Family’s First Coronavirus Response Act Paid Leave Provisions

Updated: Apr 1


On March 18, 2020, President Trump signed the Family’s First Coronavirus Response Act (Act), which will go into effect on April 1, 2020. The Act, introduced and passed by the House of Representatives and later passed by the Senate provides, in part, paid leave to employees who are out of work due to the effects of the Covid-19 pandemic and the United States’ current health emergency. In two different sections, the Act provides for paid leave for up to 12 weeks.



Emergency Family and Medical Leave Expansion Act (EFMLEA)


The EFMLEA is a temporary amendment to the current Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2612(a)(1) that expires December 31, 2020. Typically, FMLA applies to employers who employ more than 50 employees and provides for 12 weeks of unpaid leave during the course of a year for an employee to care for themselves or family members who are sick or recovering from medical procedures. Under this expansion, employers with less than 500 employees must provide paid leave to their employees for 10 of those 12 weeks to allow employees who can neither work nor tele-work as a result of a school or childcare facility closures caused by the current public health emergency.


To be eligible for the paid leave, employees must have been employed by that company for at least 30 days and be on unpaid leave for 2 weeks (see next provision for how to get paid for the first two weeks). Pay during this 10 week period must be no less than two-thirds of an employee’s regular rate of pay for the number of hours that employee would normally be scheduled to work but shall not exceed $200 per day.


While the expansion requires that employers with less than 500 employees pay for this leave time, the Act gives the Secretary of Labor discretion to exempt businesses employing under 50 people if the imposition of the paid leave requirements would “jeopardize the viability of the business as a [sic] going concern.” Likewise, the Secretary of Labor has the authority to exempt Healthcare providers and their employees from the requirements of this FMLA expansion for "good cause." This section of the Act is silent as to whether public and private companies are treated differently.



Emergency Paid Sick Leave Act (EPSLA)


The EPSLA provides 2 weeks of paid sick leave to employees of private companies with less than 500 employees and public agencies (government agencies) that employ more than 1 employee. Pay for full time employees will be calculated based on an 80 hour two-week pay period. Part time employee pay will be calculated based on the number of hours they average during a two-week pay period.


The need for paid leave is separated into three categories: a) leave to care for self, b) leave to care for others and c) a catchall for unforeseen circumstances.


Need to Care for Self


Employees will receive full pay, maximum of $511.00 per day, based on the hourly calculation above, if the need for leave is for the following reasons:


1) The employee is subject to a Federal, State, or local quarantine or isolation order related to Covid-19;


2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or


3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.


Need to Care for Others


Employees will receive two-thirds pay, maximum of $200.00 per day, based on the hourly calculation above, if the need for leave is for the following reasons:


4) The employee is caring for an individual who is subject to an order as described in subparagraph 1 (federal, state or local quarantine or isolation) or has been advised as described in subparagraph 2 (advised by healthcare provider to self-quarantine); or


5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.


Catchall


Employees will receive two-thirds pay, maximum of $200.00 per day, based on the hourly calculation above, if the need for leave is for the following reasons:


6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.


Employers may not require that an employee use other paid leave before using this paid sick time and also may not require that the employee find coverage for their work during this paid sick leave. However, this section of the Act permits employers who employ health care providers or emergency responders to exempt such employee(s) from paid leave under this section. Similar to the EFMLEA, this section provides a good cause exemption for businesses with less than 50 employees but only if the time off request is due to childcare needs.









Implications for Businesses


With more change and legislation coming, the mechanics and practicality of this relief remains to be determined. Amongst these paid leave provisions, the Act provides for increased funds for unemployment to protect employees who may not qualify under the specific terms above. Additionally, the Act provides for a 100% payroll tax credit for companies subject to the paid leave provisions. While this undoubtedly relieves some of the sudden burden felt by many businesses subject to the Act, the Act does not provide a solution for employers who simply don't have the cash flow to pay employees while their businesses are closed. Fortunately, Treasury Secretary Steve Mnuchin, when asked about how small businesses will afford to pay employees, promised relief stating “Small businesses will be able to use the deposits that they put with the IRS, and if they need a cash advance, they will get it from the IRS.”



For more details please see the text of H.R. 6201 here.



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