President Trump Signs Families First Coronavirus Response Act: New Requirements for Private Employers With Fewer than 500 Employees and Government Employers

The Emergency Family and Medical Leave Act applies to employers who employ “fewer than 500 employees” (adding coverage for smaller employers of 1 to 49 employees but excluding employers of more than 500 workers).

The Emergency Family and Medical Leave Expansion Act changes the definition of “eligible employee” to apply to anyone employed at least 30 days (rather than 12 months per the regular FMLA rules).

The Emergency Family and Medical Leave Expansion Act defines “qualifying need related to a public health emergency” to mean that the employee is unable to work (or telework) due to a need for leave to care for a son or daughter under 18 if the school or place of care has been closed or the child care provider is unavailable due to COVID-19. If the necessity for leave is foreseeable, an employee shall provide the employer with such notice of leave as is practicable.

The Emergency Family and Medical Leave Expansion Act provides up to 12 weeks of leave and:

• Allows the first 10 days of leave applicable under this expansion to be unpaid.
  • An employee may elect to substitute any accrued paid leave for the unpaid leave provided in this expansion (an employer may NOT require an employee to make this substitution).
• Requires an employer to pay for each day of leave beyond the initial 10 days.
  • The amount of this required pay may not be less than two-thirds of the employee’s regular rate of pay under the FLSA, and
  • The number of hours for this required pay must be in accordance with what would otherwise be normally scheduled for the employee, except that “in no event shall such paid leave exceed $200 per day and $10,000 in the aggregate.”
  • If schedule variations make an employer unable to determine a normal number of hours for an employee, the employer shall:
    • use an average number per day over the prior six months of employment, or
    • use the reasonable expectation of the employee at the time of hiring of the average number of hours per day if the employee has not yet worked for six months.

The Emergency Family and Medical Leave Expansion Act:

• Does NOT require employers with fewer than 25 employees to return an employee to their same position of employment after taking leave if:
  • the position no longer exists due to economic conditions or operational changes caused by the COVID-19 emergency,
  • the employer makes reasonable efforts to restore the employee to an equivalent position (benefits, pay, and other terms), and
  • the employer makes reasonable efforts to contact the employee if such equivalent positions become available within one year from the earlier of the date when the qualifying need concludes or 12 weeks after the date on which the employee’s leave commences.

The Emergency Family and Medical Leave Expansion Act exempts employers that do NOT satisfy the traditional definition provided by the FMLA (50 or more employees working each day in 20 or more calendar weeks in the current or preceding calendar year) but who are otherwise impacted by the new legislation from civil actions brought by employees for a violation of the Emergency Family and Medical Leave Expansion Act.

The Emergency Family and Medical Leave Expansion Act allows employers of health care providers and/or emergency responders to elect to exclude such employees from the application of the emergency changes affecting the definitional changes of employer and eligible employee, the “qualifying need related to a public health emergency” provision, and the paid/unpaid leave provisions.

The Emergency Family and Medical Leave Expansion Act also provides the Secretary of Labor with authority to issue regulations for good cause that may:

• Exclude certain health care providers and emergency responders from the definition of eligible employee; and
• Exempt small businesses with fewer than 50 employees from requirements of the Emergency Family and Medical Leave Expansion Act when such imposition would jeopardize the viability of the business as a going concern.

• a private entity or individual who employs fewer than 500 employees;
• a public agency or entity that employs one or more employees;
• an entity employing a state employee;
• an employing office;
• an executive agency; or
• any successor in interest of an employer.

The Emergency Paid Sick Leave Act requires an employer to provide paid sick time to each employee employed by the employer to the extent the employee is unable to 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 seeking a medical diagnosis;
• The employee is caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
• The employee is caring for a son or daughter 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; or
• 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.
• An exception exists for the employers of health care providers and/or emergency responders, as such employers may elect to exclude such employees from the above requirements.

For qualifying employees, the Emergency Paid Sick Leave Act entitles employees to paid sick time, as follows, and under the following conditions:

