New Paid Sick Leave, Family Leave and Tax Credits Effective April 2, 2020

On March 18, President Trump approved several coronavirus emergency measures for employees and employers, portions of the Families First Coronavirus Response Act (Act).

Two sections enhance worker leave (or “furlough”) benefits. The Emergency Paid Sick Leave Act (PSL Act) provides a new nationwide coronavirus paid sick leave. Emergency Family and Medical Leave Expansion Act (EFMLA) amends the Family Medical Leave Act (FMLA) to provide additional paid family leave tailored to coronavirus issues. Both laws:

• Apply to private employers in any industry affecting commerce with 500 or fewer employees while empowering the Secretary of Labor “to exempt small businesses with fewer than 50 employees” if “such requirements would jeopardize the viability of the business as a going concern”;
• Calculate the benefit rate by the “regular hourly rate” formula used for overtime compensation over an employee’s normal work hours or by a six-month average pay rate for those individuals working variable hours;
• Prohibit retaliation against employees who avail themselves of a leave under the Act or who or institute or testify in any proceeding related to the Act;
• Permit employers to exclude health care providers and emergency responders from these rules;
• Have different rules for employers with collective bargaining agreements; and
• Take effect April 2 and expire December 31, 2020.

Emergency Paid Sick Leave Act

The PSL Act provides for 80 hours of paid sick leave for full-time employees and two weeks of average hours worked for part-time employees who cannot work or telework or 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 seeking a medical diagnosis.

“(4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).

“(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.

“(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 the Treasury and the Secretary of Labor.”

The PSL Act provides:

• Employer may not require an employee to use other paid leave before using this federal leave benefit;
• Employer may not require employee to find a replacement;
• Benefit is available regardless of how long (or short) someone has been employed:
• There is no carryover to the next year; and
• Employer must post a notice of these leave rights and rules where employee notices usually posted. The Secretary of Labor is to provide a sample poster by March 25.

For reasons (1), (2) or (3) above, the maximum amount of pay is $511/day and $5,110 total. For reasons (4), (5) or (6) above, the max is two-thirds of the employee’s regular rate or the highest applicable state, federal, or local minimum wage, to a maximum of $200/day and $2,000 total.

An employer’s failure to provide such benefits is a violation of the minimum wage provisions of the Fair Labor Standards Act (FLSA) and may be penalized accordingly.

While the PSL Act lacks California’s required listing of available leave benefits on pay stubs, best practice would be to add an appropriate entry in any event.

Emergency Family and Medical Leave Act

The EFMLA amends the FMLA for the coronavirus emergency.

The first 10 days of coronavirus FMLA leave is unpaid, but an employee may use any paid vacation, sick, medical or personal leave during this time.

While FMLA leave is ordinarily unpaid, the EFMLA requires that coronavirus-related FMLA leave is paid after the 10 work days of leave and up to caps of $200/day and a $10,000 total (daily benefit rate linked to worker’s usual compensation levels). Any remaining qualified leave will be unpaid up to the worker’s return deadline required for reinstatement.

In addition to existing grounds for a FMLA leave, the EFMLA permits leave for an employee to care for a minor child because school or child care has been closed or where a child care provider is unavailable because of a declared COVID-19 public health emergency.

Eligibility only requires 30 calendar days employment prior to the leave. An employee must provide advance notice if the need for the leave is foreseeable.

The EFMLA requires reinstatement to the same or an equivalent position, but not if the company has fewer than 25 employees or the position no longer exists due to intervening economic conditions or other operating changes caused by the public health emergency. If there is no equivalent position, the employer must make reasonable efforts to contact the employee if one becomes available. The restoration obligation is essentially for one year subject to two alternate calculation rules.

Federal Tax Credits for Employers

While the employer benefit obligations may be significant, new tax rules create a 100% wash by employment tax credits up to the leave amounts paid.

See also:

• Telecommuting in Response to Coronavirus Outbreak (March 2020);
• Holding Firm (March 2020)

For more information about these laws or other employment issues related to coronavirus, contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin

Tim Bowles

March 23, 2020

New Paid Sick Leave, Family Leave and Tax Credits Effective April 2, 2020