COVID-19 & Paid Leave Benefits

March 31, 2020

The events and legislation surrounding COVID-19 and the trickle-down effects are occurring at a pace, unlike anything we have seen in modern times. Congress has been working at breakneck speed to draft legislation aimed at blunting the effects on employees and employers alike. On April 1, 2020, HR 6201, also known as the Families First Corona Virus Response Act (FFCRA) will take effect. Although this legislation contained multiple parts, the two provisions most pertinent to employers and employees are the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. These two provisions generally apply to employers with fewer than 500 employees (including full and part-time employees on the employer’s payroll at the time an employee seeks to take leave). 

The Emergency Paid Sick Leave Act will provide up to 80 hours of paid leave to an employee who cannot work or telework because:

  1. The employee is subject to a quarantine or isolation order related to COVID-19;
  2. The employee is advised by a health care provider to self-isolate for reasons related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and is seeking medical diagnosis;
  4. The employee is caring for an individual (need not be a family member) subject to a quarantine order or advised to self-isolate for reasons related to COVID-19;
  5. The employee is caring for a son or daughter whose school or place of care is closed, or regular child care provider is unavailable, due to COVID-19
  6. Other substantially similar reasons as specified by HHS, the DOL, and the treasury.

Full-time employees (who work 40 hours or more per week) will be entitled to 80 hours of paid leave for the above reasons.  Part-time employees will be entitled to the number of hours that the employee works, on average, over a two-week period of time. The new law also provides methods for calculating the number of hours an employee may receive who works a varying work week. Employees are entitled to this emergency paid leave for one of these reasons starting on their first day of employment. This leave does not displace or replace any other leave the employee might be entitled to under an employer policy or state or local law, and the employee has the option of using this leave benefit in any order with other leave that the employee may have. This emergency leave entitlement does not carry over from year to year, is not payable upon departure from employment and will sunset on December 31, 2020.

If the employee is unable to work or telework for reasons 1, 2, or 3, the employee will receive 100% of their regular rate of pay, capped at $511 per day ($5100 total). If the employee is unable to work or telework for reasons 4, 5, or 6, the employee will receive two-thirds of their regular rate of pay, up to $200 per day ($2000 total).

The other leave component provided under FFCRA is the Emergency Family and Medical Leave Expansion Act. This leave provides up to 12 weeks of leave (partially paid) and is only available to an employee who cannot work or telework because the employee’s child’s school or place of care is closed, or the regular care provider is unavailable, for COVID-19 related reasons.

To be eligible for this emergency FMLA leave, the employee must have been employed with the employer for 30 calendar days before the leave is to begin. The usual eligibility provisions that FMLA employers might be familiar with (1250 hours/12 months/working within 75 miles of another 50 employees) do not apply to this emergency FMLA leave. The usual FMLA rules and eligibility criteria do remain in effect for all other FMLA needs and usual qualifying reasons. 

This emergency FMLA does not provide any additional weeks of leave, but rather provides an expanded qualifying reason for FMLA leave.  For example, if an employee had previously used two weeks of FMLA leave in their leave year to recover from surgery, the employee would only have 10 weeks for FMLA leave remaining, which could be used for this emergency leave purpose. If the employee had previously used all of their FMLA leave in their leave year, they would have no additional FMLA leave available for this emergency FMLA leave reason.

The first 10 days of emergency FMLA leave are unpaid. During this time, the employee may use other paid leave benefits such as PTO, vacation or sick leave to provide income. The employee could also use EPSL (Reason #5, discussed above) to provide income during this ten-day period.  Whether to use any paid leave or which paid leave to use, during these first 10 days of emergency FMLA leave is entirely up to the employee.  After the first ten days leave, the remaining emergency FMLA leave would be paid at two-thirds the employee’s regular rate of pay, for the number of hours the employee would otherwise be scheduled to work, up to a maximum of $200 per day ($10,000 total).

Employers will be able to claim a tax credit for amounts paid under these two new leave provisions on a dollar for dollar basis. The IRS press release explaining the reimbursement process can be found here.

According to the IRS, employers will be reimbursed 100% for paid leave pursuant to the FFCRA, including health insurance costs.  Employers are encouraged to consult their tax professionals for more information on these reimbursements and documentation required.

Over the past week, the Department of Labor has issued several guidance documents to help employers navigate the implementation of these new temporary leave provisions. The Associated Industries Legal Department is offering a series of webinars to help employers keep abreast of these rapid developments and address the many questions that are raised by these provisions.

Register for our COVID-19 & Paid Leave Webinar on April 1 at 10 am! And if you have any questions please contact us!

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