President Signs Emergency Coronavirus (COVID-19) Employment Laws

Posted in Coronavirus, Family Medical Leave Act (FMLA)

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It took a little longer than expected, but the Families First Coronavirus Response Act (the “Act”) is now law. Initially expected to go before the Senate on Monday, the House bill met with much industry resistance. The House then made some “minor technical corrections” (if 75 pages of corrections is minor) on Monday before sending it to the Senate on Tuesday. On Wednesday, March 18, the Senate approved the Act 90-8 (two Senators, one of whom was Sen. Rick Scott, were missing from the vote — self-quarantined due to possible exposure) and the President signed the Act into law a few hours later.

The final Act differs quite a bit from the initial House bill. Below is a summary of the major provisions that apply to employers.

March 20, 2020 Update

On March 20, 2020, the U.S. Treasury Department, IRS, and the U.S. Department of Labor officially announced that small and midsize employers can begin taking advantage of the two new refundable payroll tax credits immediately. This relief would allow these employers to be fully reimbursed, dollar-for-dollar for the cost of providing Coronavirus-related leave to their employees.

The Act becomes effective April 2, 15 days from the date it was signed into law. There are two subsets of the Act:

The Emergency Paid Sick Leave Act; and
The Emergency Family and Medical Leave Expansion Act.

The Emergency Paid Sick Leave Act

Applies to all employers with less than 500 employees. There is an exception for healthcare providers and emergency responders. Employers will be required to post notices of the provisions of this Act.
The provision expires December 31, 2020, and the sick leave does not carry over.
Eligible workers are those who are unable to work due to the coronavirus (COVID-19) (whether they are experiencing symptoms, are advised or ordered by a healthcare professional or government entity to self-quarantine, are caring for an at-risk individual (not limited to a family member) who has the coronavirus, adhering to a requirement or recommendation to quarantine, or caring for a child whose school or childcare is closed due to the coronavirus.
Eligible full-time employees are entitled to up to 80 hours of sick leave at their full regular rate of pay, with a cap of $511/day if the leave is for their own use. They are only entitled to 2/3 of their regular rate of pay, with a cap of $200/day and an aggregate of $2,000, for any other use. Part-time employees will be eligible for proportionate time off based on the average number of hours worked over a two-week period in the prior six (6) months.
Employers who pay employees wages for taking this emergency leave would be eligible for tax credits for 100 percent of the sick leave wages, taken against their social security contributions.

The Emergency Family and Medical Leave Expansion Act

Applies to all employers with less than 500 employees. The Secretary of Labor is authorized to exempt healthcare providers and emergency responders, as well as businesses with less than 50 employees if the requirements would put the business in economic jeopardy. It’s unclear whether the Secretary of Labor will exercise that option, but it is likely that we will know the answer before the effective date on April 2. Employers will be required to post notices of the provisions of this Act.
The provision expires December 31, 2020.
Employees must be employed for 30 days before becoming eligible for this emergency FMLA leave. They would then be entitled to up to 12 weeks of FMLA leave for a covered reason.
The ONLY covered reason is for employees who miss work to care for a child (under 18) whose school or childcare is closed due to coronavirus. This is a significant limitation over the initial bill, which included all of the covered reasons set forth in the Emergency Paid Sick Leave Act. But it could have a significant impact on employers in light of the fact that schools and childcare across the country are expected to be closed for the foreseeable future.
The first 10 days of the leave is unpaid, but an employer can require the employee to use the Emergency Paid Sick Leave and any accrued PTO during that period. After 10 days, the employee is entitled to 2/3 of their regular rate of pay for the remainder of the leave. Pay is capped at $200/day and $10,000 in the aggregate.
Employees who take this leave are entitled to the FMLA’s job restoration protections if the employer has 25 or more employees. Employers with less than 25 employees may be able to not hold the job open, but there will some significant limitations. The employer will have to show the position no longer exists because of the economic downturn, and that the employer has made reasonable attempts to return the person to work for the year following the failure to return the person to work. (I suspect that this will increase litigation over this aspect of the law).
Employers who pay employees out on this emergency leave would be eligible for tax credits for 100 percent of the sick leave wages, taken against their social security contributions.

Expansion of Federal Unemployment Insurance Act

In an additional piece of legislation, the President also signed into law a significant expansion of the federal Unemployment Insurance Act. It authorizes $1 billion to provide benefits to employees who lose their jobs permanently or temporarily due to the coronavirus, even if they would not otherwise be eligible. More details to come on the actual implementation of this spending authorization.

It’s been quite a week thus far. I expect more changes addressing employee issues and employer monetary support and will be back to update you on same.

Henderson Franklin’s Coronavirus (COVID-19 Task Force)

Henderson Franklin is open and operating under the recommended social distance policy with many of our legal team working remotely, effective Wednesday, March 18, 2020, through April 3, 2020, at which time we re-evaluate the situation.

You are likely asking questions about how this crisis impacts your business. Please continue to contact your respective attorney with the same email and phone number that you are accustomed to using. (A link to our attorney directory is here.)

I’m honored to be apart of the firm’s COVID-19 Task Force. We are working diligently to assist clients in this quickly evolving landscape:

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