Early Saturday morning, March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act designed to provide assistance to American workers in response to COVID-19. The Bill has bipartisan support, passing the House by a vote of 363 – 40. While the Bill deals with a number of necessary public health related matters, the Bill also contains several provisions that will significantly impact U.S. employers.
Importantly, this is only the House version of the Bill. The U.S. Senate is expected to take up the Bill Monday, March 16 and it is possible that the Senate may pass a bill that looks different than the House’s Bill. However, the Senate is expected to pass a bill very close, if not identical, to the Bill. President Trump has expressed his approval of the House Bill and is expected to sign the Bill if passed by the Senate.
If passed by the Senate and signed by the President, the Bill would become effective 15 days after enactment and expire on December 31, 2020. Given the likelihood that this Bill or something strikingly similar will be passed, the time for employers to act is now to start preparing for the Bill’s impact and to ensure policies and procedures align with the provisions set forth below.
The two major provisions of the Bill that impact employers are (1) The Emergency Family and Medical Leave Expansion Act and (2) The Emergency Paid Sick Leave Act. Both are outlined below. Both Acts apply to employers with fewer than 500 employees. It is unclear why the House exempted employers with more than 500 employees from this requirement, but perhaps it is because many large employers already provide such benefits on a voluntary basis or that the House intends to pass additional legislation that covers employers with 500 or more employees at a later date.
The Emergency Family and Medical Leave Expansion Act
If enacted, The Emergency Family and Medical Leave Expansion Act would amend the Family and Medical Leave Act (FMLA) on a temporary basis (through December 31, 2020) and provide certain employees with up to 12 weeks of FMLA-protected leave for reasons related to COVID-19. Specifically, the new Expansion Act would modify the FMLA only with respect to COVID-19-related leave as follows:
Expanded Definition of “Eligible Employee”: Any employee (full or part-time) who has been employed for at least 30 calendar days by the employer. This replaces the typical requirement that the employee must work for an employer for 12 months and have worked 1,250 hours in the 12 months prior to taking leave.
Alternate Definition of “Covered Employer”: An employer with fewer than 500 employees.
Additional Qualifying Reasons for FMLA Leave: As an additional reason to take FMLA leave, an eligible employee can take COVID-19-related FMLA leave for any of the following reasons:
- To comply with a recommendation or order on the basis that the physical presence of the employee on the job would jeopardize the health of others because of (a) the exposure to COVID-19, or (b) the exhibition of symptoms of COVID-19 by the employee and the employee is unable to both perform the functions of his or her position and still comply with the recommendation or order.
- To care for the employee’s family member where the presence of the family member in the community would jeopardize the health of other individuals in the community because of (a) the exposure of such family member to COVID-19 or (b) the exhibition of symptoms of COVID-19 by such family member.
- To care for the employee’s child under 18, if the child’s school or place of care has been closed, or the child’s “child care provider” is unavailable, due to a public health emergency. The term “school” used above only includes elementary and secondary schools – not colleges and universities. Moreover, a “child care provider” must be “a provider who receives compensation for providing child care services on a regular basis,” not simply an unpaid family member who watches the child. If this Bill passes the Senate, this provision of the Bill would have an immediate impact on all many employers in Texas where local schools have been closed in the short term due to COVID-19 concerns.
Expanded Definition of “Parent”: A biological, foster, or adoptive parent; stepparent; parent-in-law; parent of a domestic partner; or legal guardian or other person who stood in loco parentis. The FMLA presently only applies to biological, adoptive, step, or foster parents of an employee or an individual who stands in loco parentis to the employee. As a refresher, for purposes of the FMLA “in loco parentis” refers to the type of relationship in which a person has put themselves in the situation of a parent by assuming and discharging the obligations of a parent to a child. It exists when an individual intends to take on the role of a parent.
New Definition of “Family Member”: A parent of the employee; the spouse of the employee; a child of the employee under the age of 18; an individual who is a pregnant woman, senior citizen, individual with a disability, or has access or functional needs and who is a son or daughter of the employee, a next of kin of the employee for whom the employee is next of kin; or a grandparent or grandchild of the employee.
Paid Leave Requirement: Whether covered employers are required to provide paid FMLA leave to their eligible employees when taking COVID-19-related FMLA leave depends on the length of the leave:
- First 14 Days: The first 14 days of COVID-19-related FMLA leave are unpaid. However, an employee may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for unpaid leave. Employers cannot force employees to use any accrued paid leave for unpaid leave.
- After the Initial 14 Days: After the 14 days of unpaid leave, covered employers must provide paid COVID-19-related FMLA leave at no less than two-thirds the employee’s regular rate of pay for the number of hours the employee would have been normally scheduled. For those employees whose schedules vary from week to week such that employers are unable to determine with certainty the number of hours the employee would have worked, employers must pay those employees based on the average number of hours the employee worked over the prior 6 months, or (if the employee did not work the prior 6 months – such as in the case of new employees), the number of hours the employee was expected to work.
