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What employers need to know about the Families First Act

Along with funding for health services and testing and expanded access to food benefits like SNAP and WIC, the sweeping Families First Coronavirus Response Act includes paid family and sick leave entitlements for employees who are out of work due to COVID-19 related reasons. 

NEW: Department of Labor issues official FAQ on Families First Coronavirus Response Act

The paid leave portions of the Act are made up of two different laws: the Emergency Family and Medical Leave Expansion Act of 2020, which grants up to 12 weeks of leave to care for a child (referred to as “emergency family and medical leave”), and the Emergency Paid Sick Leave Act, which grants up to 80 hours of leave for COVID-19 related reasons (referred to as “emergency paid sick leave”).  The highlights of these paid leave portions of the Act can be found here. Below we’ve provided answers to some of the frequently asked questions regarding the new Act:

Question:  When does the Act go into effect?

Answer:  April 2, 2020 (15 days after enactment, which occurred on March 18, 2020).

Question:  Which employers are covered by the Act?

Answer:  Both the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act apply to all private employers with fewer than 500 employees and all public employers with more than 1 employee.  Employers of healthcare providers and/or emergency responders may elect to exclude such employees.

Question:  How is the number of employees calculated?

Answer:  The existing rules for calculating employees under the Family and Medical Leave Act (“FMLA”) apply.  Under FMLA regulations, the employee threshold number includes all employees who have appeared on an employer’s payroll, regardless of whether the employees actually earned any wages.  Therefore, an employer is covered by the Act if it had fewer than 500 employees on the payroll (regardless of hours worked) for 20 or more calendar weeks in either the current or preceding year. 

Question:  What if an employer has 500 or more employees?

Answer:  The Act does not apply to these employers.  These employers should follow their existing sick leave policies.  Some large employers, including Walmart and Darden Restaurants, have announced they will voluntarily provide paid sick leave. 

Question:  Which employees are covered by the Act?

Answer:  The Emergency Paid Sick Leave Act covers all employees of a covered employer (with the caveat that healthcare providers and emergency responders may be excluded).  The Emergency Family and Medical Leave Act covers all employees who have been employed for at least 30 calendar days by the employer (again, with the caveat that healthcare providers and emergency responders may be excluded).

Question:  How much paid leave must employees be granted?

Answer:  It depends.  Eligible employees who work full-time may use up to 80 hours of emergency paid sick leave for qualifying reasons and 10 additional weeks of emergency family and medical leave if they have a child whose school or childcare facility is closed due to COVID-19. 

The amount of paid sick leave an employer must grant to eligible employees who work part-time depends on how many hours the employee works, on average, over a 2-week period.  For example, if the employee typically works 15 hours per week, then the employee can receive up to 30 hours of emergency paid sick leave for qualifying reasons.  All eligible part-time employees must also be granted 10 additional weeks of emergency family and medical leave if they have a child whose school or childcare facility is closed due to COVID-19. 

Question:  Under what circumstances may an employee take emergency paid sick leave or emergency family and medical leave?

Answer:  There are at least two important things to note here.  First, the “qualifying reasons” for which an employee may use emergency paid sick leave vary substantially from the qualifying reason for which an employee may use emergency family and medical leave.  Second, these portions of the Act changed significantly as it progressed through Congress, so it is important to verify that any resources you’re relying upon are up to date and talking about the law as enacted.

Under the final version of the Act signed into law, employees may use up to 2 weeks of emergency paid sick leave when they cannot work (or telework) because:

  • The employee is subject to a Federal, State, or local quarantine/isolation order;
  • The employee has been advised by a health care provider to self-quarantine due to COVID-19-related concerns;
  • The employee is experiencing COVID-19 symptoms and seeking a medical diagnosis;
  • The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2);
  • The employee is caring for a son or daughter because their school or place of care has been closed, or their child care provider is unavailable, due to COVID-19 precautions; or
  • For other substantially similar conditions that may be later specified by the Secretary of Health and Human Services.

Employees may only use the 12 weeks of emergency family and medical leave when they cannot work (or telework) because they need to care for their son or daughter under 18 years of age whose school or place of care has been closed, or whose child care provider is unavailable, due to COVID-19.

Question:  How much is an employee paid when using the 2-week emergency paid sick leave?

Answer:  If an employee uses emergency paid sick leave for reasons 1, 2, or 3 above, then the employer must pay the employee their full earnings, with a cap of $511 per day ($5,110 total).  If the employee uses emergency paid sick leave for reasons 4, 5, or 6, then the employee must be paid in an amount not less than two-thirds of the employee’s earnings, with a cap of $200 per day ($2,000 total).

