May 26, 2020

COVID-19 Update: Summary of Federal Emergency Paid Leave Benefit Law

We are closely tracking the Families First Coronavirus Response Act (H.R. 6201) passed by the United States House of Representatives in response to the coronavirus (COVID-19) outbreak.  The bill now goes to the United States Senate, and if passed, thereafter reconciled with the House version and then presented to the President for his signature.

In short, the bill, among other things: (1) extends and expands the protections of FMLA job-protected leave for certain coronavirus-related absences, including requiring paid FMLA leave benefits; (2) provides a new paid sick leave entitlement for similar absences; and (3) provides tax credits to help employers defray the costs of paying these benefits.  Importantly, the bill is drafted such that these new entitlements would remain in effect for 2020.  We outline key portions below and will continue to provide updates as we await further legislative developments.  

  1. The bill expands the FMLA’s reach to provide job protection and partial wage replacement for impacted employees.

The Emergency Family and Medical Leave Expansion Act would amend the Family Leave and Medical Leave Act of 1993 by permitted eligible employee to use FMLA leave related to a public health emergency.  Below are key considerations for employers related to these amendments:  

  • This new leave entitlement would apply to employers with fewer than 500 employees and employees working for at least 30 days for a covered employer would be eligible immediately to use leave.  It may also exclude employers with fewer than 50 employees where a hardship exemption applies.

  • Eligible employees make take up to twelve (12) weeks of job-protected FMLA leave for the following reasons:

  1. To comply with a recommendation or order by a public official or health care provider to quarantine due to exposure to or symptoms of coronavirus and the employee could not perform the essential functions of the job while also complying with such recommendation or order;

  2. To care for a family member who is in quarantine based on a recommendation or order due to exposure to or symptoms of coronavirus; and

  3. To care for a child if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to coronavirus.

  • The first 14 days of FMLA leave is unpaid, but employees may elect to substitute accrued vacation, personal leave, or sick leave for leave under this section.  An employer may not require such substitution.

  • After the 14 days are exhausted, employers must pay the employee not less than two-thirds of an employee’s regular rate of pay for each day of FMLA leave taken thereafter.  There are separate provisions regarding this paid leave benefit for employees subject to a multi-employer collective bargaining agreement.

  • For the most part, this is job protected leave.  Employers can still take actions that will not provide any greater right to employment than those not on leave, and further, there are some additional limitations to job protection rights for employees working at an employer with fewer than 25 employees.  

  • The law would go into effect just 15 days after passage and would remain in effect until December 31, 2020. 

  1. The bill provides a new paid sick leave entitlement to impacted employees.

The Emergency Paid Sick Leave Act would permit employees to use sick leave related to the Coronavirus, the key components of which are set forth below. 

  • Like the FMLA expansion, this would apply to employers with fewer than 500 employees. 

  • All full-time employees (subject to limited exceptions) regardless of their length of employment would be entitled to take 80 hours paid sick leave immediately.  Part-time employees would get a pro-rated amount. 

  • These new sick leave amounts are in addition to and not in lieu of any other statutorily provided or employer-provided paid sick leave benefits, and further, employers must permit employees to use Coronavirus-related sick leave before other sick leave. 

  • These amounts cannot be carried over into the new year, nor are they paid out at termination.

  • Employees could use this sick leave to: 

  1. self-isolate because the employee is diagnosed with coronavirus;

  2. obtain a medical diagnosis or care if such employee is experiencing the symptoms of coronavirus;

  3. comply with a recommendation or order by a public official or health care provider to quarantine due to exposure to or symptoms of coronavirus;

  4. care or assist a family member who is self-isolating because of a coronavirus diagnoses or who is experiencing symptoms of coronavirus and needs to obtain medical diagnoses or care;

  5. to care for a child if the child’s school or place of care is closed or the child-care provider is unavailable.

  • Employers are required to pay employees at their regular rate of pay during the sick leave period regarding their own coronavirus-needed leave, and at two-thirds of their regular rate of pay if they are taking leave to care for a family member or because of school closure or child-care related issues.   

  • Employers must post a notice related to this section in a conspicuous place in the workplace.  A model notice will be provided by the Department of Labor within 7 days of enactment of this bill.

