Employer obligations under the “Families First Coronavirus Response Act”

A Primer for Employers on the “Families First Coronavirus Response Act”

Eric J. Netcher

On March 18, 2020, the President signed into law the “Families First Coronavirus Response Act.” What does this emergency law mean for employers and small businesses?

The Act contains two critical changes. One is an expansion of the already existing Family and Medical Leave Act (FMLA). The other is a new paid sick leave obligation. Both the FMLA expansion and the paid sick leave provisions apply only to private employers with fewer than 500 employees and certain public employers. And both permit the Department of Labor to issue regulations to exempt small businesses with less than 50 employees when the mandates would jeopardize the viability of the business. The Act takes effect 15 days after its enactment and would remain in place until the end of 2020.

It is important to understand the differences between the FMLA expansion and the new paid sick leave requirements of the Act. The following is a primer on these important requirements.

1. The Act expands the FMLA for circumstances when an employee is unable to work due to the need to care for a minor child.

The Act expands the FMLA unpaid leave for circumstances when there is a “qualifying need related to a public health emergency.” The Act provides that such a need occurs when the “employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.” The original bill included other qualifying needs which would support leave. But the only basis for expanded unpaid FMLA leave in the final Act is the inability to work or telework because of a need to care for a child.

Under this expansion of the FMLA, the first 10 days of leave is unpaid. Missed work after the tenth day must be paid by the employer at 2/3 the employee’s regular rate of pay. This amount is capped at $200 per day and $10,000 in the aggregate. During the first 10 days, an employee can elect to use any accrued vacation leave, personal leave, or medical leave. The employee must provide the employer with notice of such leave when it is practicable.

Generally, the FMLA has a requirement that an employee be restored to the same or equivalent position after taking FMLA leave. The new Act offers similar job protection. However, the restoration requirement does not apply to an employer with less than 25 employees when the employee’s position no longer exists because of economic conditions or other changes in operating conditions of the employer that affect employment and are caused by the public health emergency. To come within this exemption, the employer must also make reasonable efforts to restore the employee to the same or an equivalent position, and if the efforts fail, the employer must make efforts to contact the employee and reinstate the employee if an equivalent position becomes available within a one-year period.

The new FMLA provisions apply to employees who have been employed for at least 30 calendar days. The normal FMLA requirements that the employee has been employed for a year, worked for at least 1,250 hours, and works in a location where there are 50 employees within a 75-mile radius do not apply.

2. The Act adds a paid sick leave obligation

The Act also adds a paid sick leave obligation. Employers with less than 500 employees must immediately make available 80 hours of paid sick leave for full-time employees that are unable to work or telework for the following reasons:

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 healthcare 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 their son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of the 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.

Paid sick leave is paid at the employee’s regular rate. But it is capped at $511 per day and $5,110 in the aggregate for circumstances 1, 2, and 3; and capped at $200 per day and $2,000 in the aggregate for circumstances 4, 5, and 6. After the first workday that an employee receives paid sick leave, an employer may require the employee to follow reasonable notice procedures in order to continue receiving the paid sick leave.

The entire 80 hours of paid sick leave is available immediately with no accrual rate or period. Unused paid sick leave does not carry over from one year to the next. An employer is not required to pay unused paid sick leave if an employee separates from employment. Paid sick leave is paid by the employer. But the Act contains provisions providing for a tax credit for the leave payments.

The Act also contains a notice requirement. It provides that employers “shall post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Secretary of Labor, of the requirements described in this Act.” We will continue to monitor and will post a sample notice once approved by the Secretary.

Walker, Revels, Greninger, PLLC is committed to assisting local businesses and social service organizations navigate these uncertain times. If you have questions, contact us online at wrgn-law.com or by phone at 407-789-1830.