As we anticipate the passage into law of the Families First Coronavirus Response Act (FFCRA), it will entail a significant expansion to the federal Family and Medical Leave Act (FMLA) for Coronavirus-related reasons. Notably, the bill would add “Public Health Emergency Leave” provisions subject to separate rules and requirements.
Unique Coverage for Public Health Emergency Leave
The Public Health Emergency Leave applies to all employers with fewer than 500 employees. This criterion is different from the FMLA’s usual coverage threshold, i.e., a 50-employee minimum.
In light of this aspect of the FFCRA, we anticipate questions will probably arise whether companies with common ownership or management are subject to the Public Health Emergency Leave requirements. The amended FMLA provisions do not specify whether legal principles that determine whether an employer is part of an “enterprise” or operates as a “single integrated employer” with another company are inapplicable to this new factor. Employers should be cautious in attempting to avoid coverage on this basis and would likely have the burden of establishing that these emergency rules do not apply to them. Any public filings or other representations with inconsistent positions in this regard may be used by the Department of Labor to support broader application.
In addition, employers that are signatories to a multi-employer collective bargaining agreements may find some relief from this amendment if they make contributions to a multiemployer fund, plan, or program based on the paid leave entitlements to which employees would otherwise be entitled.
Nonetheless, there is some relief possible for smaller employers and employers in the health care industry. The amended FMLA would, as relates to the new Public Health Emergency Leave, allow the Secretary of Labor to issue good-cause regulations to exclude certain health care providers and emergency responders from eligibility and to exempt small businesses with fewer than 50 employees if the obligations would jeopardize the viability of the business as a going concern. The Secretary of Labor, however, has NOT issued any such regulations, and none are expected until at least when the FFCRA becomes law. So this is something to be aware of going forward. You should also monitor your state’s own actions in this space, as they conceivably could be more stringent than federal law and may not allow any exemptions for small business.
***Employers who otherwise are encompassed by this expanded coverage are not subject to enforcement actions by employees unless they also meet the FMLA’s current definition of a covered employer***
Relaxed Eligibility Requirements for Employees
Ordinarily, employees must work at least 1,250 hours and at least 12 consecutive months to be eligible for FMLA leave. The Public Health Emergency Leave expands coverage to employees who have been employed with that employer for at least 30 days.
In order to qualify for Public Health Emergency Leave in this latest version of the FFCRA, an employee must have a qualifying need related to an emergency declared by a federal, state, or local authority with respect to COVID-19. To establish a qualifying need, the employee must be unable to work (or telework) because he or she needs to care for his or her minor child if the child’s elementary or secondary school or place of care has been closed, or if the child’s regular paid care provider is unavailable, because of an emergency declared by a federal, state, or local authority with respect to the coronavirus. This is interesting and much more restrictive than one would think, and in contrast, the prior version of the FFCRA more broadly defined a “qualifying need” to include, among other things, leave for the employee to self-quarantine or care for a family member with COVID-19 symptoms.
Additionally, employers of health care providers or emergency responders may decline to offer Public Health Emergency Leave to their employees.
No Additional FMLA Time Created by the FFCRA
Though the FFCRA amends the FMLA in several material respects, it does not expressly add additional job-protected leave time. Employees who take Public Health Emergency Leave will be eligible for the same amount of FMLA leave (12 weeks) as employees who take leave for other FMLA-covered reasons. Unlike typical FMLA leave, however, Public Health Emergency Leave also provides paid leave for any eligible leave taken after ten (10) days. Additionally, employers in states like California, with their own state-equivalents of the FMLA, face the potential of leave covered by the amended FMLA that does not exhaust leave under their state’s FMLA equivalent law, unless those state laws also are amended. Maryland’s FMLA analog should be monitored.
Job Protection
As with typical FMLA leave, employers must restore employees to their same or a similar position upon their return from Public Health Emergency Leave. Only smaller employers (25 or fewer employees) are exempt from this job protection requirement, however, if
- the position held by the employee does not exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a coronavirus-related emergency declared by a federal, state, or local authority; the employer makes reasonable efforts to restore the employee to an equivalent position with equivalent benefits, pay, and other terms and conditions of employment; and after those reasonable efforts fail, the employer makes reasonable efforts to contact the employee about an equivalent position, if one becomes available, for one year following the conclusion of the coronavirus-related emergency or the conclusion of the 12-weeks of coronavirus-related leave taken by the employee, whichever is earlier.