  • The law would go into effect just 15 days after passage and would remain in effect until December 31, 2020. 

  1. The bill provides tax credits to employers paying out leave benefits.

The Tax Credits For Paid Sick And Paid Family And Medical Leave provides a refundable tax credit equal to 100% percent of qualified paid leave benefits paid by an employer subject to certain caps and offset against social security taxes paid by the employer.    

  1. What’s next and what to expect.

President Trump has signaled, via tweet, his approval of the bill, and the Senate may vote on some version of it very soon.  Because these benefits will be available to employees almost immediately after enactment, employers should plan to the following:

  • Confirm employee headcount, taking into account part-time employees and any planned layoffs, to determine which provisions of the bill would apply;

  • Think about drafting a stand-alone emergency leave policy that outlines these FMLA and sick leave rights, with an eye for ensuring that this policy aligns with the company’s leave of absence, sick leave, and PTO policies;

  • Prepare to account for the new paid FMLA and sick leave entitlements from a financial/accounting perspective;

  • Consider potential fluctuations in staffing levels in anticipation of employees taking advantage of these leave entitlements this calendar year; and

  • Be mindful of parallel or overlapping leave and PTO requirements under applicable state and local laws.

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About this Author

Michael S. Arnold, Mintz Levin Law Firm, Labor Law Attorney
Member / Chair, Employment, Labor & Benefits Practice

Michael Arnold is Chair of the firm's Employment, Labor & Benefits Practice.  He is an employment lawyer who deftly handles a wide array of matters. His capabilities include counseling on everyday HR life cycle issues, defending management and senior executives in connection with employment-related proceedings, and assisting companies navigate the complex employment issues that arise in transactions.  Michael’s clients appreciate his strong emphasis on providing not just legal advice, but also practical advice, that aligns with organizational and HR strategies while...

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David Barmak, Employment Attorney, Executive Advisor, Mintz Law FIrm
Member / Chair Emeritus, ELB Practice

David is an experienced trial lawyer and trusted advisor to businesses and their executives with a focus on employment law and HR issues. He has litigated hundreds of cases in federal and state courts and arbitrations nationwide. David is devoted to helping clients accomplish their compliance, risk reduction, and employee relations objectives. David has written and lectured extensively on employment law, trial practice, and alternative dispute resolution, and is often quoted in the media.

As a trial lawyer, David has handled hundreds of cases covering issues such as employment discrimination, whistleblower and other retaliation, noncompetition agreements and trade secret issues, wage and hour (FLSA) compliance, class and collective actions, and employment contract disputes. Clients have also regularly looked to David to litigate disputes involving a broad range of non-employment issues, including contract, partnership, shareholder, technology, and outsourcing.

As a trusted advisor, David has helped clients across a broad array of industries to reduce employment practices risks, and adopt best practices relating to wage and hour laws, employee leave laws, internal investigations, dispute resolution policies and practices, non-compete and trade secret issues, employee training, personnel and other policies, and WARN Act issues and other matters. He also is frequently involved in the negotiation and drafting of executive employment, separation, and related agreements.

David's clients include publicly and privately held companies, non-profits and trade associations, and their executives in a broad range of industries, including:

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David chaired the firm’s Employment, Labor & Benefits Practice for more than a decade. He has been recognized by several publications including Chambers USA, a leading legal research guide, in which clients interviewed described David as a “superior lawyer who is very knowledgeable and attentive” known for his “practicality and strong communication skills.”

David also has frequently written, lectured, and been quoted on issues such as class action risk mitigation, use of arbitration agreements and class action waivers, post-employment breaches of fiduciary duties, employee versus independent contractor status, employment discrimination, alternative dispute resolution, and budgeting for litigation. He is also co-editor of Mintz Levin’s Employment Matters blog.

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Danielle represents clients in employment disputes and investigations. 

Prior to joining Mintz, Danielle was an associate with a Washington, DC law firm dedicated to employment law. Managing a docket of 30 to 40 clients in plaintiffs’ federal and private sector employment matters, she regularly prepared and filed complaints before the Equal Employment Opportunity Commission (EEOC), assisted clients in investigations, responded to proposed disciplinary actions, drafted complaints of discrimination, and advocated for clients at mediations and settlement conferences — successfully...

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