FAMILIES FIRST CORONAVIRUS RESPONSE ACT

As expected, yesterday the President signed into law HR 6201: Families First Coronavirus Response Act. HR 6101 is a sweeping piece of legislation that aims to provide a variety of emergency relief measures to businesses and individuals, including paid family and sick leave for employers with FEWER THAN 500 employees.

Here is a link to the new law, which will take effect no later than April 2, 2020 (providing employers with up to a fifteen (15) day period to implement business protocols, policies and procedures to comply with the Act’s requirements) : https://www.congress.gov/bill/116th-congress/house-bill/6201/text. A copy of the Act is also attached to this e-mail.

The new law adds 2 new leave obligations for small and medium-sized employers through December 31, 2020.

First, it amends the FMLA for COVID-19-related leaves as follows:

1. Amends the definition of ‘employee’ to include anyone who has been employed by an employer for at least 30 days.
2. Amends the definition of employer from "50 or more employees" to "fewer than 500 employees."
3. Provides leave for an employee who is unable to work or telework due to a need to care for the employee’s minor child if the child’s school or place of care has been closed or the child care provider is unavailable due to a public health emergency.
4. Provides that the first 10 days of COVID-19-related leave may be unpaid and allows employees to choose to substitute accrued vacation/PTRO or other sick leave during this time period.
5. After the first 10 days 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. The Act limits the amount of required pay for leave to no more than $200 per day and $10,000 in the aggregate.
6. Requires job restoration following any such leave for any employee of an employer with 25 or more employees.

Please note that unlike the usual FMLA eligibility requirements, an employee is eligible upon completion of 30 days of employment to take the emergency paid family leave.

Second, it provides 80 hours of paid sick leave for full-time employees (or pro-rata for part-time employees) if the employee is unable to work or telework as follows:

1. $511 per day and $5,110 in the aggregate if:

(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; or

(3) The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.

1. $200 per day and $2,000 in the aggregate if:

(4) The employee is caring for an individual subject or advised to quarantine or self-isolate

(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.

An employee is immediately eligible for paid sick leave. This new sick leave obligation is IN ADDITION TO any existing sick leave benefits already provided by the employer, and the employer cannot require the employee to first use the employer-provided sick leave benefits.

Discrimination and retaliation for exercising leave rights is prohibited. Failure to provide leave constitutes a failure to pay wages (hence exposure to wages claims). While an employee-friendly law, these new leave requirements make it more expensive for employers to do business. Employers must first pay the employees and then get reimbursed in the form of a tax credit equal to 100% of the leave wages paid by the employer. There are many questions raised by this new law, and we expect the Department of Labor to issue guidance soon. In the meantime, employers must start taking steps for the imminent requirement to comply.