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INSIGHTS & NEWS

COVID-19 AND NEW FEDERAL LEAVE LAWS

MARCH 30, 2020
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In a short amount of time, COVID-19 has dramatically altered the world in which we live. In addition to changing how and where we work, it is having a substantial impact on the economy and working families. As a result, Congress has enacted sweeping changes to laws affecting employee leave, with additional responses being negotiated at the time of this bulletin. The President signed the Families First Coronavirus Response Act (“Act”) on March 18, 2020. There are two key aspects of the Act regarding leave for employees and paid benefits: (1) the Emergency Family and Medical Leave Expansion Act and (2) the Emergency Paid Sick Leave Act. Both laws apply to private employers with fewer than 500 employees, and go into effect on April 1, 2020.

 

Emergency Family and Medical Leave Expansion Act

 

When Congress passed the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), it expanded the coverage of the Family Medical Leave Act to specifically address COVID-19 and the widespread closure of schools and childcare facilities. The new provisions are temporary and are currently set to expire on December 31, 2020.

 

Eligibility. Any employee who has been employed by their employer for at least 30 calendar days is eligible for up to 12 weeks of leave.1  While standard FMLA leave requires an employee to have been employed for twelve months and to have worked at least 1,250 hours before being eligible, all employers with fewer than 500 employees are subject to this new leave law. However, the law provides that certain health care providers and emergency responders may be excluded from this expansion of benefits. The Secretary of Labor has been authorized to issue regulations to exempt employers with fewer than 50 employees if providing this leave would jeopardize the continued viability of the business as a going concern. We expect that the Secretary of Labor will issue regulations providing guidance on the application of this exemption in early April.

 

The EFMLEA allows employees to take up to 12 weeks of FMLA leave if they are unable to work (or telework) due to the need to care for a child whose school or childcare facility has been closed due to a public health emergency, or whose childcare provider is unavailable due to a public health emergency (“EFML”). EFML is not available to extended family members who are taking care of children. Only the parent or guardian of the child is eligible.

 

Compensation. The first ten days of EFML is unpaid. However, the employee may use accrued vacation, PTO, or other paid leave to receive compensation during the initial ten-day period. The remaining ten weeks of available leave is paid by the employer. The paid leave shall be at two-thirds of the employee’s regular rate of pay for the number of hours the employee would otherwise be scheduled to work. If the employee works variable hours, they are entitled to be paid for the average number of hours worked during the preceding six months. The benefits are subject to daily and aggregate caps of $200 per day or $10,000 for the duration of the leave.

 

Reinstatement. Employees who take EFML are entitled to reinstatement at the end of their leave. Employers with fewer than 25 employees are exempt from this requirement if the position in question has been eliminated due to economic or other changes in the employer’s operating conditions caused by the public health emergency during the period of leave. However, the employer must make reasonable efforts to restore the employee to an equivalent position with equivalent benefits, pay and other terms and conditions of employment. If no such position is available, the employer is required to contact the affected employee if an equivalent position becomes available during the “contact period,” which is defined as the earlier of the one-year period following the date the public health emergency concludes, or the 12-week period after which the qualifying leave commences.

 

Emergency Paid Sick Leave Act

 

Congress also enacted the Emergency Paid Sick Leave Act (“EPSLA”) to assist employees who are impacted by COVID-19. All employers with fewer than 500 employees must provide up to ten days of paid sick leave under this new law. The EPSLA permits full-time employees to take up to 80 hours of paid sick time if they are unable to work (remotely or otherwise) for any of the qualifying conditions below. Eligible part-time employees are entitled to paid sick time equal to the number of hours they work on average over a two-week period.

 

Eligibility. Employees who require leave for the following conditions are eligible for this leave:

1) the employee is subject to government-issued quarantine or isolation order due to COVID-19;

2) the employee has been advised by a health care provider to self-quarantine due to COVID-19;

3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;

4) the employee is caring for someone who is subject to a quarantine or isolation order or advisement;

5) the employee is caring for a son or daughter whose school or daycare has been closed due to COVID-19; or

6) The employee is "experiencing any other substantially similar condition" specified by the Secretaries of the Department of Health and Human Services, Treasury Department and Department of Labor.

 

While currently all employers with less than 500 employees are required to provide this leave, the Secretary of Labor has been authorized to issue regulations to exempt employers with fewer than 50 employees if providing this leave would jeopardize the continued viability of the business as a going concern.

 

Compensation. Sick leave under this law is paid by the employer. Paid sick leave must be paid at the employee's regular rate of pay, or minimum wage, whichever is greater, for leave taken for reasons 1 through 3 above. Employees taking leave for reasons 4 through 6 may be compensated at two-thirds their regular rate of pay, or minimum wage, whichever is greater. However, compensation for sick leave due to conditions 1 through 3 above shall not exceed $511 per day or $5,111 in the aggregate. Sick leave due to conditions 4 through 6 above shall not exceed $200 per day or $2,000 in the aggregate. The leave available under this law does not carry over from one year to the next and is immediately available, regardless of how long the employee has been employed.

Use. Employees may utilize this leave starting on April 1, 2020. An employer may not first require the use of other available leave. Nor may an employer require, as a condition of providing paid sick time under the EPSLA, that the employee involved search for or find a replacement employee to cover the hours during which the employee is using paid sick time.

 

Notice. Employers are required to post in a conspicuous place the notice prepared by the Secretary of Labor. Since most employers in Washington state have directed employees to work from home to the extent possible, it is recommended that employers email a copy of the notice to all employees as well as posting it in the workplace.

 

Tax Credits

 

The Act provides separate tax credits against each quarterly tax payment in an amount equal to 100% of the qualified sick leave wages an employer pays under the EPSLA and 100% of the qualified leave wages an employer pays under the EFMLEA. There are limitations on how the tax credit is used. We recommend that you seek advice from an accounting professional on this aspect of the Act.

 

During this period of change, businesses are advised to proceed with caution and to consult with legal counsel prior to taking any action about which they are uncertain. The employment lawyers at Socius Law Group are here to help you navigate through this period of change. If you would like to schedule a call to discuss these changes or our recommendations for your business, please contact Jeannette Adams Gorman (jgorman@sociuslaw.com) or Jason Bergevin (jbergevin@sociuslaw.com).

 

1 The recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act adds new language to the EFMLEA to address leave entitlement for “rehired employees.” For purposes of the EFMLEA, the term “employed for at least 30 calendar days” now includes an employee who was laid off on or after March 1, 2020, had worked for the employer for not less than 30 of the last 60 calendar days prior to their layoff, and was rehired. This allows rehired employees who meet the criteria to be eligible for EFML without having to “restart the clock” on the 30-day requirement.

This is intended to be a source of general information, not an opinion or legal advice on any specific situation, and does not create an attorney-client relationship with our readers. If you would like more information regarding whether we may assist you in any particular matter, please contact one of our lawyers, using care not to provide us with any confidential information until we have notified you in writing that there are no conflicts of interest and that we have agreed to represent you on the specific matter that is the subject of your inquiry.