Legal Impact of Coronavirus

By Allison C. Pearson, H. Wayne Young and Katherine C. Campbell

On Wednesday, March 18, 2020, the U.S. Senate approved H.R. 6201, the Families First Coronavirus Response Act (FFCRA), and President Donald Trump signed the bill into law.

The final version of the law contains significant revisions to the draft bill we reported on earlier this week.

The FFCRA, as passed, includes two provisions regarding paid leave: 1) the Emergency Family and Medical Leave Expansion Act; and 2) the Emergency Paid Sick Leave Act. Both provisions will go into effect Thursday, April 2, 2020 (15 days after signing the bill). They expire on December 31, 2020. 

Emergency Family and Medical Leave Expansion Act

• As we previously reported, this is an expansion of the Family Medical Leave Act (FMLA) that covers employers with 500 or fewer employees, and employees who have been employed by the employer for at least 30 calendar days. Thus, these provisions cover employers who are not normally covered by the FMLA in the limited circumstances described below.
• The final bill provides paid leave only when an “employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or if the child care provider of such son or daughter is unavailable, due to a public health emergency.” This is a significant departure from the bill the U.S. House of Representatives passed earlier this week which included several other qualifying reasons.
• For employees who qualify under this reason, the law provides up to 12 weeks of leave, the first 10 days of which are unpaid. An employee may elect to use paid leave during the first 10 days, but an employer cannot require an employee to do so. After the first 10 days, the remaining period must be paid at two-thirds of the employee’s regular rate. 
• Note: Although an employee who is unable to work for an extended period of time due to being ill, or caring for an immediate family member, with the coronavirus or complications therefrom would not be eligible for paid leave under these provisions, they may be eligible for unpaid leave under the FMLA’s standard provisions. 
• Paid leave is capped at $200 per day per employee, not to exceed $10,000 in the aggregate.
• The FMLA’s usual requirement that an employee be restored to the same or equivalent position after leave does not apply to employers with fewer than 25 employees if the employee’s position no longer exists as a result of economic conditions or other changes in the employer’s operations caused by the public health crisis during the period of leave. Employers with fewer than 25 employees must still make reasonable efforts to restore employees to the same or equivalent positions, and if those reasonable efforts fail, must make efforts to contact and reinstate the employee if an equivalent position becomes available within a one-year period beginning on the earlier of: a) the date on which the qualifying need related to a public health emergency concludes, or b) the date that is 12 weeks after the date the employee’s leave started.
• Importantly, the final version states that employers of healthcare providers and emergency responders may exclude such employees from the expanded FMLA provisions. Thus, employers of healthcare providers and emergency responders are not required to provide expanded FMLA coverage for those employees. 
• The term “healthcare provider” includes the following: a doctor of medicine or osteopathy, podiatrists, dentists, clinical psychologists, optometrists, chiropractors (limited to treatment consisting of manual manipulation of the spine to correct a subluxation as demonstrated to exist by x-ray), nurse practitioners, nurse midwives, clinical social workers, and physician assistants.
• The final version also gives the Secretary of Labor authority to issue regulations to exempt small businesses with fewer than 50 employees “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” While employers of healthcare providers and emergency responders can exempt those employees outright, small businesses would need to apply for an exemption or waiver from the Secretary of Labor.
  

Emergency Paid Sick Leave Act

Emergency paid sick leave applies to companies with 500 or fewer employees. This provision provides full-time employees eighty hours of paid sick time at their regular rate of pay and part-time employees the equivalent of two weeks’ worth of hours at their regular rate of pay for 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 who is subject to an order to isolate by Federal, State, or local authorities or on recommendation of a health care provider.
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 Treasury and the Secretary of Labor.

• Employees who take emergency sick leave for reasons (1), (2), or (3), must be compensated at their regular rate, with a cap of $511 per day, and $5,110 in the aggregate. Employees who take emergency sick leave for reasons (4), (5), or (6) above, must be compensated at two-thirds their regular rate, with a cap of $200 per day and $2,000 in the aggregate.

• As above, employers of health care providers and emergency responders may exempt such employees from the paid leave provisions.

• Employees may take emergency paid sick leave for any of the reasons described above regardless of their tenure with the company. Employers must allow employees to take the emergency paid sick leave under this provision before taking any other paid leave the employer may provide. Further, employers are prohibited from amending their paid leave policies to avoid paying leave in addition to emergency paid sick leave.

• Employers CANNOT discharge, discipline, or otherwise discriminate against employees who are eligible for, may become eligible for, request, or take emergency paid sick or who complain regarding emergency paid sick leave. Employers who violate these provisions may be penalized according to the Fair Labor Standards Act as though they failed to pay minimum wage. 
• The Secretary of Labor is charged with producing a notice outlining employee rights under this provision, which all covered employers will be required to post. We will forward this posting once the Secretary of Labor produces it.
• Employers who pay employees for paid leave under either provision will be eligible for tax credits for 100 percent of qualified paid leave wages against their Social Security payroll taxes. The caps on tax credits mirror the caps for employees on paid leave. Under the Emergency Family and Medical Leave Expansion Act the tax credit cap will be $200 per day per employee. Leave under the Emergency Paid Sick Leave Act will be capped at $511 per date for employees who personally sick or quarantined (reasons (1), (2), and (3)), or $200 per day for employees taking leave to care for others (reasons (4), (5), and (6)).

Next Steps

The White House and many members of Congress have expressed concerns over the burden that new paid leave obligations will place on small businesses. The Senate is now turning to another phase of legislation to address that burden. The Treasury Department issued a proposal on Wednesday, March 18, 2020, which would provide loans to cover 100 percent of payroll for six weeks with a cap of $1,540 per week per employee.

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Allison C. Pearson is an associate in the Labor and Employment Practice Group. Allison advises employers in all aspects of labor and employment laws including compliance with Title VII of the Civil Rights Act of 1964, the Family Medical Leave Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the National Labor Relations Act, and the Occupational Safety and Health Act.  

H. Wayne Young is a partner with the firm and a member of the Labor and Employment Law Practice Group. His practice focuses on employment and labor law including discrimination matters, harassment, wage and hour compliance, family and medical leave and covenants not to compete. He advises his clients in these matters from the compliance stage, to defending government investigations and litigation if necessary.

Katherine C. Campbell is an associate in the Litigation Practice Group at Friday, Eldredge & Clark. She serves as litigation counsel for individuals and businesses in complex business and commercial disputes including employment claims, collective action wage and hour claims, and breach of contract matters. 

Disclaimer: The information included here is provided for general informational purposes only and should not be a substitute for legal advice nor is it intended to be a substitute for legal counsel. For more information or if you have further questions, please contact one of our Attorneys.