• Full-time employees – 80 hours;
• Part-time employees – a number of hours equal to the number of hours the employee works, on average, over a two-week period (use same six-month period or estimate if not applicable as stated in the Emergency Family and Medical Leave Expansion Act);
• An employee’s required compensation shall be not less than the greater of:
  • the employee’s regular rate of pay,
  • the federal minimum wage rate, or
  • the minimum wage rate in affect in the applicable state or locality.
• If such paid sick time is provided due to leave for care of an individual under quarantine, care of a child, or because employee is experiencing a substantially similar condition (rather than a government quarantine or isolation order, a health care provider order to self-quarantine, or because the employee is experiencing COVID-19 symptoms and seeking a medical diagnosis of the same, see above), then the employee’s required compensation shall be two-thirds of the required amount calculated here.
• In no event shall such paid sick time exceed $511 per day and $5,110 in the aggregate for leave because of these specific reasons: (1) a government quarantine or isolation order, (2) a health care provider order to self-quarantine, or (3) the employee is experiencing COVID-19 symptoms and seeking a medical diagnosis of the same.
• In no event shall such paid sick time exceed $200 per day and $2,000 in the aggregate for leave because of these specified reasons: (4) to care for an  individual under quarantine, (5) to care for a child, or (6) because employee is experiencing a substantially similar condition as set forth by the Secretary of HHS.

The following conditions of paid emergency leave also apply:

• Paid sick time under this section shall not carry over from one year to the next.
• Paid sick time under the Emergency Paid Sick Leave Act shall cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for paid sick leave time.
• Paid sick time under the Emergency Paid Sick Leave Act shall be available to employees in addition to any paid leave policies already in effect.
• Employers may not require employees to find replacement workers to cover hours.
• Paid sick time is available for immediate use by employees regardless of how long the employee has been employed by the employer.
• Employees may use the paid sick time provided under the Emergency Paid Sick Leave Act first (before any other accrued leave) and employers may NOT require the use of other paid leave first.
• Employers must post notice of these requirements.
• It is unlawful to discharge, discipline, or discriminate against an employee for using such leave or complaining / participating in a complaint.
• After the first workday or portion thereof that an employee receives paid sick time under this provision, employers may require the employee to follow reasonable notice procedures to continue receiving such paid sick time.

In addition, the new legislation provides the Secretary of Labor with authority to issue regulations for good cause that may:

• Exclude certain health care providers and emergency responders from the definition of employee or allow employers of such employees the right to opt out;
• Exempt small businesses with fewer than 50 employees from requirements of the Emergency Paid Sick Leave Act relating to employee leave for the care of a son or daughter (see above) when such imposition would jeopardize the viability of the business as a going concern; and
• As necessary, to carry out the purposes of the Emergency Paid Sick Leave Act, including ensuring consistency between it and the Emergency Family and Medical Leave Expansion Act.

III.    Tax Credits for Paid Sick and Paid Family and Medical Leave
In another section of the new legislation employers are extended certain tax credits:

• A tax credit is available to employers in an amount equal to 100 percent of the qualified sick leave wages paid by such employer for a given calendar quarter.
• Such credits are subject to certain limitations and refundability:
  • including a cap on the amount of qualified sick leave wages with respect to any individual per day (or portion thereof) that matches the maximum amount provided for under the Emergency Paid Sick Leave Act,
  • a cap on the aggregate number of days taken into account for any calendar quarter, and
  • which is subject to other special rules.
• Additional tax credits for qualified sick leave may apply in specific circumstances, including for certain self-employed individuals;
• This credit does NOT apply to the Government of the United States, state governments or their political subdivisions, or any agency or instrumentality of any of the foregoing;
• The Secretary of the Treasury is directed to prescribe regulations and/or guidance as may be necessary to carry out the purpose of this section.

In this same section of the new legislation some employers are extended additional tax credits:

• A tax credit is likewise allowed for employers in an amount equal to 100 percent of the qualified family leave wages paid by such employer for a given calendar quarter.
• Such credits also are subject to certain limitations and refundability:
  • including a cap on the amount of qualified family leave wages with respect to any individual per day (or portion thereof) that matches the maximum amount provided for under the Emergency Family and Medical Leave Expansion Act,
  • a cap on the aggregate with respect to all calendar quarters that also matches the maximum aggregate amount provided for under the Emergency Family and Medical Leave Expansion Act, and
  • which is subject to other special rules.
• Additional tax credits for qualified family leave may apply in specific circumstances, including for certain self-employed individuals.
• This credit does NOT apply to the Government of the United States, state governments or their political subdivisions, or any agency or instrumentality of any of the foregoing;
• The Secretary of the Treasury is directed to prescribe regulations and/or guidance as may be necessary to carry out the purpose of this section.

Moreover, the new legislation broadly provides that “[a]ny wages required to be paid by reason of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act shall not be considered wages for purposes of section 3111(a) of the Internal Revenue Code of 1986,” which imposes an excise tax on employers.
Finally, the credits allowed for any qualified sick leave wages or qualified family leave wages, referenced above, shall be increased by the amount of the tax imposed by section 3111(b) of the Internal Revenue Code of 1986, subject to the denial of the same double benefit referenced in the statutory schemes for those specific credits.