In response to the coronavirus pandemic (COVID-19), President Trump signed into law on March 18, 2020 the Families First Coronavirus Response Act, H.R. 6201 (the “Act”). This sweeping Act temporarily expands the federal Family and Medical Leave Act (“FMLA”) relating to COVID-19, creates a temporary federal paid sick leave program relating to COVID-19, expands unemployment insurance benefits, mandates insurance coverage of coronavirus testing, and expands nutrition and food assistance. This Legal Advisory focuses on the Act’s FMLA expansion and the paid sick leave program it creates, and includes the most recent attached guidance issued by the U.S. Department of Labor (“DOL”).
Effective Date and Coverage
The Act’s expanded FMLA leave and paid sick leave provisions are effective on April 1, 2020 and apply to permitted leaves of absence taken between April 1, 2020 and December 31, 2020 related to COVID-19. They are applicable to private employers with fewer than 500 employees (including part-time employees, employees on leave, temporary employees who are employed by a staffing firm or “jointly employed” by the employer and a staffing firm (regardless of whether the jointly- employed employees are maintained on only the employer’s payroll or the staffing firm’s payroll); and day laborers supplied by a staffing firm (regardless of whether the employer is the staffing firm or the client firm if there is a continuing employment relationship)).
If two or more entities meet the “integrated employer test” under the FMLA, the employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded FMLA leave under the Act.
Employers with fewer than 50 employees may seek an exemption from the Secretary of Labor if providing expanded COVID-19 related FMLA leave or paid sick leave would jeopardize the viability of their businesses as a going concern. Employees of health care providers and emergency responders may be excluded from expanded FMLA leave and paid sick leave by their employers or the Secretary of Labor. Employers that are part of a multi-employer collective bargaining agreement are subject to different expanded FMLA leave and paid sick leave rules.
The Act’s expanded FMLA leave and paid sick leave provisions apply only to eligible employees and are not applicable to independent contractors.
Family and Medical Leave Expansion
Eligible employees may take up to 12 weeks of expanded FMLA leave between April 1, 2020 and December 31, 2020 because of a qualifying event with respect to COVID-19. Note that the Act does not provide additional FMLA leave time. If prior to April 1, 2020 an employee has already taken some but not all of the employee’s 12 weeks of FMLA leave in the given 12-month period, he or she may only take as expanded FMLA leave the remaining portion of the 12 week FMLA leave available. Similarly, if an employee takes some but not all of his or her 12 weeks of FMLA leave through expanded FMLA leave, the remainder of the employee’s 12 weeks of FMLA leave can be used for other types of FMLA leave.
- An “eligible employee” with respect to expanded FMLA leave means an employee who has been on the payroll of his or her employer for 30 or more calendar days, without regard to the number of hours worked. 1
- A “qualifying event” means the employee is unable to work (or telework) due to the need for leave to care for such employee’s son or daughter who is under 18 years of age whose school or place of care has been closed due to COVID-19, or whose paid child care provider is unavailable due to COVID-19.
Expanded FMLA leave is not available to an eligible employee if a qualifying event occurs when work is not available to the employee (regardless of whether the work stoppage occurs before or after April 1, 2020, regardless of whether the work stoppage is due to COVID-19 or economic conditions generally, and regardless of whether the work stoppage is due to the closing of the covered employer’s (or its client’s) place of work, or due to the employee being furloughed or terminated. So, a temporary employee is not entitled to receive expanded FMLA leave or paid sick leave under the Act (1) if a qualifying event occurs after his or her assignment ends (assuming no subsequent assignment is available), or (2) for the period of time after his or her assignment ends (assuming no subsequent assignment is available), if a qualifying event occurs during his or her assignment.
Federal Paid Sick Leave
The Act requires covered employers to provide up to 80 hours of paid sick leave to employees who are unable to work (or telework) because the employee:
is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
has been advised by a health care provider to self-quarantine related to COVID-19;
is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
is caring for an individual subject to a quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine related to COVID-19;
is caring for a child whose school or place of care is closed (or paid child care provider is unavailable) for reasons related to COVID-19; or
is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
An employee is not entitled to paid sick leave or expanded FMLA leave merely because a stay-at- home order has been issued to the general public or because the employee voluntarily chooses to self-quarantine to avoid COVID-19 infection. An employee is also not entitled to paid sick leave or expanded FMLA leave because his or her employer reduces or changes the employee’s scheduled work hours.
