COVID-19 Legal Update

March 24, 2020 

On Wednesday, March 18, the President signed the Families First Coronavirus Response Act (“Act”). It becomes effective on April 2, 2020, and expires December 31, 2020. The Act provides two separate benefits to employees of all employers with 1 to 499 employees.

Potential exemptions are:

·    The Secretary of Labor may exempt employers with less than 50 employees when “the viability of the business as a going concern would be jeopardized” by having to comply.

·    Employers may be allowed to exclude their employees who are health care providers from these benefits. The process for obtaining either of these exemptions is expected through Department of Labor regulations.

Emergency Family and Medical Leave Expansion Act.

FMLA was expanded to add a new category of paid leave for eligible employees to care for a minor child whose school or childcare has closed or is unavailable due to COVID-19 precautions. The remainder of FMLA is unchanged and still applies only to employers with 50 or more employees.

Who is eligible? Employees who have worked at least 30 days for their employer.

Length of Leave. Employees are allowed an additional 10 weeks of leave for a total of 12 weeks. The first 10 days of leave are normally unpaid but the act allows employers to require the employee use any accrued paid leave they have available. In practice, it is likely that a qualifying employee will utilize the two weeks (80 hours) of paid sick leave provided by the Emergency Paid Sick Leave Act during the initial 10 days.

Pay During Leave. Paid leave after the initial 10 days is 2/3 of the employee’s regular rate of pay, not to exceed $200 per day, or $10,000 in aggregate for 10 weeks.

Emergency Paid Sick Leave Act. Any employee, regardless of how long the employee has been employed, is entitled to take paid sick leave if the employee is unable to work or telework due to:

·    The employee is in mandated federal, state, or local quarantine or isolation because of COVID-19;

·    The employee has been advised by a health care provider to self-quarantine due to COVID-19;

·    The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; or

·    The employee is caring for a child whose school or childcare has closed or is unavailable because of COVID-19.

Length of Leave. Full-time employees are entitled to 80 hours of paid sick leave. Part-time employees are entitled to a number of the average hours the employee works over a 2-week period.

Pay During Leave. Paid leave is not to exceed $511 per day, or $5,110 in the aggregate for those who are sick or quarantined and is not to exceed $200 per day, or $2,000 in the aggregate for those who are caring for others.

No Carryover. Paid sick leave under the Act does not carryover from one year to the next.

Leave Terminated. Once the employee returns to work, their entitlement to leave is terminated.

These benefits must be provided in addition to any other paid leave provided by the employer and current paid leave policies cannot be revised after the passage of the law to avoid providing these benefits.

The Act also includes tax credits against an employer’s social security quarterly taxes to be paid. For every dollar of paid leave that an employer pays under the Act in any quarter, the employer can take a credit against the social security taxes paid in that same quarter. If an employer pays more in paid leave than it owes in social security taxes, the employer will receive a refund check from the government.