This evening, President Trump signed into law the Families First Coronavirus Response Act, which will provide for coronavirus testing at lower or waived costs, unemployment insurance assistance for states, and additional funding for nutritional programs. It also will also provide for emergency paid sick leave and updates to the Family Medical Leave Act, which are the focus of this alert.  

Emergency Paid Sick Leave

Entitled the Emergency Paid Sick Leave Act, the new law requires most employers to provide so-called emergency paid sick time (EPST) to employees related to COVID-19-related purposes, as discussed below.  This new law takes effective 15 days after President Trump signs it and will expire on December 31, 2020.

Which employers are covered?

Covered employers include public and private entities that employ one or more employees, but fewer than 500 employees.  (This exclusion for larger employers appears based upon statistics suggesting most of these larger employers already provide paid sick leave).

Employers subject to certain multi-employer Collective Bargaining Agreements may be exempt from this new law.

What may EPST be used for?

Employers must provide EPST if an employee is unable to work (or telework) for any of the following reasons:

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 (not simply a family member) who is subject to a Federal, State or local quarantine/isolation order or has been advised by a health care provider to self-quarantine;

5) The employee is caring for their son or daughter if the son or daughter’s school or place of care has been closed, or the child care provider of such son or daughter is unavailable due to COVID-19 precautions.; or

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.  However, as to this particular reason, a health care provider or emergency responder may elect to exclude their employee from such leave. 

Who may use EPST and how does it work if an employer already provides paid time off in the form of sick leave, vacation, or PTO?

Any employee (as defined by the Fair Labor Standards Act) is entitled to immediately use EPST for any of these enumerated purposes, regardless of how long the employee has been employed by the employer.

Importantly, employers cannot require the employee to first use other paid leave before employees use the EPST for reasons stated above.  And, employers may not require an employee to find a replacement when they are utilizing this leave.    

How much EPST may an employee use?

The amount of EPST varies depending on whether the employee is a full or part-time employee.  Full-time employees are entitled to 80 hours of EPST.  Part-time employees are entitled to a number of hours equal to the number of hours that such employee works, on average, over a two-week period.

In this regard, unlike under many existing state or municipal level ordinances or existing employer sick leave plans, employees do not accrue EPST over time.  Rather, they are immediately entitled to a certain number of hours of EPST depending on whether they are full-time or part-time employees, with a part-time employee’s entitlement depending on their average number of hours worked.

However, and apparently in tradeoff for this frontloading of EPST, the EPST shall cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for the EPST.  In other words, this apparently contemplates that the employees are immediately entitled to use their entire EPST allotment (depending on their full or part-time status) but they can only use so much as they actually need for the specified reason that necessitated the EPST.

Similar to many existing state/local or employer policies, this law does not require employers to compensate employees upon separation for potentially available EPST that was not used.  However, and in contrast to many existing sick leave plans, EPST shall not carry over form one year to the next.

At what rate is EPST paid?

The compensation rate for EPST depends both upon the employee’s work schedule and the particular EPST purpose, subject to differing caps on the overall amount.

For instance, for EPST related to reasons 1, 2 and 3 (e.g., employee quarantine per order, employee self-quarantine per health care provider or employee suffering symptoms), the pay rate is based upon the employee’s “required compensation” and the number of hours they would otherwise be normally required to work, capped at $511 per day and $5,110 in the aggregate.

For EPST related to reasons 4, 5 and 6 (e.g., employee care for individual subject to a quarantine or self-quarantine order, school/child care closures, or employee experiencing “substantially similar conditions”), the pay rate uses the same other calculations but allows for two-thirds of the resulting amount, with  caps of $200 per day or $2,000 in the aggregate.

“Required compensation” is defined as not less than the greater of the following: (1)the employee’s regular rate of pay (per the FLSA); (2) the minimum wage rate used by the FLSA; or (3) the minimum wage rate in effect for the applicable state or locality in which the employee is employed.

For purposes of determining the compensation rate for employees that work varying schedules otherwise precluding the employer from reasonably determining the number of hours, the law permits an alternative calculation.  Specifically, the employer may use a number equal to the average number of hours the employee was scheduled per day over the six-month period ending on the day the employee uses EPST, including hours for which the employee took leave of any type.  Alternatively, if the employee did not work over such period, the employer may use the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

The Secretary of Labor is directed to issue guidelines within 15 days after the law’s enactment to assist employers with calculating the amounts owed for EPST usage.

This law allows employers or self-employed individuals to seek tax credits related to their provision of EPST

Can employers require a doctor’s note for EPST usage?

It does not appear so.  This law does not specifically authorize employers to request certification for EPST usage, and an earlier draft of the law specifically precluded employers from requesting certification for EPSE usage.

As a practical matter, it may be difficult for employees to obtain medical certification, and many state and local officials are actively dissuading employers from requiring such certification given the impact on an already burdened health care system.

Are there any posting requirements?

Yes.  The Secretary of Labor will be required to develop within seven days of this law’s enactment a model poster explaining EPST.  Employers will be required to post this poster in a conspicuous place where notices are customarily placed.

Are there penalties for non-compliance?

Yes.  Not surprisingly, this law prohibits discrimination or retaliation against any employee who (a) takes EPST; or (b) has filed any complaint or instituted any proceedings related to this law.

