Federal Government Enacts Emergency Family Leave and Paid Sick Leave Laws in Response to COVID-19 Virus
March 20, 2020
THIS POST HAS BEEN UPDATED TO REFLECT THE FACT THE DEPARTMENT OF LABOR HAS JUST INDICATED THESE LAWS WILL GO INTO EFFECT ON APRIL 1ST RATHER THAN APRIL 2ND AS ORIGINALLY INDICATED.
The Federal Government has finally responded to important employment issues surrounding the COVID-19 Virus. The law goes into effect 4/1/20 and is set to expire at the end of the year.
In sum, the Federal Government is mandating ALL employers with fewer than 500 employees provide 80 hours (2 weeks) paid sick leave to all full-time employees for COVID-19 issues, including school closures. The maximum total payment an employee can receive is either $5,110 or $2,000, depending on the circumstances. This sick leave is in ADDITION to whatever paid sick leave is already provided pursuant to any other applicable law, or company policy! Healthcare workers and first responders are also likely to be excluded from this benefit.
Additionally, the Federal Government is expanding the Family Medical Leave Act (“FMLA”) to ALL employers with fewer than 500 employees to care for a child due to a school closure. Unlike the existing FMLA (which is unpaid), this law allows for 12 weeks of paid leave, capped at $200 per day or $10,000, per employee in total. Though not 100% certain, it is expected regulations will provide that employers with FEWER than 50 employees will be exempt from this requirement so long as providing such leave would “jeopardize the viability of the business.” Additionally, it is expected that healthcare workers and first responders will also be excluded.
The above will be paid for by the Federal Government in the form of tax credits issued on a quarterly basis.
The following laws are effective from 4/1/20 through 12/31/20:
EXPANDED EMERGENCY FMLA
What is Covered:
12 weeks job protected leave is available to all employees whose employer has fewer than 500 employees (previously, the FMLA only applied to employers with 50 or more employees).
Employees need only have worked for 30 days to be eligible (the existing FMLA 12 months and 1250 hour eligibility requirement does not apply to the Emergency FMLA).
It is expected the Secretary of Labor will issue the following exceptions to the law:
- Businesses with under 50 employees are not required to offer this leave if doing so would jeopardize the viability of the business.
- Healthcare workers and first responders may also be excluded.
Leave may be taken for:
The care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.
Mandated Paid Leave:
The first 10 days of leave are unpaid unless the employee elects to use available paid time off (sick, vacation, personal days). The employer CANNOT force the employee to use paid time off for this 10 day period.
After the first 10 days, the employee receives 2/3 of the employees’ regular pay rate for the number of hours the employee would have normally been scheduled to work. Payment is capped at $200 per day or $10,000 per employee in total.
Part time employees are paid based on the average number of hours the employee worked for the previous six months. If an employee has worked less than six months, he should be paid based on the employee’s expected number of work hours.
Employers with 25 or more employees must protect the jobs of employees taking Emergency FMLA (i.e. return them to the same or equivalent position just as the FMLA normally requires).
Employers with fewer than 25 employees do not have to restore these employees if the job no longer exists due to an economic downturn or other circumstances caused by a public health emergency.
If the employer does not retain the employee because of operational/organizational changes, the employer must make reasonable efforts to contact a displaced employee for up to one year after he is displaced if an equivalent position becomes available.
The law includes anti-retaliation provisions in accordance with the FMLA, meaning if employers terminate employees once they take this leave, the employer will be subject to significant penalties. Employers will be required to post notice of this new law, using a form the Secretary of Labor will issue.
EMERGENCY PAID SICK LEAVE
How much paid sick leave must be provided:
80 hours (2 weeks) paid sick leave must be provided to all full time employees by all employers with fewer than 500 employees. Part-time employees are entitled to paid sick time equal to the number of hours that the employee works, on average, over a two-week period.
Based on the wording of the law, it appears that paid leave provided by an employer before the law is effective cannot be credited against the employee’s paid leave entitlement under this federal law. In other words, the 40 hours of Paid Sick Leave mandated for all businesses in NJ is in ADDITION TO this 2 week leave. For those NJ employers that front load paid leave to their employees (providing all 40 hours on January 1), the employees will have access to a total of 120 hours (3 weeks) of MANDATED sick leave.
Which Employees are Eligible:
Employees are eligible for Emergency Paid Sick Leave if they are:
1. Subject to a federal, state or local quarantine or isolation order related to COVID-19;
2. Advised by a health care provider to self-quarantine due to COVID-19 concerns;
3. Experiencing COVID-19 symptoms and seeking medical diagnosis;
4. Caring for an individual subject to a federal, state or local quarantine or isolation order or has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
5. Caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
6. 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.
Employers of health care providers or emergency responders to may elect to exclude employees from emergency paid sick leave.
Employees are paid their full wages up to $511 per day or $5110 total per employee for reasons 1-3 above.
Employees are paid 2/3 of their regular wage up to $200 per day or $2,000 total per employee for reasons 4-6 above.
The law includes an anti-retaliation provision, meaning if employers terminate employees once they take this leave, the employer will be subject to significant penalties.
Employers will be required to post notice of this new law, using a form the Secretary of Labor will issue.
This sick time will NOT carry over to the following year.
An employer may not require an employee to find a replacement for their work shift in order to make use of this benefit.
TAX CREDITS FOR SICK LEAVE AND PAID FAMILY LEAVE
Refundable tax credits will be offered to employers who are required to provide Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave. These tax credits are issued against the employer portion of Social Security taxes. Employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.
Employers are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter in adherence with the Emergency Paid Sick Leave Act. The tax credit is allowed against the tax imposed by section 3111(a) of the Internal Revenue Code (the employer portion of Social Security taxes).
Similarly, employers offering Emergency FMLA and Emergency Paid Sick Leave are entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the Emergency Family and Medical Leave Expansion Act. The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes). If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.