New Requirements for Employers Under the Coronavirus Relief Law

On March 18, 2020, President Trump signed H.R. 6201, the Families First Coronavirus Response Act (the Act), which will go into effect no later than 15 days after enactment. There are a number of important emergency relief measures that will directly affect employers with fewer than 500 employees, including (1) emergency mandated federal paid sick leave (in addition to any paid sick leave already mandated on a State or local level), and (2) expanded and paid leave under the Family and Medical Leave Act (FMLA). Businesses will be eligible for a quarterly tax credit for the paid leave pursuant to these new federal mandates.

Employers will be required to post a notice of new entitlements to leave under the Act in conspicuous places. The Department of Labor will make a model notice available within the next week.

Emergency Paid Sick Leave

• Employers with fewer than 500 employees generally must provide paid sick leave to all employees who are unable to work (or telework) due to a need for leave because:
  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in (1) or has been advised as described in (2).
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
  6. 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.

• Full-time employees (regardless of when hired) are entitled to up to 80 hours of paid sick time, up to $511 per day ($5,110 total) for reasons 1-3 above, and up to $200 per day ($2,000 total) for reasons 4-6 above.
• Part-time employees (regardless of when hired) are entitled to the number of hours of paid sick time equal to the average number of hours that the employee works over a two-week period, up to the same monetary limits as full-time employees.
• This federal Emergency Paid Sick Leave is in addition to any State- or City- mandated paid sick leave. Employers are prohibited from requiring employees to use or exhaust any other paid leave (i.e., employer-provided sick leave, vacation, paid time off) before using the Act's Emergency Paid Sick Leave.
• Employers are prohibited from requiring employees to search for or find a replacement employee to cover hours during which the employee is on Emergency Paid Sick Leave.

Paid And Expanded "Coronavirus" Medical Leave

For employers with fewer than 500 employees, the Act expands the FMLA to require these small businesses to provide up to 12 weeks of FMLA leave for the limited circumstances of an employee who is unable to work (or telework) due to a need to care for a son or daughter under 18 years of age if the child's school or place of care has been closed, or the child's child care provider is unavailable due to a public health emergency due to COVID-19. Ten weeks of this leave are required to be partially paid, details of which are set forth below. 

• Employers with fewer than 50 employees (who are not typically covered by FMLA) are covered by this expanded and paid FMLA.
• To be eligible, employees must have been employed by the employer for at least 30 calendar days.
• The first 10 days of the expanded FMLA leave is unpaid, but employees can elect to use their accrued paid time off (including vacation, paid sick leave, or paid time off) benefits to cover the leave; the employer cannot require the employee to use accrued paid time off.
• After 10 days of unpaid leave under the expanded FMLA leave, employers must pay 2/3 of the employee’s regular rate of pay, up to $200 per day for up to 10 weeks (up to $10,000 total over the course of the 10 weeks of paid leave).

Employer Tax Credit

Employers are eligible to receive quarterly payroll tax credits for amounts spent on paid leave under the Act.

Potential Exemptions from the Act

• Employers with fewer than 50 employees are eligible to request good cause waivers from the U.S. Department of Labor if compliance with the Act’s requirements would “jeopardize the viability of the business as a going concern.” Unfortunately, not much detail is provided on this exemption process. Forthcoming regulations will hopefully clarify this process.
• Health care providers and emergency responders may elect to exclude employees from the entitlements of the Act.
• An employer signatory to a multiemployer collective bargaining agreement is entitled to alternate means of fulfilling its obligations under the Act.

In addition to the new federal requirements, employers may soon have obligations to employees related to leave and employment benefits that are mandated on a state and/or local level. For instance, there is draft legislation in the California Assembly to amend the California Family Rights Act. Employers will be required to comply with the most stringent laws applicable in their jurisdiction.

As employers of all sizes adjust to the extraordinary circumstances of the Coronavirus outbreak, Allen Matkins attorneys are available to advise employers on implementing the mandates of the federal Coronavirus Relief Act, as well as adjusting policies and workplaces in compliance with new and existing laws.