Question:  How much is an employee paid when using the 12-week emergency family and medical leave?

Answer:  The first 10 days of this leave may be unpaid, but employees may substitute any accrued paid leave, such as vacation time, or the 2 weeks of emergency paid sick leave during this time.  The remainder of leave beyond the 10-day period must be paid by the employer in an amount not less than two-thirds of an employee’s regular earnings, however, employers are not required to pay an employee more than $200 per day ($10,000 total).

Question:  Is an employee entitled to reinstatement after returning from emergency family and medical leave?

Answer:  Typically, yes.  There is one exception written into the Act, and it is only for employers with less than 25 employees.  The exception applies only if, at the time reinstatement is requested, (1) the employee’s job no longer exists, (2) due to economic conditions or changes in operating conditions caused by COVID-19, and (3) the employer makes reasonable efforts to restore the employee to an equivalent position but is unable to do so.  Even if the exception applies, the employer must continue to make reasonable efforts to contact the employee if an equivalent position becomes available for a 1-year period.  The 1-year period starts on the date the employee’s leave ended or 12 weeks after the date the employee’s leave commenced, whichever comes first.

Question:  Who covers the cost of the paid leave?

Answer:  Initially, the employer.  However, the employer can recoup these costs from the federal government by taking tax credits against the employer’s portion of Social Security taxes.  If the amount the employer has spent on leave exceeds its Social Security tax burden, it will qualify for other tax credits.

Question:  Are there any notice requirements under the Act for employers?

Answer:  Yes.  Employers are required to post and keep posted, in visible places on-site where notices to employees are usually posted, a notice of employees’ rights to emergency paid sick leave.  According to the Act, the U.S. Department of Labor will publish a model notice for employers to use on or before March 25, 2020.  Employers are also required to give employees notice at the time of separation of the availability of unemployment benefits.

Question:  Are there any notice requirements under the Act for employees?

Answer:  Yes.  After the first workday that an employee begins receiving emergency paid sick leave benefits, an employer may require the employee to follow reasonable notice procedures in order to continue receiving paid sick time.  As for emergency family and medical leave, the Act requires employees to provide notice to their employer as is practicable when necessity for the leave is foreseeable.

Question:  Can I require my employees to find someone to cover their shift before allowing them to take paid sick leave?

Answer:  No.  The Act specifically prohibits an employer from requiring, as a condition of providing emergency paid sick time, that the employee search for or find a replacement employee to cover their hours.

Question:  Can I require my employees to use their paid time off before they can use the emergency paid sick leave?

Answer:  No.  The Act prohibits an employer from requiring its employees to use other paid leave before the employee uses the emergency paid sick leave.  An employee may elect to do so, however. 

Question: Are there any exemptions to the paid leave requirements for small businesses?

Answer:  Not yet.  But, the Act authorizes the U.S. Department of Labor to issue regulations that could provide hardship exemptions to employers with fewer than 50 employees.  An employer would qualify for the exemption “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”  We will continue to monitor any regulations issued by the DOL, so please continue to check back for updates. 

Question:  How long will these new measures be in effect?

Answer:  The requirements of the Act are set to expire on December 31, 2020.  Any “unused” paid sick leave will not carryover to 2021. 

Question:  If an employee is laid off or furloughed due to COVID-19, are they eligible for unemployment benefits?

Answer:  Most likely.  While states control unemployment benefits, the Act allots extra money to states for unemployment and requires states to “ease” eligibility requirements for unemployment benefits so that an employee who has been furloughed, laid off, or exhausted their paid leave allotment may apply for unemployment benefits. The Act also extends unemployment benefits beyond a state’s normal benefits period for those who become unemployed for a COVID-19 related reason.  You should check with your state’s unemployment division for specifics on how your state is handling this. 

Question:  What if an employer decides to cut hours instead of laying off employees?

Answer:  The Act encourages state unemployment offices to allow employees whose hours have been cut to collect unemployment benefits to offset lost wages.  You should check with your state’s unemployment division for specifics on how your state is handling this. 

Question:  Is Congress considering any additional legislation?

Answer:  Yes.  Both the House and Senate are working on additional legislation to provide additional benefits to business and individuals, including possible business loans, payroll tax cuts, tax credits, expanded unemployment insurance benefits, aid to the airline industry, anti-price gouging measures, and direct payments to individuals.  Stay tuned for updates. 

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