Congress Passes “Families First Coronavirus Response Act” that Provides Historic Protections for Workers Affected by the COVID-19 Pandemic
On March 18, 2020, President Trump signed into law the “Families First Coronavirus Response Act” (the “Coronavirus Response Act” or the “Act”). The Coronavirus Response Act provides expansive protections to workers in the wake of the COVID-19 pandemic, including paid sick leave for employees who contract COVID-19 or are serving as caregivers for individuals impacted by COVID-19.
How Did We Get Here?
The COVID-19 pandemic spreading throughout the United States has resulted in federal, state, and local governments, as well as private companies and groups, implementing drastic measures to reduce community spread of the virus. As the virus spreads, more employees and their family members are at an increased risk of becoming sick and/or exhibiting COVID-19 symptoms, requiring them to self-isolate, seek medical treatment, and recover from the virus. With the widespread shutdown of schools and, in some states, childcare centers, many otherwise healthy employees have to stay home with young or school-age children.
Given these unprecedented challenges, the Federal Government has temporarily and dramatically expanded paid leave and other protections to employees. This imposes a considerable burden on employers to comply with the mandates and protections afforded to employees under the Coronavirus Response Act.
Employers New Mandated Obligations
The Coronavirus Response Act becomes effective for employers on April 1, 2020. The Act provides for mandatory paid sick leave and dramatically expands the Family and Medical Leave Act (“FMLA”) on a temporary basis. Whereas, FMLA generally applies to employers with 50 or more employees, the Coronavirus Response Act applies to employers with fewer than 500 employees (with some narrow exceptions). Notably, it does not apply to employers with more than 500 employees.
The Act provides for two types of paid leave: 1) Emergency Family and Medical Leave Expansion Act; and 2) Emergency Paid Sick Leave Sick Act.
Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act (“Emergency FMLA”) reduces eligibility requirements for paid leave, such that employees who have worked at a company for at least 30 days may be eligible for the protections under the same. If eligible, employees may take up to 12 weeks of job-protected leave and receive 2/3 of their regular wages, up to a maximum of $200 per day and $10,000 total, for their time off of work only if the employee is unable to work (including remote work) because the employee must care for his/her child who is under 18 years of age and whose school or place of care has closed, or the child care provider is unavailable due to the COVID-19 public health emergency.
Employees eligible for Emergency FMLA will experience an initial 10-day unpaid leave period. Employees may elect to substitute any accrued vacation days, personal leave, or any other available paid leave for unpaid time off. The employee may also use the leave available under the Emergency Paid Sick Leave Act as further explained below. Thereafter, employees are generally eligible for payment of two-thirds of their regular rate of pay, subject to the above caps on compensation per employee. Please note that employers with fewer than 25 employees may be exempt from the reinstatement requirement (i.e., providing job protection during the leave period), in the event certain conditions are met. Such conditions include, without limitation, the necessary elimination of the employee’s position from when the leave commenced due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency during the leave, and upon a sufficient showing of reasonable efforts to restore the employee to an equivalent position.
Emergency Paid Sick Leave Sick Act
Second, the Emergency Paid Sick Leave Act (“EPSLA”) requires employers with fewer than 500 employees to provide paid sick leave for COVID-19 related absences, including:
(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 subject or advised to quarantine or isolation per sections (1)-(3) above;
(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.
For this unprecedented, federal paid sick-leave mandate, eligible employees are entitled to receive up to 80 hours (or two weeks), if working full-time, of paid leave. Such leave that is granted to eligible employees for their own isolation, quarantine, or COVID-19 symptoms, as explained in (1) through (3) above, will be paid at the employee’s regular rate, subject to a maximum of up to $511 per day or $5,110 in the aggregate. Employees who are granted such leave to address an illness substantially similar to COVID-19 or to care for their child or another individual, as explained in (4) through (6) above, will be paid at a rate equal to 2/3 their regular rate, up to a maximum of $200 per day or $2,000 in the aggregate.
This leave is immediately available to employees eligible under the EPSLA and employers may not require employees to first exhaust other paid leave that may be available. Part-time employees are eligible for a number of hours equal to the number of hours the employee works, on average, over a two-week period. To offset this significant burden placed on employers by these new mandated protections, the Coronavirus Response Act also provides for a number of refundable tax credits for companies who are required to provide paid leave related to the COVID-19 pandemic. In addition, the Act provides free coronavirus testing and expanded food assistance.
Where Can You Go From Here
Employers now have less than a week before they have to comply with the Coronavirus Response Act. As a result, employers will face significant challenges in potentially temporarily modifying their existing leave and payroll policies and practices in order to comply with the Act. Employers will also have additional, federally mandated requirements to notify employees regarding their rights under the same.
This is a rapidly evolving situation, and FMJ’s HR & Employment attorneys are here to assist you in this historical crisis. FMJ is available to assist in drafting a policy implementing these temporary modifications that will take precedence over your existing handbook policies. Further, Minnesota employers may need to provide appropriate notice of such changes in order to comply with the Minnesota Wage Theft Act. Employers can avoid potential penalties and other legal liability by involving legal counsel in complying with the Coronavirus Response Act.
We are here to help. Please contact Shannon McDonough, Natolie Hochhausen, or Schaan Barth in the FMJ’s HR & Employment practice group if you have questions about the Coronavirus Response Act. More information about our HR & Employment group is here.
If you have any questions about the above alert or are interested in learning more about how to comply with the new requirements, Shannon McDonough can be reached at firstname.lastname@example.org (head of HR & Employment practice), or reach out to Schaan Barth at email@example.com or Natolie Hochhausen at firstname.lastname@example.org (HR & Employment advising attorney).