Families First Coronavirus Response Act Set to Take Effect April 1, 2020
UPDATE: The DOL has provided guidance that the law will take effect on April 1, 2020 – not April 2nd as originally anticipated.
Late Wednesday, President Trump signed into law the Families First Coronavirus Response Act (Act) in an effort to provide relief to American workers affected by the COVID-19 pandemic. The new law includes requirements for certain employers to provide emergency paid sick leave, in addition to paid leave under the Family and Medical Leave Act (FMLA). The provisions of the Act will go into effect on April 1, 2020, and will expire on December 31, 2020. We may see additional direction regarding the Act from the US Department of Labor before April 2nd.
Emergency Paid Sick Leave
The Act requires private employers with less than 500 employees to provide full-time employees with 10 days (80 hours) of paid sick leave when the employee cannot work or telework for circumstances related to COVID-19. Part-time employees are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a two-week period. All employees, regardless of length of employment are eligible for the leave.
The sick leave may be used by employees when they cannot work or telework because:
- the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- the employee is caring for an individual subject to quarantine or self-quarantine, as described above;
- the employee is caring for a son or daughter whose school or place of care is closed, or child-care provider is unavailable, due to COVID-19 precautions; or
- the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services.
The Act limits an employer’s requirement of paid leave to $511 per day ($5,110 in the aggregate) where leave is taken for the first three reasons listed above and $200 per day where leave is taken for the last three reasons listed above. Employers must compensate employees for any paid sick time they take at the higher of: (i) their regular rate of pay, (ii) the federal minimum wage, or (iii) the local minimum wage.
The paid sick leave allotment provided for in the Act is in addition to whatever sick leave is already offered by employers, including that offered subject to state or local requirements. The Act includes an anti-retaliation provision and provides that the failure to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.
Emergency Expansion of the Family and Medical Leave Act
In addition, the Act requires private employers with less than 500 employees to provide up to 12 weeks of job-protected paid leave for employees who are unable to work or telework so that they may care for children if schools are closed or their daycare providers are unavailable because of a public health emergency (this is the only reason that this form of leave is permissible). The first ten days of emergency FMLA leave can be unpaid (but would be subject to the emergency paid sick leave requirements outlined above). An employee can opt to substitute accrued vacation, personal, or sick leave during this time, but an employer may not require an employee to do so. The remaining 10 weeks of FMLA leave is required to be paid, generally at two-thirds of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work. The bill limits the amount of required pay for leave to no more than $200 per day and $10,000 in the aggregate.
Employers of employees who are healthcare providers or emergency responders may elect to exclude such employees from eligibility for paid leave, but the Act does not define these terms. The US Department of Labor is empowered to exempt small businesses with fewer than 50 employees in certain circumstances.
The Act includes refundable tax credits for employers that are required to offer emergency FMLA or paid sick leave, in an apparent effort to avoid burdening small employers. Unfortunately, the Act does not address the concerns of small employers who themselves are suffering right now with limited cash flow. While the Act does not impose any obligations on employers with 500 or more employees, there almost certainly will be political and media pressure on such employers to provide paid leave voluntarily – with no provisions for reimbursement from the federal government.
Amy McAndrew, Esquire
Director of Member Legal Services
MidAtlantic Employers’ Association
*This Alert is provided for general informational purposes only and does not constitute legal advice.