03.19.2020 Coronavirus Relief Legislation Establishes New Employee Leave Requirements
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Responding to the developing coronavirus/COVID-19 crisis, Congress passed and President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”) on March 18, 2020. The legislation creates expanded employee leave rights, including paid leave, for coping with the coronavirus.
Expanded Family and Medical Leave. FFCRA amends The Family and Medical Leave Act (“FMLA”) to require employers that employ fewer than 500 employees to allow employees who have been employed at least 30 days to take up to 12 weeks of FMLA medical leave due to a “Qualifying Need Related to a Public Health Emergency.” The term “Qualifying Need Related to a Public Health Emergency” means 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 first 10 days of such leave may be unpaid. After the first 10 days of leave, the employer must provide paid leave at the rate calculated based on (i) an amount not less than two-thirds of the employee’s normal rate of pay as determined under 7(e) of the Fair Labor Standards Act and (ii) the number of hours the employee would otherwise normally be scheduled to work. In no event shall such paid leave exceed $200 per day and $10,000 in the aggregate. The cost of the FMLA paid leave may be offset by tax credits described below. It should be noted that the new Paid Sick Days provisions, described below, would apply during the first 10 days of FMLA leave.
When an employee returns to work, the employer must make reasonable efforts to restore the employee to the same or an equivalent job or position he or she would have had but for the leave. However, employers who have less than 25 employees will not have a duty to return the employee to the same position if the employee’s position no longer exists because of economic conditions or other changes in the employer’s operating conditions due to the public health emergency and the employer has made reasonable efforts to restore the employee to an equivalent position and cannot place the employee. In such a circumstance, while the employee does not have to be reinstated, the employer must place the employee on a recall list and make an effort to recall the employee for a period that ends 12 months from the earlier of the date of the public health emergency concludes or 12 weeks after the date that the employee’s leave commences.
FFCRA provides some relief for smaller employers and employers in the health care sector.
The provisions of FFCRA that amend the FMLA are effective no later than 15 days after enactment and expire December 31, 2020.
Paid Sick Days. FFCRA also includes the Emergency Paid Sick Leave Act (“The Sick Leave Act”) that requires employers to provide sick leave for the following uses:
- To self-isolate because the employee has been advised by a health care provider to self- quarantine due to concerns related to COVID-19.
- To quarantine due to employee being subject to a Federal, State or local quarantine or isolation order related to COVID-19.
- To obtain medical diagnosis or care because the employee is experiencing coronavirus symptoms.
- To self-isolate because 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.
To care for an individual who:
- is self-isolating due to being subject to a Federal, State or local quarantine or isolation order related to COVID-19, or
- has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
- to care for a child whose school or place of care has been closed or child-care provider is not available due to COVID-19 precautions.
Full-time employees must be provided 80 hours of such coronavirus-related paid sick time. Part-time employees must be provided the number of sick leave hours that such employee typically works over a two-week period. The cost of paid leave may be offset by tax credits described below. The coronavirus-related paid sick leave is in addition to any sick leave provided under an employer’s existing policies. An employer may not require an employee to use existing paid sick leave before using the new coronavirus paid sick leave.
Employers are required to post a notice of the coronavirus paid sick leave in conspicuous places. The Department of Labor will prepare a model notice.
The Sick Leave Act provides some relief for smaller employers and employers in the health care sector.
The Sick Leave Act is effective no later than 15 days after enactment and expires December 31, 2020.
Tax Credits for Paid Sick and Paid FMLA Leave. FFCRA provides employment tax credits for paid sick days and paid FMLA leave. The credits are allowed against the taxes imposed by Code Section 3111(a) or 3221(a) of the Internal Revenue Code. The credit for qualified sick leave wages is limited to (i) $511 per day and $5,110 in the aggregate for the employee’s isolation or illness; or (ii) $200 per day and $2,000 in the aggregate if the leave is to care for a sick individual or child following a closing of the child’s school. The paid FMLA leave credit is limited to $200 per day and $10,000 in the aggregate. FFCRA also allows for similar refundable credit against self-employment tax.
Despite proposals by President Trump and Secretary Mnuchin, there is no language regarding a payroll tax holiday included in FFCRA.
Williams Mullen is closely monitoring coronavirus developments. Please contact any member of the Williams Mullen Employee Benefits Group or Labor, Employment & Immigration Group if you have any questions.
Please note: This alert contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes. It is not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.