On Wednesday, March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”) into law. As confirmed cases of coronavirus surge from Seattle to New York City, schools are closing for an indefinite period of time, and numerous cities and states have ordered closure of businesses and imposed restrictions on travel and other activities, the FFCRA seeks to provide relief to certain employees whose ability to work or telework is affected for COVID-19-related reasons. Specifically, it requires employers with fewer than 500 employees to provide emergency paid sick leave and expanded FMLA leave to affected employees. The FFCRA, which takes effect on April 2, 2020, also provides a tax credit to assist employers who comply with the paid sick leave and paid FMLA leave mandates. In addition, on March 19, 2020, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued new guidance for employers with 15 or more employees to ensure that their response to COVID-19 in the workplace complies with the ADA. We summarize these new developments and their impact on employers below.
EMERGENCY PAID SICK LEAVE (“PSL”) ACT
Which employers does it apply to? This applies to private (and certain governmental) employers with fewer than 500 employees. The Secretary of Labor is authorized to issue regulations exempting small businesses with fewer than 50 employees if the sick leave mandate “would jeopardize the viability of the business as a going concern.” There has been no word yet on these regulations. By regulation, certain health care workers and emergency responders may also be excluded.
Who is covered? Both full and part-time employees are covered, no matter how long they have been employed.
What is the effective date? This law is effective 15 days after its enactment, or April 2, 2020, and expires at the end of 2020.
What is required? The law requires employers to provide ten days of paid leave at the employee’s regular rate of pay, up to a maximum of $511 per day and an overall total of $5110 per employee, if the employee is unable to work or telework because: (1) the employee is subject to federal, state, or local quarantine or isolation order; (2) a healthcare provider has advised the employee to self-quarantine; or (3) the employee has symptoms of COVID-19 and is seeking diagnosis.
Additionally, the law requires employers to provide paid sick leave at two-thirds the employee’s regular rate, to a maximum of $200 per day and an overall total of $2000 per employee, where an employee is unable to work or telework because: (1) the employee is caring for an individual under quarantine; (2) a child’s school or child care provider is closed due to COVID-19; or (3) some other substantially similar condition as specified by the Secretaries of HHS, Labor and Treasury.
How is the amount of PSL calculated? Full-time employees receive 80 hours of PSL. Part-time employees receive a prorated amount based on the average number of hours they work in a two-week period. PSL is a separate and supplemental grant of sick leave, in addition to what already may be provided under an employer’s policies or state law. Moreover, PSL is available for immediate use, and the employee may choose to use it before any other paid leave. The employer cannot require the employee to use other paid leave before PSL.
What are the notice requirements? The Secretary of Labor will prepare a notice within 7 days of enactment that employers must post in conspicuous places where such notices are typically posted. As many employees are teleworking, it is advisable that such notice also be communicated electronically to employees. Employers may request reasonable notice for continued leave following the first workday for which an employee uses PSL leave.
How will it be enforced? Employers may not discharge, discipline, discriminate or retaliate against employees for taking or requesting leave. Additionally, a failure to provide leave will be subject to the penalties under the FLSA, which may include a fine of not more than $10,000 and/or imprisonment for not more than 6 months.
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
Which employers does it apply to? This section of the law applies to employers with fewer than 500 employees (thus, it applies to small employers who are not otherwise subject to the FMLA because they have fewer than 50 employees). As with the PSL provisions, the Secretary of Labor can issue regulations to exclude certain health care providers and emergency responders, as well as to exempt small businesses with fewer than 50 employees if the FMLA requirement “would jeopardize the viability of the business as a going concern.”
Who is covered? Unlike the existing FMLA, an employee will be eligible if they have been employed for 30 days.
What is the effective date? The FMLA Expansion Act takes effect 15 days after the law is enacted, or April 2, 2020, and expires at the end of 2020.
What is required? This section requires employers to provide paid FMLA leave “if the employee is unable to work (or telework) due to a need for leave to care for [a] son or daughter under 18 years of age … if [his or her] school or place of care has been closed, or the child care provider … is unavailable, due to a public health emergency.” The first 10 days of leave under the provision is unpaid, although the employee may elect to use any paid leave available, including PSL. The employer may not, however, require the substitution of paid leave. After the first 10 days of this FMLA leave, any additional leave under this provision, up to the 12-week entitlement under the FMLA, must be paid at 2/3 of the employee’s regular rate of pay up to a maximum of $200 per day and $10,000 total per employee for the number of hours the employee would normally work. Notably, regular, unpaid FMLA leave remains available if the reason for the leave qualifies under the existing FMLA.
What are the notice requirements? The Secretary of Labor will prepare a notice within 7 days of enactment that employers must post in conspicuous places where such notices are typically posted and should also be electronically transmitted. Where the need for leave is foreseeable, employees must provide as much notice as is practicable.
Is there a right of reinstatement? As under the existing FMLA, job restoration at the end of leave is required. However, employers with fewer than 25 employees are not required to reinstate employees where they can establish that the job no longer exists because of a change in economic conditions, the employer makes reasonable efforts to restore the employee to an equivalent position, and the employer makes reasonable effort to contact the employee if an equivalent position becomes available within one year.
How will it be enforced? The FMLA Expansion Act prohibits retaliation against an employee who either requests or takes expanded FMLA leave. The existing FMLA provides for employer liability and also personal liability on individual managers and supervisors for violations of the FMLA. Accordingly, there is a risk of individual liability under the FMLA Expansion Act. Importantly, the FMLA Expansion Act specifies that an employee cannot sue an employer with fewer than 50 employees for violation of their rights under the Act; however, the employer may be subject to administrative enforcement.
EMPLOYER TAX CREDITS
Employers who are required to provide emergency benefits under the FFCRA are expected to front the cost of these benefits but may apply for tax credits. Specifically, employers are entitled to a payroll tax credit of 100% of the PSL, up to $511 per day for leave taken by an employee for his or her own care and up to $200 per day for leave taken to care for a family member or because of school or child care closure. The Act also provides a payroll tax credit of 100% of the paid FMLA expansion benefits up to $200 per employee per day or $10,000 total per employee.
Additionally, the U.S. Small Business Administration has implemented emergency relief programs for small employers who may be in need of immediate assistance:
New EEOC Guidance for ADA Compliance in Connection with COVID-19 Pandemic
On March 18, 2020, the EEOC issued new guidance addressing what employers can and cannot do under the ADA when responding to issues related to COVID-19 in the workplace. The guidance can be found here:
What Should Employers Do Now?
If you are an employer with fewer than 500 employees, you should:
• Review your current leave and FMLA policies and consult with counsel in the short-term to update your policies to comply with the FFCRA, if necessary;
• For those employers who operate in jurisdictions where paid sick leave is already mandated or who already voluntarily provide paid sick leave to their employees, the paid leave under the FFCRA is in addition to any paid sick leave benefit currently provided to employees. Such employers should not modify other existing paid sick leave policies and should comply with any jurisdiction-specific requirements.
• Develop a communication plan to explain your updated policies and expectations to employees, including posting notices regarding these expanded leave benefits when distributed by the Secretary of Labor in seven days from the date of enactment. In light of the fact that most employees are working remotely, it also is advisable to post the notice on the company intranet and/or email this notice to all employees.
• Review the EEOC’s new ADA guidance on dealing with coronavirus (applies to employers with 15 or more employees) and contact counsel with any questions to ensure potential ADA and FMLA issues are being handled correctly.
Ansa Assuncao, LLP’s legal team will continue to keep you updated on new developments and can advise employers on specific employment and legal issues arising from the coronavirus. Please contact a member of our team for assistance.