Covid 19 – Federal Leave Pay
On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act, H.R. 6201 (the “Act”). The Act will become effective no later than April 2, 2020 and will require all employers with less than 500 employees to provide employees with paid leave under various situations. This alert is meant to provide a quick reference for employers regarding the new law. There are a number of issues concerning the application of this new law (such as the relationship to an employer’s current policies and interplay with state and municipal sick and safe leave acts) that could make navigating compliance difficult. Please seek the guidance of employment counsel as necessary.
Paid Family and Medical Leave (“PFML”) and Paid Sick Time (“PST”)
The Act provides for both PFML and PST. Both the PFML and PST provisions apply only to employers with fewer than 500 employees and certain public employers (“Covered Employers”). Both provisions provide that an employer may elect to exclude an employee who is a healthcare provider or an emergency responder.
The Act contains a sunset provision expiring at the end of 2020. Employers will be able to offset the cost of providing the paid leave by claiming a credit against the employer’s portion of FICA Tax for a calendar quarter in an amount equal to the wages paid by employer to employees pursuant to the Act. The credit, however, is subject to certain limitations.
Covered Employers must provide up to 12-weeks of job-protected leave for a “qualifying need related to a public health emergency” to employees who have been on payroll for 30 calendar days.
The qualifying need applies “where the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”
The first 10 days can be unpaid. Employees may substitute vacation, personal, or sick leave during this time, but the employer may not require an employee to do so. The remaining time is required to be paid at 2/3 of the employee’s regular rate. This pay is limited to no more than $200 per day or $10,000 in the aggregate.
The Act excludes civil damages in an employee-initiated lawsuit for employers that do not employ 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.
The PST for Covid-19 contains broader provisions than the PFML. The PSL provisions require that all Covered Employers immediately make available 80 hours of paid sick leave for full time employees and a prorates amount (based on hours worked in a 2-week period) for part time employees. Leave may be used 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.
(3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to an order as described in reason for use (1) or has been advised as described in reason for use (2) (as described above).
(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 childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
(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.
PST payment amount
Covered reasons (1) through (3) above must be paid at the employee’s full regular rate, while covered reasons (4) through (6) above can be paid at the 2/3 of the employee’s regular rate. Payments can be capped as follows at $511 per day and $5,110 in the aggregate for covered reasons (1) through (3), and $200 per day and $2,000 in the aggregate for covered reasons (4) through (6).
Note: An employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses PST under HR 6201.
The Act requires that an employee be restored to the same or equivalent position after leave. The required reinstatement does not apply to an employer with fewer than 25 employees if the employee’s position no longer exists due to economic conditions or other changes in the employer’s operations that affect employment and are caused by the public health crisis during the period of leave.
Failure to Pay
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.
As this situation continues to unfold, DarrowEverett LLP remains dedicated to monitoring and disseminating information crucial to your business. We will keep you informed as things progress.