Coronavirus: Congress expected to pass expanded paid leave (United States)

Employment Alert

COVID-19 Alert

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On March 14, 2020, the US House of Representatives passed a comprehensive bill aimed at providing relief to families and businesses in the wake of the coronavirus disease (COVID-19) pandemic. The proposed legislation, titled The Families First Coronavirus Response Act (the Act), is being considered by the Senate this week.  This Alert discusses the paid leave requirements in the current version of the Act.

 

Overview

 

Although it is unclear whether the Senate will make any modifications to the Act (which would require re-approval by the House), as it is currently drafted, the Act requires employers with fewer than 500 employees to provide employees with paid sick leave and paid Family and Medical Leave Act (FMLA) leave for the following COVID-19-related reasons:

 

  • To self-isolate because the employee is diagnosed with COVID-19.
  • To obtain a medical diagnosis or care if such employee is experiencing symptoms of COVID-19.
  • To comply with a recommendation or order by a public official or healthcare provider that the employee stay home from work because the employee (i) was exposed to COVID-19 or (ii) is experiencing symptoms of COVID-19.
  • To care for or assist a “family member” (which is broadly defined, as discussed below) who: (i) has been diagnosed with COVID-19; (ii) is experiencing symptoms of COVID-19 and needs to obtain medical diagnosis or care; or (iii) is quarantined or self-isolating as a result of a public official’s or healthcare provider’s determination that their presence in the community would jeopardize the health and safety of others because (a) of their exposure to COVID-19 or (b) they are experiencing symptoms of COVID-19.
  • To care for the employee’s child if the child’s school or place of care has been closed, or if the child care provider of such child is unavailable, due to COVID-19.

The definition of “family member” under the Act is broader than the current definition under the FMLA.  Specifically, in addition to the employee’s spouse and children (as currently defined by the FMLA), the Act’s definition of “family member” includes:

 

  • An expanded definition of the term “parent,” which includes a (i) biological, foster, or adoptive parent, (ii) stepparent, (iii) parent-in-law, (iv) parent of a domestic partner, and (v) legal guardian or other person who stood in loco parentis to an employee when the employee was a child.
  • An individual who is pregnant, disabled or a senior citizen, and who is a child, next of kin, grandparent or grandchild of the employee. 
  • With regard to COVID-19-related paid sick leave only, the term “child” includes a child of a domestic partner.

Although it is not clear from the language in the Act, we expect that employees who are employed outside the United States will not be counted for purposes of determining employer coverage under the Act (ie, whether the employer has “fewer than 500 employees”), consistent with existing federal regulations for similar statutes.  The paid leave portions of the Act will take effect within 15 days after it is signed into law and expire on December 31, 2020.

 

COVID-19-related paid sick leave

 

The Act requires employers with fewer than 500 employees to provide all employees, regardless of their tenure with the company, with two weeks of paid sick leave for the COVID-19-related reasons listed above.  Specifically, full-time employees are entitled to 80 hours of paid sick leave and part-time employees are entitled to paid sick leave in an amount equal to the number of hours that the employee works, on average, over a 2-week period.  Employees are entitled to paid sick leave (i) at the employee’s regular rate for leave taken as a result of their own need to self-isolate or seek diagnosis or care or (ii) at two-thirds of the employee’s regular rate of pay for leave taken to care for a family member for the same reasons or to care for a child whose school has closed, or whose child care provider is unavailable, due to COVID-19.

 

The Act makes clear that COVID-19-related paid sick leave must be provided to employees in addition to any paid sick leave provided under an employer’s current paid sick leave policies and that employers cannot (i) change their current policies to avoid being subject to the new federal sick leave requirement or (ii) require an employee to find another employee to cover the hours during which the employee is using COVID-19-related paid sick leave.  Employees cannot carry over COVID-19-related paid sick leave and are not entitled to payment for any unused COVID-19-related paid sick leave upon termination of employment.

 

Employers will be required to post a notice informing employees of their right to COVID-19-related paid sick leave under the Act.  The Act requires the Secretary of Labor to (i) make a model notice publicly available not later than 7 days after the date of enactment; and (ii) issue guidelines to assist employers in calculating the amount of paid sick leave not later than 15 days after the date of enactment.

 

COVID-19-related paid family and medical leave

 

The Act also requires employers with fewer than 500 employees to provide employees who have been working for at least 30 calendar days with up to 12 weeks of job-protected FMLA leave for the COVID-19-related reasons listed above.  Notably, unlike standard FMLA leave, employers with fewer than 50 employees will be required to provide COVID-19-related FMLA leave (subject to the possible exemption discussed below) and employees who work at a facility with fewer than 50 employees (or where an employer has fewer than a total of 50 employees within 75 miles of that facility) will be eligible for COVID-19-related FMLA leave under the Act.

 

Under this portion of the Act, the first two weeks of such leave are unpaid (although the employee may be entitled to paid sick leave under the provision previously discussed), and employees are entitled to paid leave in an amount equal to two-thirds of the employee’s regular rate of pay for the remaining 10 weeks. 

 

If an employee’s schedule varies from week to week, the employee’s compensation for paid COVID-19-related FMLA leave will be calculated based on either: (i) the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave (including hours for which the employee took leave of any type); or (ii) if the employee has not been employed for 6 months, 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.

 

Possible exceptions to COVID-19-related FMLA leave requirements:

 

  • The Act authorizes the Secretary of Labor to issue regulations exempting small businesses with fewer than 50 employees from this portion of the Act if the imposition of these requirements would jeopardize the viability of the business as a going concern. 
  • With regard to the job-protected component of COVID-19-related FMLA leave, the Act states that employers with fewer than 25 employees may not be required to return employees to their same or equivalent position upon their return to work from such leave if the employee’s position ceases to exist due to an economic downturn or as a result of other circumstances caused by a public health emergency.  This exception is subject to certain conditions, including that the employer must make reasonable attempts to return the employee to an equivalent position and must contact any displaced employee for up to a year after they are displaced if an equivalent position becomes available.

Employer payroll tax credits for COVID-19-related paid leave

 

To help offset the costs associated with these new paid leave requirements, the Act provides for various employer payroll tax credits, including the following:

 

  • Paid sick leave:  With regard to the two weeks of COVID-19-related paid sick leave, employers may be able to claim a credit of up to: (i) $511 per employee per day for leave taken for an employee’s own need to self-isolate or seek diagnosis or care; and (ii) $200 per employee per day for leave taken by an employee to care for a family member.
  • Paid family and medical leave:  Employers may be able to claim a credit of up to $200 per employee per day for any paid COVID-19-related FMLA leave provided to employees.  However, this credit is capped at an aggregate of $10,000 for all calendar quarters per employee. 

Please note, however, that the payroll tax credits are still subject to change in the Senate and the final version of any law sent to the President may differ from the bill passed by the House of Representatives.  For more detailed information on these and other tax credits, please see our alert, Coronavirus: federal and state tax relief.

 

If you have any questions regarding these new requirements and their implications, please contact any member of the DLA Piper Employment group, or your DLA Piper relationship attorney.

 

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