Notice Requirement: In the case of foreseeable COVID-19-related FMLA leave, employees are only required to give enough notice as is practicable.
Restoration to Position: Like traditional FMLA leave, COVID-19-related FMLA leave is job-protected and employees taking COVID-19-related FMLA leave must be restored to their same or equivalent position when they return to work. However, employers with less than 25 employees do not have to restore employees taking COVID-19-related FMLA leave to their same or equivalent position if the employee’s position does not exist after the employee’s leave due to economic conditions or other changes in operating conditions of the employer and are caused by a public health emergency during the period of leave and the employer makes reasonable efforts to restore the employee to an equivalent position and the employer makes efforts to contact any displaced employee for up to a year after they are displaced.
The Emergency Paid Sick Leave Act
If enacted, The Emergency Paid Sick Leave Act would generally require employers with fewer than 500 employees to provide employees with two weeks of paid sick leave to self-isolate/quarantine, seek diagnosis or care for COVID-19, or to care for a child or family member with COVID-19. While The Emergency Paid Sick Leave Act sets forth its own definitions for many of the terms used below, those definitions are generally the same as the terms applicable to The Emergency Family and Medical Leave Expansion Act described above and the Fair Labor Standards Act (FLSA).
Specifically, The Emergency Paid Sick Leave Act would require the following:
Reasons for Sick Leave: An employee may take sick time for any of the following:
- Self-isolation because the employee is diagnosed with COVID-19;
- To obtain a medical diagnosis or care if an employee is experiencing COVID-19 symptoms;
- To comply with a recommendation or order that the physical presence of the employee on the job would jeopardize the health of others because of (a) the exposure of the employee to COVID-19, or (b) the exhibition of symptoms of COVID-19 by the employee;
- To care for or assist an employee’s family member who is self-isolating because the family member has been diagnosed with COVID-19, or is experiencing symptoms of COVID-19 and needs to obtain medical diagnosis or care;
- To care for or assist an employee’s family member if a public official or a health care provider determines that the presence of the family member in the community would jeopardize the health of others due to COVID-19 exposure or the exhibitions of COVID-19 symptoms; and
- To care for the child of such employee if the child’s school or place of care has been closed, or the child care provider of such child is unavailable due to COVID-19.
Duration of Paid Sick Time: Full-time employees are entitled to 80 hours of paid sick time, while part-time employees are entitled to the number of hours that the employee works, on average, over a two-week period. Like with the changes to the FMLA described above, for those employees whose schedules vary from week to week such that employers are unable to determine with certainty the number of hours the employee would have worked, employers must pay those employees based on the average number of hours the employee worked over the prior 6 months, or (if the employee did not work the prior 6 months – such as in the case of new employees), the number of hours the employee was expected to work.
How Paid Sick Leave Is Paid: Employers are required to pay paid sick time at the greater of: (a) the employee’s regular rate or (b) the applicable minimum wage. However, when employees are using paid sick time to care for their family members, they are only entitled to two-thirds of this amount.
Immediate Availability: Paid sick leave will be available for the employee to use immediately, regardless of how long the employee has been employed.
In Addition to Other Paid Sick Leave: Remarkably, the Bill expressly states that if an employer already provides paid leave to its employees, it must provide the paid sick leave provided for by The Emergency Paid Sick Leave Act, in addition to its already existing paid leave. Employers are expressly prohibited from changing their existing policies to avoid this additional requirement.
Sequencing: An employee may first use the paid sick leave under The Emergency Paid Sick Leave Act and employers may not require employees to use other paid leave before the employee uses the paid sick time under The Emergency Paid Sick Leave Act.
No Replacement: Employers are not allowed to condition the use of paid sick leave on the employee finding a replacement to “cover” for them.
No Carry-Over: Paid sick leave hours cannot be carried over after December 31, 2020.
No Retaliation: The Bill contains anti-retaliation protections for employees who (a) utilize paid sick leave under The Emergency Paid Sick Leave Act or (b) file a complaint alleging violations of The Emergency Paid Sick Leave Act. Any employers found to have retaliated against any employee will be considered to have violated the FLSA. Successful plaintiffs would be entitled to the same damages as provided by the FLSA (attorneys’ fees, damage multipliers, etc.).
Penalties for Violation: Any employer who fails to provide their employees with paid sick time as outlined above will be considered to have failed to pay minimum wages in violation of the FLSA. Successful plaintiffs would be entitled to the same damages as provided by the FLSA.
Notice: The Bill further requires employers to notify their employees of their rights under The Emergency Paid Sick Leave Act by posting a notice in a conspicuous location. The Secretary of Labor has been directed to make available a compliant notice within 7 days of enactment of the Bill.
All of the above is daunting (and potentially expensive) for employers, but especially for small-to-medium size employers. The Bill provides for refundable tax credits to be paid to employers to cover the costs associated with The Emergency Family and Medical Leave Expansion Act and The Emergency Paid Sick Leave Act. More information about those tax credits will be available once the final laws take effect.
For questions about preparing your workplace for implementation of these changes, contact The Chapman Firm.