Lee Tankle, Associate, Pepper Hamilton
Moses Tincher, Associate, Troutman Sanders
Tracey Diamond, Of Counsel, Pepper Hamilton
Susan Lessack, Partner, Pepper Hamilton
On March 18, President Trump signed into law the Families First Coronavirus Response Act (the Act). The Act addresses many issues related to the nation’s response to COVID-19, including free coronavirus testing, funding to ensure domestic nutrition assistance programs, and additional funding for state unemployment insurance programs. The provisions most relevant to employers are described below.
Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act (EFMLEA) revises the Family and Medical Leave Act (FMLA) to provide up to 12 weeks of partially paid coronavirus-related job-protected family leave to employees of businesses with fewer than 500 employees. Employees may take EFMLEA leave only if the employee is unable to work (or telework) due to a need for leave to care for a minor child if the child’s school or place of care is closed or the child’s childcare provider is unavailable due to COVID-19.
Unlike the current FMLA, to be eligible for EFMLEA, an employee needs only to have been employed for “at least thirty calendar days by the employer with respect to whom leave is requested.” The first 10 days of EFMLEA leave are unpaid (but likely will be covered by the Emergency Paid Sick Leave Act discussed below). After 10 days, the employer must provide paid leave to employees for the balance of their up to 12 total weeks of leave at an amount not less than two-thirds of the employee’s regular rate of pay based on the number of hours the employee normally would be expected to work. However, employers are not required to pay more than “$200 per day and $10,000 in the aggregate.” An employee is required to provide notice of EFMLEA leave as soon as practicable when the need for leave is foreseeable.
The Act permits the Department of Labor to adopt regulations that would (a) exempt employees who are health care providers or emergency responders from the EFMLEA and/or (b) exempt small businesses with fewer than 50 employees from the requirements of the EFMLEA “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” The Act also exempts employers with less than 50 employees from civil liability for lawsuits brought by employees under the FMLA and allows employers to exclude their employees who are health care providers and emergency responders from the Act’s provisions. Though not stated directly in the Act, it appears that employers with fewer than 50 employees could still be subject to actions brought by the Secretary of Labor for failing to meet the EFMLEA requirements.
Like the FMLA, employers must restore employees taking EFMLEA leave to their position, or an equivalent position — however, there is an exemption that employers with fewer than 25 employees may be able to use if the following conditions are met:
- the employee takes EFMLEA leave;
- the position held when leave commenced does not exist because of economic conditions or other changes in operating conditions of the employer that affect employment and are caused by COVID-19;
- the employer makes reasonable efforts to restore the employee to a position that is equivalent to the position the employee held prior to EFMLEA leave; and
- if the reasonable efforts of the employer fail, the employer makes reasonable efforts during the one-year period following the date the employee commenced EFMLEA leave to notify the employee of equivalent positions that become available.
Although the EFMLEA does not address the issue directly, the exemption for employers with fewer than 25 employees implies that larger employers cannot rely on economic conditions or changes in operating conditions to lay off or terminate an employee who has taken EFMLEA leave.
The EFMLEA will take effect on April 1, 2020 and will remain in effect until December 31, 2020.
Emergency Paid Sick Leave Act
The Emergency Paid Sick Leave Act (EPSLA) applies to all current employees working for employers with fewer than 500 employees, regardless of the employee’s tenure. However, employers may deny emergency paid sick leave to their employees who are health care providers and emergency responders. And as with the EFMLEA, the Department of Labor may issue regulations exempting such individuals.
The EPSLA provides up to two weeks of paid leave (80 hours for full-time employees) for any of the following uses (to the extent the employee is unable to work or telework due to the need for leave):
- the employee is subject to a government-ordered 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 COVID-19 symptoms and is seeking medical diagnosis
- the employee is caring for an individual who is subject to a government-ordered quarantine or a health care provider’s recommendation to self-quarantine
- the employee is caring for a child whose school or place of care has been closed due to COVID-19
- 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.”
Employees taking EPSLA leave are entitled to be paid at their regular rate of pay (but no less than the applicable federal, state or local minimum wage) for reasons 1 through 3 above. However, if employees are utilizing leave for reasons 4 through 6 above, they are entitled only to two-thirds of their regular rate of pay. Employers may cap paid sick time at $511 per day per employee ($5,110 in the aggregate) for leave taken due to reasons 1 through 3, and may cap it at $200 per day per employee ($2,000 in the aggregate) for leave taken due to reasons 4 through 6.
Importantly, under the EPSLA, an employer cannot require an employee to use other paid time off provided by the employer before the employee utilizes the additional paid sick leave provided by the EPSLA. Employers will be required to post a notice of the requirements under the EPSLA, which the Secretary of Labor shall make available within seven days after enactment.
Like the EFMLEA, the EPSLA will take effect on April 1, 2020 and will remain in effect until December 31, 2020.
Even with the enactment of the EFMLEA and the EPSLA, the FMLA still applies. If an employee works for an FMLA-covered employer (defined as an employer with 50 or more employees in 20 or more workweeks in the current or preceding calendar year), has worked for that employer for at least 12 months, has at least 1,250 hours of service for the employer during the 12 months preceding the leave, and works at a location where the employer has at least 50 employees within 75 miles, that employee may be eligible to take unpaid FMLA leave to attend to his or her own coronavirus-related illness or the coronavirus-related illness of a spouse, child or parent if complications from coronavirus arise that create a “serious health condition.” Furthermore, employers operating in jurisdictions that have their own paid sick leave and/or family leave acts will need to analyze the interplay between the Act and those laws to ensure that they comply fully with all applicable federal, state and local law.
The Act is unclear with regard to certain provisions, and the Department of Labor is expected to issue additional guidance and/or emergency regulations prior to the April 1 effective date. The requirements of the Act are no doubt daunting for employers, as many businesses throughout the nation have seen a dramatic decline in business and are struggling with whether they will have to make difficult employment decisions. However, the Act provides a refundable tax credit equal to 100 percent of qualified EFMLEA and EPSLA wages paid by an employer for each calendar quarter. The Secretary of the Treasury has commented publicly that support will be made available to employers with cash flow problems so that employers can meet their obligations under the Act.
This is a trying time for all Americans. Feel free to contact any member of the Pepper Hamilton or Troutman Sanders Labor and Employment Practice Groups to discuss your business’s response to COVID-19.