Pay Requirements for Public Health Emergency Leave
The amended FMLA does not require employers to pay employees taking Public Health Emergency Leave for the first ten (10) days of leave. Employees may opt to use (substitute) any accrued paid time off, vacation time, sick leave, or other paid leave during this initial period (including sick leave under the Emergency Paid Sick Leave Act below).
After the first ten (10) days of Public Health Emergency Leave, the amended FMLA requires employers to pay employees on such leave at a rate of two-thirds the employees’ regular rate of pay (as determined under the Fair Labor Standards Act) and for the number of hours the employee would normally be scheduled to work. In no event, however, shall the employee’s paid leave exceed $200 per day and $10,000 in the aggregate.
We’re not aware of any Thread employees having variable work schedules, but to the extent anyone does, employers are to average the employee’s hours worked per day over the previous 6 months or, if the employee has not worked during that period of time, the average daily hours the employee would have been reasonably expected to be scheduled to work when hired. Though it is unclear from the statute, it appears an employee may be able to substitute paid leave for lost pay during this portion of Public Health Emergency Leave.
Tax Credit
Recognizing the fiscal impact of the Public Health Emergency Leave, the FFCRA provides a payroll tax credit for covered employers.
FFCRA ENACTS “EMERGENCY PAID SICK LEAVE ACT”
The amended FFCRA, if signed into law as expected, would also enact the Emergency Paid Sick Leave Act (“Sick Leave Act”). The Sick Leave Act requires all employers to provide immediately-available, paid sick leave time to all employees, regardless of how long they have been employed by the employer.
Coverage of Sick Leave Act
Like the amended FMLA, the Sick Leave Act only applies to private employers to the extent they have fewer than 500 employees. Similarly, smaller employers and employers in the health care industry are offered a break. The Secretary of Labor is authorized to issue good-cause regulations to exempt from coverage certain health care providers and emergency responders, as well as small businesses with fewer than 50 employees (insofar as sick leave is taken to care for a child where the child’s school has been closed or childcare has become unavailable), if the obligations would jeopardize the viability of the business as a going concern. The Secretary of Labor, however, has NOT issued any such regulations, and none are expected until at least when the FFCRA becomes law.
Qualifying Events for Sick Leave
The Sick Leave Act provides leave for a much broader category of reasons arising out of the Coronavirus pandemic, including to self-isolate or seek medical diagnosis or treatment following diagnosis or exhibition of symptoms, to follow health care or public official recommendation or orders, to care for family members who are self-isolating or seeking medical diagnosis or treatment, or to care for children following school closures or unavailability of childcare. While the Sick Leave Act has a wider breadth of coverage than does the Public Health Emergency Leave under the FMLA, it does not have the same job protection requirements. Still, employers should tread carefully in taking adverse action against those on paid leave other than in group terminations or furloughs or other cost-saving measures.
Number of Sick Leave Hours Provided
Full-time employees are entitled to 80 hours of paid sick leave, and part-time employees are entitled to sick leave equivalent to those hours the employee works, on average, over a 2-week period.
Where the employee takes leave for his or her own self-isolation, medical diagnosis, or treatment, the employee is entitled to paid leave at 100% of his or her regular rate of pay. However, where leave is taken to care for a family member or child, employers only are required to provide leave at two-thirds the employee’s regular rate of pay. As amended by the House on March 16, 2020, the current version of the Sick Leave Act imposes a cap on daily and aggregate sick leave pay, dictating that in no event is paid sick leave to exceed $511 per day and $5,110 in the aggregate for an employee’s self-isolation, medical diagnosis, or treatment. Additionally, a cap of $200 per day and $2,000 in the aggregate applies to any sick leave taken by an employee to care for a family member or child.
For those employees paid under atypical or unusual arrangements, employers are instructed to calculate average daily hours worked in the same manner as the amended FMLA. Additionally, employers can expect the Department of Labor to publish guidance within 15 days following enactment of the new law to assist in calculating employee hours and pay.
Notably, these new paid sick leave allotments are in addition to an employer’s existing paid sick leave policies. Additionally, employers are prohibited from requiring that employees use employer-provided vacation time, sick time, or other paid time off before using paid sick leave under the Sick Leave Act.
Tax Credit
Similar to the tax credit afforded to employers for Public Health Emergency Leave, the FFCRA also provides a payroll tax credit for the Sick Leave Act. The Accounting Department should be made aware of this, though the IRS likely will be issuing guidance, as well.
Compliments of Locke Lord