Now You Know It: Special Edition

Late last week, with support from the White House, the House of Representatives passed a comprehensive bill that would increase government funding to combat the spread of the coronavirus, while also providing greater workplace protections for Americans affected by the virus directly or indirectly. If passed by the Senate and signed into law, the Families First Coronavirus Response Act (H.R. 6201) will expand the existing Family Medical Leave Act and will introduce the Emergency Paid Sick Leave Act, collectively expanding mandatory paid leave benefits for many American workers.

What Kind of Leave is available?

The bill promotes multiple funding measures to enhance government’s response to the spread of the coronavirus and the threat of COVID 19. As it pertains to employee leave, the bill effectively creates up to twelve weeks of paid leave for employees who are doing one of the following:

  1. Quarantining or otherwise seeking treatment due to exposure to or infection by the coronavirus;
  2. Caring for a family member (somewhat broadly defined) under the same circumstances; or
  3. Caring for a child whose school is closed or whose day care provider is unavailable because of the coronavirus pandemic.

Under the proposed legislation, most private employers with less than 500 employees must extend FMLA leave to any eligible employee who has worked for the employer for at least 30 days. However, businesses with fewer than 50 employees may seek an exemption “when imposition would jeopardize the viability of the business as a going concern.” What the exemption might mean in practice remains to be seen.

What Kind of Pay is available?

The bill combines mandatory pay under the extended FMLA provisions with two weeks of mandatory paid sick time to ensure continued compensation. Generally speaking, employees will be entitled to:

  • If quarantining or treating themselves, up to 80 hours full pay, then 2/3 pay for the balance of the leave, up to 12 weeks;
  • If caring for an exposed or sick family member, or a child home from school or daycare, 2/3 regular pay for the balance of the leave, up to 12 weeks.

Additional Employer Obligations.

Employers need to be aware of the following rights and restrictions:

  • Mandatory paid sick time is in addition to whatever paid sick time the employer already provides. And employers can’t eliminate existing leave policies in response to the new rules.
  • As with most employment laws, written Notices must be posted.
  • Employers may require covered employees out on paid leave to provide reasonable notice regarding status, return to work, etc.
  • Generally, employers must restore employees to their previous position, but a qualified exemption exists for employers with fewer than 25 employees.
  • Part time employees are leave eligible, generally on a pro-rated basis.
  • Paid sick leave terminates as soon as the basis for the leave terminates; in other words, the employee can’t stay out for 12 weeks if the doctor says, “You’re fine,” after three.
  • Penalties exist for employers who retaliate or otherwise fail to comply.

Tax Credits for Employers.

Covered employers may seek tax credits for 100% of sick leave pay or expanded FMLA pay subject to certain daily and quarterly caps.

Final Points.

Notice that the proposed legislation affects smaller employers not otherwise subject to the FMLA while exempting the largest employers (500 or more employees) from the benefits and burdens of the legislation. Employees don’t need to vest to be eligible for sick leave pay, and they need have worked only thirty days to be eligible for the expanded FMLA leave.

Keep in mind that the Senate may modify the bill further before approving it. Finally, consider that this is merely a summary of portions of a 110-page piece of legislation. Before you enact changes, study the rules and talk to your legal and tax professionals. If you're concerned or have specific questions, do not hesitate to contact us at info@wrightbeamer.com or (248) 477-6300.