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FMG Law Blog Line

House Amends Coronavirus Bill to Ease Burdens on Small Businesses

Posted on: March 17th, 2020

HOUSE AMENDS CORONAVIRUS BILL TO EASE BURDENS ON SMALL BUSINESSES

By Bill Buechner and Justin Boron

The U.S House of Representatives, by unanimous consent, amended the Families First Coronavirus Response Act last evening. Although the amendments were characterized as technical in nature, there were several significant substantive changes made to the legislation in an attempt to respond to concerns that it imposes too substantial of a burden on small businesses.

Particularly, the amended act formalizes exemption of employers with 50 or fewer employees from liability. The amended act makes clear that paid leave requirements are not triggered when the employee still can perform his  job by teleworking from home. Also, the amended act will allow employers to construct compliant paid leave policies so that amounts they pay employees are subject to tax credits so they effectively will be paid for by pass-through credits from the federal government.

Our summary of the initial legislation passed by the House on March 14, 2020 can be reviewed here.

With respect to the Emergency Family and Medical Leave Expansion Act, the most significant changes are as follows:

  • The bill now exempts employers with fewer than 50 employees from civil liability for any violations
  • Employers who are health care providers or emergency responders may elect to exclude their employees from coverage
  • The bill now limits “qualifying need related to a public health emergency” to mean “the employee is unable to work or telework due to a need for leave to care for the son or daughter under age 18 years of such employee if the school or place of care has been closed or the child care provider of such son or daughter is unavailable due to a public health emergency.” (emphasis added)
  • The amended bill reduces the amount of initial unpaid leave from 14 days to 10 days
  • The amended bill limits the amount of new Coronavirus paid FMLA leave for each employee to $200 per day and $10,000 in total for the duration of the leave. This critical change means that employers can structure their paid leave obligation under FMLA leave so that they will receive payroll tax credits by the government for providing the paid leave required by this new law.

Previously, employers were faced with the prospect of being required to pay 2/3 of compensation to highly paid employees. This meant that employees making more than $80,000 would have received 2/3 of their compensation paid for exclusively by the employer. This provision was a focus of concern from US Chamber and the national Federation of Independent Businesses, as well as many other employer groups.

With respect to the Emergency Paid Sick Leave Act, the most significant changes are as follows:

  • Clarifies that employee must be unable to work or telework
  • The amended bill specifies six grounds for emergency paid sick leave, which generally fall into two categories: (1) sick leave needed for the employee’s own Coronavirus diagnosis/symptoms or quarantine/isolation order; and (2) sick leave needed to care for others because of their Coronavirus diagnoses/symptoms or quarantine/isolation order
  • Employers who are health care providers or emergency responders may elect to exclude their employees from coverage
  • Similar to the analogous FMLA leave provisions, the amended bill limits the amount of paid leave to $511 per day and $5,110 total for leave required due to the employee’s own Coronavirus diagnosis/symptoms or quarantine order. There were no limits in the original version.
  • The amended bill limits the amount of paid sick leave to $200 per day and $2,000 total for leave required due to the employee’s need to care for others.  There were no limits in the original version.

In addition, the amended bill expands employers’ tax credits to include health insurance contributions to employees who take the Coronavirus-related leave, as well as the 1.45% Medicare tax for such employees.

Whether these changes will be sufficient to earn passage in the U.S. Senate later this week remains to be seen. FMG will keep you posted on the latest legislative developments.

Additional information: 

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues every day for the next week. We will discuss the impact of Coronavirus for companies in general, but also for business in insurance, healthcare, California specific issues, cybersecurity, and tort. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

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