The 80 hours of paid sick leave is for a full-time employee (i.e., 40 hours per week). A part-time employee receives paid sick leave based on the average number of hours that such employee works over a typical two-week period.
Unlike the 30 day work requirement for expanded FMLA leave, paid sick leave is immediately available.
Covered employers can, but are not required to, permit employees who are teleworking to take expanded FMLA leave or paid sick leave intermittently. If intermittent leave is permitted, it can be in any increments.
An employee working at his or her usual worksite (not teleworking), must take paid sick leave in full-day increments and continue to take paid sick leave each day until he or she has either (a) used the full amount of paid sick leave or (b) no longer has a qualifying reason for taking paid sick leave, if the employee (i) is subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (ii) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (iii) is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (iv) is caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (v) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services. Any remaining paid sick leave may be used at a later time, until December 31, 2020, if another qualifying event occurs.
Covered employers can, but are not required to, permit paid sick leave to be taken intermittently by an employee working at his or her usual worksite if the employee is taking paid sick leave to care for his or her child whose school or place of care is closed, or whose paid child care provider is unavailable, because of COVID-19 related reasons.
Expanded FMLA Leave
Covered employers are not required to pay for the first 10 days of expanded FMLA leave, although an employee may elect (but can not be required) to use paid vacation, paid personal leave, or paid medical or sick leave during that 10 day period. If the expanded FMLA leave exceeds 10 days, the balance of such leave must be paid for at the rate of two-thirds of the employee’s hourly “regular rate” of pay (including overtime and commissions) for the employee’s usual working hours, up to a maximum of $200 per day and $10,000 in the aggregate.
Paid Sick Leave
Paid sick leave taken based on a COVID-19 self-quarantine or isolation order of the employee, or because of the employee’s COVID-19 symptoms, is payable at the employee’s regular rate of pay, up to a maximum of $511 per day and $5,110 in the aggregate.
Paid sick leave taken because the employee is: (1) caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(2) caring for his or her child whose school or place of care is closed, or paid child care provider is unavailable, due to COVID-19 related reasons; or (3) experiencing any other substantially similar condition that may arise, as specified by the Secretary of Health and Human Services, is payable at two-thirds of the employee’s regular rate, up to a maximum of $200 per day and $2,000 in the aggregate.
For employees who work varying hours (including temporary employees), their regular rate is the average of their regular rate over a period of up to six months prior to the date on which they take leave. If they have not worked for six months, the regular rate used to calculate their paid leave is the average of their regular rate of pay for each week they have worked for the employer. Alternatively, the regular rate for each employee can be calculated by adding all compensation that is part of the employee’s regular rate over the above period and dividing that sum by all hours actually worked during that period.
Unused paid sick leave provided under the Act does not carry over from one year to the next and employees are not entitled to be paid for unused sick leave upon the termination of their employment.
Payments under the Act’s expanded FMLA leave and paid sick leave are in addition to any separate federal, state, or local law, applicable collective bargaining agreement, or employer policy.
Notice of Leave and Required Documentation
Employees are required to provide as much notice of the need for leave “as is practicable”.
Covered employers who intend to claim tax credits under the Act for their payment of expanded FMLA leave or paid sick leave wages should require employees to provide a written request and supporting documentation in connection with a request for expanded FMLA leave or paid sick leave under the Act, including: the employee’s name, the qualifying reason for requesting leave, a statement that the employee is unable to work (including telework) for that reason, and the date(s) for which leave is requested.
Documentation of the request for expanded FMLA leave can include notice of closure or unavailability from the employee’s child’s school, place of care, or paid child care provider, including a notice that may have been posted on a government, school, or day care website, published in a newspaper, or emailed to the employee from an employee or official of the school, place of care, or paid child care provider.
