Expanded Family and Medical Leave Act Provisions Due to Coronavirus – WHAT YOU NEED TO KNOW

On March 18, 2020, H.R. 6201, The Families First Coronavirus Response Act (“the Act”), was enacted into law. The Act requires the expansion of paid sick leave and Family and Medical Leave Act (FMLA) in response to the sweeping coronavirus (COVID-19) pandemic in the United States. The changes are in effect through December 31, 2020, with the expectation that if the pandemic continues, further extensions will be considered.

Who is Covered by the Expansion?

The Act applies to certain public employers, and private employers with less than 500 employees, subject to several exemptions.

1. If an employee is a healthcare provider or an emergency responder, the employer has the ability to exclude these employees from the expanded paid sick leave and FMLA provisions. This is the individual option of each employer who employs individuals in these fields. Further guidance is expected from the Department of Labor regarding the exact definitions of healthcare provider and emergency responder.
2. If a small business, defined as less than 50 employees, determines that the expanded FMLA provisions would jeopardize the viability of the business, the employer may seek an exemption from the Department of Labor to this expansion. Guidance from the Department of Labor is expected shortly on the process these employers can use in order to seek this exemption.

What are the Changes?

The Act provides the following expanded access to leave to all employees:

1. Two weeks, up to 80 hours, of paid sick leave at the employee’s regular rate of pay if the employee is unable to work because of a quarantine, and/or the employee is experiencing COVID-19 symptoms and seeking a medical diagnosis. An employee may not electively quarantine and seek access to this sick leave. The quarantine must be pursuant to Federal, State, or local government order or advice of a health care provider.
2. Two weeks, up to 80 hours, of paid sick leave at two-thirds the employee’s regular rate of pay if the employee is caring for an individual subject to quarantine (as defined above), or care for a child (under 18 years of age) whose school or childcare provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor. Further guidance on what may be considered a substantially similar condition is forthcoming.

In addition, if an employee covered by the Act has been employed for at least 30 days, an additional 10 weeks of paid family and medical leave, at two-thirds the employee’s regular rate of pay, is available if the employee is unable to work due to a need to care for a child whose school or child care provider is closed or unavailable for reason related to COVID-19. These employees have access to a total of 12 weeks of paid leave.

How Does an Employer Determine the Calculation of Pay Under the Act?

If the employee accesses the expanded sick leave for reasons related to their own health or quarantine, the employee will receive for each applicable hour the greater of their regular rate of pay, the federal minimum wage in effect under the FLSA, or the applicable State or local minimum wage. The total amount of pay is capped at $511 per day, and $5,110 over the two-week period.

If the employee accesses the expanded FMLA leave for reasons related to the care of an individual in quarantine, or a substantially similar condition, the total amount of pay is capped at $200 per day, and $2,000 over the two-week period.

When is the Effective Date?

The expanded provisions of paid leave will go into effect on April 1, 2020.

What are the Financial Implications for an Employer Covered by the Act?

The Act mandates the employers are responsible for the payment of expanded sick leave, and specifically notes that any expenditure by an employer under these expanded sick leave provisions is covered by a 100% dollar-for-dollar refundable tax credit. While the employer must pay the leave now, the Act is clear that the expenditures come back to the employer in the future. For instance, private sector employers that provide paid sick leave and expanded family and medical leave required by the Act are eligible for reimbursement of the costs of that leave through refundable tax credits.

What if an Employer Closes or Furloughs Workers in Response to COVID-19?

If an employer closes on or after April 1, 2020, and an employee has yet to start their sick leave, the employer does not need to pay under the provisions of the Act, even if the employee’s sick leave qualifies under the Act.

If an employer closes on or after April 1, 2020, and an employee has started their sick leave under the provisions of the Act, the employer is only responsible to pay the sick leave that was accrued by the employee up to the date of closure. At the point in time the employer closes, the employee no longer has access to the expanded leave provisions.

If an employer furloughs an employee on or after April 1, 2020, there is no access to the expanded sick leave provisions of the Act.

What does this mean for Employers in Virginia?

Governor Northam issued a State of Emergency on March 12, 2020. The most current update to the State of Emergency on March 23, 2020, closed all public K-12 schools for the duration of the academic year (approximately June 2020), banned public gatherings of more than 10 people, closed all recreation and entertainment businesses, prohibited all restaurants and establishments in the food services industry from offering dine-in service, and closed all non-essential retail businesses, all effective March 24, 2020. The following employers are deemed essential, and may remain opening during their normal business hours:

• Grocery stores, pharmacies, and other retailers that sell food and beverage products or pharmacy products, including dollar stores, and department stores with grocery or pharmacy operations;
• Medical, laboratory, and vision supply retailers;
• Electronic retailers that sell or service cell phones, computers, tablets, and other communications technology;
• Automotive parts, accessories, and tire retailers as well as automotive repair facilities;
• Home improvement, hardware, building material, and building supply retailers;
• Lawn and garden equipment retailers;
• Beer, wine, and liquor stores;
• Retail functions of gas stations and convenience stores;
• Retail located within healthcare facilities;
• Banks and other financial institutions with retail functions;
• Pet stores and feed stores;
• Printing and office supply stores; and
• Laundromats and dry cleaners.

Employers that remain open to the public, and have employees working as of April 1, 2020, are going to undoubtedly encounter employees needing to take sick leave due to COVID-19. Each situation is going to require close adherence to the provisions of the Act, and potential future legislation. Should you have any questions about COVID-19, please do not hesitate to contact the attorneys at Ford Richardson.

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Should you have any questions about the cases discussed here or other legal issues, please do not hesitate to contact the lawyers at Ford Richardson.

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