Paid Sick Leave and Family Medical Leave Expansion Becomes Law

By: Jeffrey L. Lund, J.D. and Jacob T. Palcic, J.D.

On March 18, 2020, the United States Senate approved the House-passed Families First Coronavirus Response Act, which President Trump signed into law a few hours later. The new law becomes effective on April 2, 2020, and expires on December 31, 2020.

The new law requires employers to provide emergency paid leave to eligible employees who miss work for various COVID-19-related reasons.  But it also gives employers a refundable payroll tax credit covering the entire cost of emergency paid leave—if the cost of emergency paid leave exceeds the employer’s payroll tax liability, the Internal Revenue Service (IRS) will refund the employer the difference as if it were a tax overpayment. The new law includes an expansion of the Family Medical Leave Act (FMLA) and emergency paid sick leave.

Emergency Family and Medical Leave Expansion Act

Covered Employers:

The law significantly amends and expands the FMLA effective April 2, 2020, at least for the remainder of calendar year 2020. Under the new law, private-sector employers with fewer than 500 employees, and public-sector employers (of any size), must provide up to 12 weeks of emergency FMLA leave for a “qualifying need related to a public health emergency” to eligible employees. As a result, thousands of employers not previously subject to the FMLA may be required to provide leave to employees for COVID-19 related reasons. However, the Secretary of Labor has the authority to exempt small business (defined as those with fewer than 50 employees) if the required leave would jeopardize the viability of their business.

Eligible Employees:

All full-time and part-time employees that have been on the employer’s payroll for 30 calendar days prior to the designated leave are eligible to receive paid family and medical leave. The Act excludes health care providers and emergency responders from entitlement to emergency FMLA leave, but leaves it to the Secretary of Labor to precisely define who falls within those excluded groups.

Reasons for Emergency Leave:

Employees are eligible for emergency FMLA leave only if they are unable to work (or telework) due to a need to care for a minor child if the child’s school or place of child care has been closed, or their care provider is unavailable, due to the COVID-19 public health emergency.

Paid Leave:

The first 10 days of emergency FMLA leave may be unpaid. An employee may elect to substitute accrued paid leave (such as vacation, PTO or sick leave) to cover some or all of this 10-day unpaid period. After the 10-day period, the employer must pay full-time employees at 2/3 the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. The Act limits this pay entitlement to $200 per day and $10,000 in the aggregate per employee.

Employees who work a part-time or irregular schedule are entitled to be paid on the average number of hours the employee worked for the 6 months prior to taking the FMLA leave. Part-time employees who have worked less than 6 months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.

Small Employers Can’t Be Sued:

The Act exempts employers with 50 employees or less from civil FMLA damages in a FMLA lawsuit, thus protecting such employers from liability for back pay and liquidated damages.

Job Restoration:

Employers with 25 or more employees are required to return any employee who has taken leave to the same or equivalent position upon return to work. However, employers with fewer than 25 employees are generally excluded from this requirement if the employee’s position no longer exists following the leave due to an economic downturn or other circumstances caused by a public health emergency during the period of leave. This exclusion is subject to the employer making reasonable efforts to return the employee to an equivalent position and requires the employer to make efforts to return the employee to work up to 1 year following the employee’s leave.

Emergency Paid Sick Leave Act

Covered Employer:

Covered employers include private employers with fewer than 500 employees, and public agencies of any size (federal/state governments, political subdivisions, schools).

Eligible Employees:

The full allotment of paid sick leave (discussed below) must be available for immediate use by an employee, regardless of how long the employee has been employed by the employer.

Reasons for Sick Leave:

Employers must provide paid sick leave to an employee who is unable to work or telework for any of the following reasons:

  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 because of 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 COVID-19 quarantine or isolation order, or whose health care provider advised the individual to self-quarantine;
  5. The employee 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
  6. The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

How Much Paid Leave is Required?

Employees are entitled to the following:

  • Full-time employees: 80 hours at their regular rate of pay (or 2/3 the employee’s regular rate for qualifying reasons 4, 5, or 6 above).
  • Part-time employees: The number of hours that the employee works, on average, over a 2-week period, at their regular rate of pay (or 2/3 the employee’s regular rate for qualifying reasons 4, 5, or 6 above).

Cap on Paid Sick Leave Wages:

Paid sick leave wages are limited to $511 per day (up to $5,110 total) where leave is taken for reasons 1, 2, or 3 above (generally, for an employee’s own mandated or advised quarantine), and up to $200 per day ($2,000 total) where leave is taken for reasons 4, 5, or 6 above (generally, to care for others or school closures).

Carryover and Interaction with Other Paid Leave:

Any paid leave provided by an employer prior to the law becoming effective cannot be credited against the employee’s paid leave entitlement. Moreover, sick leave provided under the law doesn’t carry over after December 31, 2020.

Retaliation:

The law prohibits retaliating against any employee who takes paid leave. The law further provides that the failure to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.

If you have questions about this article, contact a member of Yoder Ainlay Ulmer & Buckingham’s employment law practice group at (574) 533-1171.

Disclaimer: These materials are for informational purposes only and should not be construed as legal advice on any specific facts or circumstances. We recommend you consult a lawyer if you want professional assurance your interpretation of these materials is appropriate to your particular situation.

©  Yoder Ainlay Ulmer & Buckingham, LLP [March 19, 2020]