Employers who fail to provide EPST shall be deemed to have not paid minimum wages, thus violating the FLSA and subject to its penalties enumerated for such violations.   Similarly, employers who violate the non-discrimination/non-retaliation provisions shall also be deemed in violation of the LFSA and subject to its penalties for such violations. 

Does this law preempt other laws?

No.  The law specifically states it does not diminish an employee’s rights or benefits under any law, collective bargaining agreements, or existing employer policies.

Family Medical Leave Act Amendments Regarding Public Health Emergency Leave

Entitled the Emergency Family and Medical Leave Expansion Act, this bill makes temporary changes (from the effective date of 15 days after President Trump signs it until December 31, 2020, unless extended), to the Family Medical Leave Act (FMLA) related to the provision of Public Health Emergency Leave (PHEL).  These changes include which employers and employees are covered, the purposes for which PHEL-related leave can be taken, and whether PHEL must be paid.  Each of these are discussed below.

Which employers and employees are covered?

Employers:  While the FMLA generally applies only to employers with 50 or more employees, this expansion for PHEL purposes will apply to any employers with fewer than 500 employees.

In other words, while the FMLA generally excluded smaller employers and applied to all larger employers, PHEL applies to all employers (including the smallest), except for the largest employers.However, the Secretary of Labor would have the authority to exempt small businesses (i.e., with fewer than 50 employees) from the PHEL if such requirements “would jeopardize the viability of the business as a going concern.”

Employees: While the FMLA generally applies to employees who have been employed by the employer for 12 months and worked 1,250 hours in the preceding 12 months, employees need only have been employed by the employer for 30 calendar days to be eligible for PHEL.

The Secretary of Labor would also have the authority to issue regulations excluding certain health care providers and emergency responders from the employees eligible for PHEL.

Employers and employees who are subject to a multi-employer bargaining agreement may be subject to special rules related to this PHEL.

What qualifies as PHEL?

PHEL would be available to employees unable to work (or telework) due to a need to care for the employee’s son or daughter under 18 years of age if their school or place of care has been closed, or their child care provider is unavailable, due to a public health emergency (i.e., with respect to COVID-19 declared by a Federal, State or local authority.  For PHEL purposes, “school” means an elementary or secondary school, and “child care provider” means a provider who receives compensation for providing child care services on a regular basis.

An earlier version of this law would have provided PHEL for additional COVID-19 purposes, but these were pared down via amendment and may be re-introduced in a separate bill. 

Must this PHEL be paid?

The first ten days of PHEL may be unpaid, although the employee may elect (but cannot be required) to substitute any accrued paid time off (e.g., vacation, personal, medical or sick leave).

The remaining PHEL (i.e., after the tenth day) is to be paid by the employer.  The amount will generally be calculated based upon an amount that is two-thirds of an employee’s regular rate of pay for the number of hours that the employee would normally be otherwise scheduled to work.

As with the EPST discussed above, for those employees whose schedule varies from week to week such that an employer is unable to reasonably determine the number of hours the employee would have worked but for the PHEL leave, the law permits an alternative calculation.  Specifically, the employer may use a number equal to the average number of hours the employee was scheduled per day over the six-month period ending on the day the PHEL begins, including hours for which the employee took leave of any type.  Alternatively, if the employee did not work over such period, the employer may use the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

Regardless of the calculation method used, the amount of PHEL pay will be capped at $200 per day and $10,000 in the aggregate.

This law also allows employers or self-employed individuals to see tax credits related to their provision of emergency paid sick leave.

Must the employee provide notice before using PHEL?

It depends.  The new law states an employee must provide as much notice as practicable where the need for PHEL is foreseeable.  However, the law does not mention any notice requirement where the need for PHEL is unforeseeable, suggesting there is no advance notice requirement.

Must the employer reinstate the employee following the expiration of their PHEL?

Generally, yes.  As with the FMLA generally, the PHEL is job-protected and requires the employer to reinstate the employee to the position they held when the PHEL leave commenced.

However, the new law identifies an exception for employers with fewer than 25 employees if certain conditions are present.  Specifically, such an employer need not reinstate following PHEL if (1) the previously-held position no longer exists due to economic conditions or other changes in the employer’s operation conditions that affect employment and are caused by a public health emergency during the PHEL; (2) the employer makes reasonable efforts to reinstate the employee to an equivalent position (i.e., equivalent pay, benefits, and terms and conditions of employment); and (3) if those reasonable efforts to find an equivalent position are unsuccessful, that the employer makes reasonable efforts during a “contact period” to notify the employee if an equivalent position becomes available.  This “contact period” is defined as a one-year period beginning on the earlier of (1) the date the qualifying need related to a public health emergency concludes; or (2) the date that is twelve weeks after the date on which the employee’s PHEL commences.

Be on the Lookout for Other Changes to Local or State Laws

California legislators announced they are working on an urgency measure requiring employers to provide paid sick leave during a public health crisis.  There is no news yet how such a measure would interact with the bill discussed above. 

Note, California’s Governor recently suspended certain notice requirements of the California Worker Adjustment and Retraining Notification Act (Cal WARN), which can be viewed here. 

Do you have questions about how this update may affect you?  For further information contact:

Emily J. Fox (efox@wilsonturnerkosmo.com)

Michael Kalt (mkalt@wilsonturnerkosmo.com)

Lois M. Kosch (lkosch@wilsonturnerkosmo.com) 

Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant developments in the law as they occur. This should not be considered legal advice.