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COVID-19 Update: FMLA Expansion and Emergency Paid Leave
In an effort to assist employees affected by the COVID-19 coronavirus outbreak, there has been a flurry of new legislation. While the Families First Coronavirus Response Act signed into law on March 18, 2020 includes funding for various benefit programs, this update focuses on amendments to the Family and Medical Leave Act (FMLA) and emergency paid leave. The effective date for the new law is April 2, 2020 and the sunset date for both methods of paid leave is December 31, 2020.
Please note that the two methods of providing paid benefits to employees affected by COVID-19 apply only to private sector employers with less than 500 employees and covered governmental employers. The new law includes provisions that allow some flexibility for the Secretary of Labor to issue guidance and regulations, so employers should continue to monitor this issue closely.
First Method of Paid Benefits: FMLA Expansion
Who is eligible?
For the FMLA expansion, the new law defines an “eligible employee” as someone on an employer’s payroll for 30 calendar days or more. Note that eligibility is much broader than what is typically required for the other types of FMLA leave, which remains unchanged.
To qualify for emergency FMLA leave, an employee must also have “a qualifying need related to a public health emergency.” A qualifying need arises only when an employee can’t work (including telework) because the employee needs to care for a minor child if the child’s school or place of childcare has been closed or is unavailable due to a public health emergency.
What is an eligible employee entitled to?
Those eligible employees will be entitled to 12 weeks of job-protected FMLA leave. Unlike typical FMLA leave, this emergency FMLA leave is paid leave as follows:
- The first 10 days of this FMLA leave is unpaid. Employees must be permitted to substitute any available paid time off, but the employer cannot force an employee to use any available paid time off. Note that the first 10 days may be supplemented with emergency paid sick leave discussed below;
- Once the initial 10-day period has passed, employees are eligible for paid leave at the rate of at least two-thirds of their normal rate of pay, for the number of hours that the employee would otherwise be scheduled to work; and
- Paid leave under the FMLA expansion is capped at $200 per day and $10,000 in the aggregate.
Emergency FMLA leave also includes a reinstatement requirement like traditional FMLA leave. For employers with less than 25 employees, if the position is eliminated because of operational changes resulting from COVID-19 (like a severe downturn), reinstatement isn’t required, subject to the terms of the new law. But if a small business doesn’t reinstate an employee because of the operational change, it is required to make reasonable efforts to contact that employee for one year after they weren’t reinstated if a similar position becomes available.
How will employers pay for emergency FMLA leave?
The new law provides for a series of refundable tax credits for employers providing paid emergency FMLA leave. This includes tax relief for self-employed individuals. Employers should note that these tax credits are only available to those employers covered by the new law (i.e. less than 500 employees for private sector employers and covered governmental entities).
What else do I need to know?
The new law provides for some potential exceptions (depending on Secretary of Labor guidance) as follows:
- Health care providers and emergency responders can exclude those employees from taking emergency FMLA leave;
- Small businesses (defined as employers with less than 50 employees) are exempt if providing employees this emergency FMLA leave would jeopardize their business’ ongoing operations; and
- Small businesses are not subject to civil FMLA damages if an employee files a lawsuit claiming the employer violated this section.
Employers should keep in mind that traditional FMLA benefits may still be available for COVID-19 issues if an employee is suffering from a “serious health condition” or caring for a covered family member.
Second Method of Paid Benefits: Emergency Paid Sick Leave
Who is eligible?
The emergency paid sick leave portion of the bill applies to full and part-time workers with immediate eligibility regardless of time worked (unlike the emergency FMLA leave). An employee is potentially eligible for emergency paid sick leave if the employee is unable to work (or telework) because:
- Of a federal, state, or local quarantine or isolation order related to COVID-19;
- A health care provider advised the employee to self-quarantine because of COVID-19;
- The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- The employee is caring for someone required to quarantine or self-isolate;
- The employee is caring for a child whose school or childcare location has been closed, or whose childcare provider is unavailable because of COVID-19; or
- The employee is experiencing “substantially similar conditions” per the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
What is an eligible employee entitled to?
Once an employee has established he or she can’t work (including telework) because of one of the six reasons just listed, that employee is entitled to:
- If the employee is full-time and can’t work because of their own COVID-19 quarantine or illness, he or she is entitled to 80 hours of paid sick leave at their regular rate of pay;
- If the employee is full-time and can’t work because they are caring for a sick family member, caring for a child because of childcare issues or because of a “substantially similar condition,” he or she is entitled to 80 hours of paid sick leave at two-thirds of their regular rate of pay; and
- If the employee is part-time, he or she is entitled to paid sick leave in the amount equal to the average amount of hours they work over a two-week period.
The total amount paid in emergency sick leave is also capped depending on the reason leave is needed. If the leave is taken because of the employee’s own illness or quarantine, paid leave is limited to $511 per day and $5,110 in the aggregate. If emergency sick leave is taken to care for others or childcare needs, paid leave is limited to $200 per day and $2,000 in the aggregate.
What if an employer already offers paid sick leave?
The new law allows employees to use the emergency sick leave first, then decide whether they will use any remaining paid leave available through their employer’s policy. Employers are not allowed to make the employee use accrued paid sick leave first and existing paid leave can’t be credited against the emergency sick leave requirement. The new law requires that the employer allow the employee to first use sick leave it provides, then decide whether to use any remaining accrued paid leave under an employer’s policy.
How will employers pay for emergency sick leave?
Like emergency FMLA leave, employers that are required to offer emergency sick leave (including self-employed individuals), are entitled to tax credits. Again, these credits are only available to those employers that are required to offer these benefits under the new law.
What else do I need to know?
Like emergency FMLA leave, an employer may exclude employees who are health care providers or emergency responders from this coverage. This portion of the new law also provides the Secretary of Labor the authority to issue regulations to:
- Exclude certain health care providers and emergency responders from the definition of employee by, among other things, allowing them to opt out;
- Exempt small businesses with fewer than 50 employees from these requirements if they jeopardize the viability of a business as a going concern; and
- Ensure consistency between the paid family and paid sick standards and tax credits.
The new law also prohibits employers from retaliating against employees who take emergency sick leave.