days of unpaid FMLA Emergency Leave and up to 10 weeks of paid FMLA Emergency Leave when an employee is unable to work (or telework) due to a need to care for the employee’s child under 18 years of age if the child’s school or place of care has been closed or the child care provider of such a child is unavailable due to a “public health emergency.”  A “public health emergency” means an emergency with respect to COVID-19 declared by a federal, state or local authority.

The first 10 days of the FMLA Emergency Leave are unpaid.  During the initial unpaid 10 days the employee may use PSL or elect to substitute any accrued vacation leave, personal leave, or medical or sick leave already offered by the employer.  The subsequent leave time of up to 10 weeks is paid at 2/3rds of the employee’s regular rate of pay and is capped at $200 per day per employee, and $10,000 in the aggregate per employee. Employees are to give “notice of leave as is practicable.” 

The FMLA’s normal reinstatement rules apply to FMLA Emergency Leave with the exception of employers with fewer than 25 employees if the following conditions are met: (1) the employee takes FMLA Emergency Leave; (2) the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a public health emergency during the period of leave; (3) the employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment; and (4) if the reasonable efforts of the employee under point (3) fail, the employer makes reasonable efforts during a designated one year period to contact the employee if an equivalent position described becomes available.

Importantly, employers will be able to seek tax credits of up to $200 per day and $10,000 in aggregate per employee for FMLA Emergency Leave they have paid out.

Going Forward

Employers with fewer than 500 employees should immediately begin preparations to provide notice to their employees through postings and policies. We are available to assist with these efforts and to answer any questions. We will continue to monitor this rapidly developing situation and provide updates as appropriate.

For employers wishing to understand how the tax credit provisions of these laws will impact them, we strongly encourage them to seek advice from their tax preparer.

This bulletin is provided as a service to our clients and other friends to highlight current developments in the law. It is not intended to provide a legal opinion or specific legal advice. Should issues arise involving these, or other legal matters, please contact Scott & Whitehead at (949) 222-0166 or the EAC Office at (714) 794-4253.  

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Employer Advisory Council of Orange County

The Employer Advisory Council of Orange County is a non-profit group, run by HR professionals and attorneys, as a low-cost approach to business and human resource solutions. Membership entitles you and your associates to low-cost HR workshops, timely updates on breaking legislation affecting your business practices and access to an HR Attorney Hotline. For more information on the EAC, visit our website at https://www.eac-oc.com

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