Late on March 18, President Trump signed into law the Families First Coronavirus Response Act (HR 6201), which is aimed at containing the widening effects of COVID-19. Among other things, the Families First Act creates several significant new leave and sick pay obligations for covered employers. Those obligations will go into effect on April 2, 2020, and expire December 31, 2020.
FMLA Leave
First, the Act creates the "Emergency Family and Medical Leave Expansion Act" which will give eligible employees of companies with fewer than 500 employees the right to take leave from their jobs for certain qualifying needs. An eligible employee is one who has been employed by the employer for 30 or more days and who has a “qualifying need related to a public health emergency.” Both full- and part-time employees are eligible. A “qualifying need” is defined as being unable to work (or telework) due to a need for leave to care for the employee’s minor child if the child’s elementary or secondary school or place of care has been closed or a child care provider is unavailable due to a public health emergency.
Significantly, the provisions in the original version of HR 6201 allowing for FMLA leave due to an employee exhibiting symptoms of COVID-19 or to care for a family member exhibiting symptoms of COVID-19 were removed from the final legislation.
If an employee takes qualifying leave under the FMLA Expansion Act, the employee can take the first 10 days of leave as unpaid leave. The employee may elect to use any accrued vacation, personal, medical or sick leave instead of taking unpaid leave. After the 10 days, the employer shall provide partial paid leave for each additional day of qualifying leave. The payment for leave must be equal to at least 2/3 of the employee’s regular rate of pay multiplied by the number of hours the employee would otherwise have been scheduled to work. For employees without a fixed schedule, the employer can use a 6-month average of their daily hours worked. Pay is capped at $200 per day and $10,000 in total per eligible employee. Employees are entitled to take up to 12 weeks for this new qualifying need or the usual FMLA-qualifying reasons. Employees taking leave would be entitled to job restoration. Smaller employers (i.e., those with less than 25 employees) may be able to deny reinstatement under certain very limited circumstances provided they make reasonable efforts to offer the employee an equivalent alternative position. If those efforts fail, the employer must attempt to contact the employee to offer an equivalent position that becomes available within 12 months of when the health emergency concludes or the employee’s leave ends, whichever is earlier.
The Act also gives the Secretary of Labor the right to issue regulations exempting employers with less than 50 employees from the leave obligation if it is determined that the obligation would “jeopardize the viability of the business as a going concern.” It remains to be seen exactly if and how this will be implemented, but it appears that this exemption would be handled on an employer-by-employer basis.
The Families First Act did not change the FMLA’s health benefit continuation provisions, which requires an employer to continue group health coverage for an employee on FMLA leave. Whether an employee’s other benefits will continue if the employee takes leave for a public health emergency depends on the terms of the benefit plan documents and leave policies. Whether an employee’s benefits will continue during the paid sick leave provided under the Act (discussed below) also depends on the employer’s benefit plan documents and leave policies, so employers should check their benefit plan documents and leave policies. Plan amendments may be necessary to change your benefit continuation policies or procedures.
Sick Leave
The Families First Act also creates the "Emergency Paid Sick Leave Act" which requires all employers with under 500 employees to provide paid sick time to all employees (even new hires and part-time employees) who are unable to work or telework because:
Full-time employees who qualify for paid sick time are eligible for up to 80 hours of paid leave. Part-time employees are entitled to leave in an amount equal to the average number of hours they work over a two-week period. Employees must receive full pay, up to $511 per day and $5,111 in total, for time missed due to their own health reasons (reasons 1-3 above), and must be paid two-thirds (2/3) pay, up to $200 per day and $2,000 in total, for time missed to care for a child or another individual or because they are off work due to other approved “substantially similar conditions” (reasons 4-6 above). Unused paid sick leave does not carry over from year-to-year and does not have to be paid out upon termination of employment.
Paid Sick Leave is in addition to any other paid leave the employee is entitled to, so for Michigan employers, that means it is in addition to leave time under the Paid Medical Leave Act.
Other Notable Provisions
The Families First Act will provide dollar-for-dollar payroll tax credits for employers to help offset the cost of paid FMLA leave and paid sick leave.
The Act prohibits any cost-sharing for diagnostic products for the detection of COVID-19 and for health care provider office visits, urgent care center visits and emergency room visits that result in an order for or administration of the diagnostic product. The law also prohibits any pre-authorization or other medical management requirements for such services.
If you have questions, please contact any member of Warner’s Labor and Employment or Employee Benefits and Executive Compensation Practice Groups.