by: Paul Rogoff
The Senate has voted (90-8) to pass, HR 6201, the coronavirus relief package approved by the House last week. The FFCRA is, among other things, a relief package which contains several provisions affecting employers. President Trump is expected to sign the bill in due haste.
Indications are that the Senate approved the bill as written by the House. Given the draft language of the bill, questions will certainly arise. It should be noted at the outset that the bill only applies to employers with fewer than 500 employees. In combination, the Emergency Family and Medical Leave Expansion Act (Division C of HR 6201) and the Emergency Paid Sick Leave Act (Division E) may require private employers to provide up to 14 total weeks of leave, 12 weeks of which must be paid. There are key differences between the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act and how they may apply to the implementation of emergency paid leave policies and practices. New requirements on private employers will take effect 15 days after final passage and continue through Dec. 31, 2020.
The key employment-related aspects of the FFCRA are as follows:
a)Employees of companies with less than 500 employees have the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act. The FFCRA directs that 10 of these 12 weeks be paid at a rate of not less than two-thirds of the employee’s typical rate of pay. Eligibility is dependent upon the employee having been on the employer’s payroll for 30 days, and emergency FMLA leave can be used for the following reasons: (i) to adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; (ii) to care for a family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; and, (iii) to care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to the coronavirus.
a. The first two weeks of leave may be unpaid; the employee may choose to substitute accrued paid time off or other medical or sick leave during this period, but an employer cannot require an employee to do so. After the first two weeks of unpaid leave, employers must continue paid FMLA leave at a rate of no less than two-thirds of the employee’s usual rate of pay.
b. Similar to typical FMLA leave, COVID-19 leave would be job-protected, and employers would be required to return employees to the same or equivalent positions upon their return to work.
c. The bill outlines an exception for employers with less than 25 employees if the employee’s job no longer exists as a result of the pandemic, and this exception requires employers to reasonably attempt to restore the employee to an equivalent position over a one-year period.
d. The Secretary of Labor is authorized to issue regulations exempting (i) certain health care providers and emergency responders from taking leave under the bill; and (ii) small businesses with fewer than 50 employees from the requirements of the bill if it would jeopardize the viability of the business.
e. This amendment to the FMLA would expire on December 31, 2020.
b) 14 Days of Paid Sick Leave. Employers with less than 500 employees must provide full-time employees with 2 weeks (80 hours) of paid sick leave in these circumstances:
a. The employee must self-isolate because of a COVID-19 diagnosis, or to comply with a recommendation or order to quarantine due to exposure or being symptomatic;
b. The employee must get a medical diagnosis or care if the employee is experiencing symptoms of COVID-19;
c. The employee must care for a family member who is (i) self-isolating due to diagnosis, (ii) experiencing symptoms and needs to get diagnosed or get care, or (iii) quarantining due to exposure or being symptomatic; or
d. The employee must care for a child whose school has closed, or childcare provider is unavailable, due to COVID-19.
- Employers would be required to compensate employees for any paid sick time they take at their regular rates of pay (unless the leave is being used to care for a family member or child, in which case the employee is only entitled to two-thirds of the regular rate of pay). The sick leave is available for immediate use by employees, regardless of length of employment.
- Part-time employees would be entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a 2-week period.
- It is worth noting that in its current form, the bill also directs that employers who already provide paid leave to employees on the day before the bill is enacted must provide this paid leave in addition to any paid leave already provided—and may not change their paid leave policies on or after the date of enactment to avoid compliance.
- Further, employers cannot require employees to utilize other paid leave before using the paid leave provided by this bill.
- Like the amendment to the FMLA, this aspect of the bill would also expire on December 31, 2020.
c) Tax credits for paid FMLA and sick leave and grant of $1B for emergency unemployment insurance. The FFCRA provides for a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA. The credits would be as follows:
a. Refundable credit equal to 100% of qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act paid by an employer each quarter.
i. Allowed against the tax imposed by §3111(a) of the Internal Revenue Code. The amount of qualified family leave wages taken into account for each employee is capped at $200 per day, and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability under §3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.
b. Refundable credit equal to 100% of qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act that are paid by an employer each quarter.
i. Allowed against the tax imposed by §3111(a) of the Internal Revenue Code.
c. Lastly, the bill provides $1 billion in grants to states for emergency unemployment insurance, half of which would be transferred to the states within 60 days after the enactment of the bill (as the state complies with certain requirements, such as requiring employers to notify employees of the availability of unemployment compensation and permitting individuals to apply for unemployment compensation in at least two of the following ways—in-person, by phone, or online). The remainder of the grant would be reserved for states in which the number of unemployment compensation claims has increased by at least 10% over the same quarter in the prior calendar year. To receive access to the second portion of the grant, states must, among other things, make it easier for individuals to obtain unemployment compensation by waiving work search requirements and waiting periods. From a practical perspective, much is still up in the air. In its current form, for example, the bill is silent on the question of employees who may have already used some or all of their 12-week FMLA entitlement for other permitted reasons. Will such employees be deemed to have available only what remains of the original 12 weeks of entitlement to use as Emergency FMLA, or will they get a fresh 12 weeks when the new law is enacted? Additionally, §3104, called “Special Rule for Certain Employers,” suggests the exclusion of certain employers covered by the Emergency Family Medical Expansion Act from the enforcement of §107 of the FMLA. This could be of great import to an employer covered by the ambit of this special rule, but the current language which might help identify such employers is murky.