- Documentation of the request for paid sick leave can include a copy of the Federal, State or local quarantine or isolation order related to COVID-19 applicable to the employee, or written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19.
Job Restoration and Protection From Retaliation
Employees who take expanded FMLA leave or paid sick leave under the Act generally must be restored to their same positions or equivalent positions (with equivalent pay, benefits, and terms of employment) upon return from expanded FMLA leave or paid sick leave. Covered employers may not fire, discipline, or otherwise discriminate against employees because they have taken expanded FMLA leave or paid sick leave. Nor can covered employers fire, discipline, or otherwise discriminate against employees who file any type of complaint or proceeding relating to the Act, or have or intend to testify in any such proceeding.
Similar to FMLA leave generally, the Act does not prohibit covered employers from taking employment actions for legitimate business reasons, such as layoffs that would have occurred regardless of whether an employee took expanded FMLA leave or paid sick leave.
Covered employers may also refuse to return an employee to work in the same position or a similar position if they have fewer than 25 employees, and the employee took leave to care for his own son or daughter whose school or place of care was closed, or whose paid child care provider was unavailable, and all four of the following hardship conditions exist:
the employee’s position no longer exists due to economic or operating conditions that affect employment and due to COVID-19 related reasons during the period of the employee’s leave;
the employer makes reasonable efforts to restore the employee to the same or an equivalent position;
the employer makes reasonable efforts to contact the employee if an equivalent position becomes available; and
- the employer continues to make reasonable efforts to contact the employee for one year beginning either on the date the leave related to COVID-19 reasons concludes or the date 12 weeks after the employee’s leave began, whichever is earlier.
In addition, covered employers may refuse to return to work a highly compensated “key” employee (as defined in the FMLA).
The Act provides dollar-for-dollar reimbursement through employer payroll tax credits for all qualified expanded FMLA leave and paid sick leave wages paid (up to the wage amounts referred to above). The amount of the credits are increased by the cost of any group health insurance provided to employees taking expanded FMLA leave or paid sick leave. The tax credits will be available from April 1, 2020 to December 31, 2020 and are refundable if they exceed the amount the covered employer owes in payroll tax.
The IRS has indicated in IR-2020-57 that covered employers will be able to retain an amount of payroll taxes equal to the amount of expanded FMLA leave and paid sick leave that they paid, rather than deposit such payroll taxes with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. If there are not sufficient payroll taxes to cover the cost of expanded FMLA leave and sick leave that they paid, employers will be able file a request for an accelerated payment from the IRS.
The IRS has given the following two examples of how this would work:
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit
$8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Employer Notice Requirements
Commencing April 1, 2020, covered employers must post the attached notice in a conspicuous place on their premises. Covered employers may (and should) satisfy the posting requirement by emailing or direct mailing the notice to employees, or posting the notice on an internal or external website. The notice need not be translated into another language. Covered employers are not required to provide the notice to any former employees or job applicants, only to current or newly hired employees.
Covered employers in violation of the Act’s provisions providing for expanded FMLA leave are subject to the enforcement provisions of the FMLA.2 Covered employers in violation of the paid sick leave requirement or unlawful termination provisions of the Act will be subject to the penalties and enforcement described in the Fair Labor Standards Act for failure to pay minimum wages.
The DOL will not bring enforcement actions against any private employer for violations of the Act occurring prior to April 17, 2020 if the employer has made reasonable, good faith efforts to comply with the Act.
Guidance on the Act continues to evolve. We will provide further updates as additional information becomes available.*
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1 The work eligibility requirement for COVID-19 expanded FMLA leave is significantly lower than the FMLA’s work eligibility requirements generally, which require an employee to have worked for an employer for 12 months and 1,250 hours in the preceding 12 months.
2 Note, there is no private right of action under the FMLA against an employer that does not employ 50 or more employees in 20 or more workweeks in the current or preceding calendar year.
* This Legal Advisory is provided for informational purposes only. It does not constitute legal or tax advice. Recipients should consult with their own legal and tax counsel before taking any actions based on the information contained in this Advisory.