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FMG Law Blog Line

House Passes Coronavirus Bill with Major Implications for Employers

Posted on: March 15th, 2020

By: Jeffrey A. Hord and David A. Cole,

Shortly past midnight on Saturday morning, the House of Representatives passed the Families First Coronavirus Response Act (the “Act”) on a bipartisan 363-40 vote, bringing the nation one step closer to implementing a sweeping financial aid package designed to address the Coronavirus outbreak. A copy of the entire bill, as amended, is available here.

The legislation comes on the heels of last week’s bipartisan emergency Coronavirus response initiative providing $8.3 billion in research and vaccine development funds. The bill will now head to the Senate for final approval, where it is expected to pass in substantially similar form due to President Trump’s vocal support for the legislation.

In addition to guaranteeing free Coronavirus testing by requiring private health insurers — and government programs such as Medicaid — to cover the cost of tests and doctor visits, while strengthening food security initiatives like TEFAP, SNAP and WIC, the Act also includes several employment-related provisions that are likely to have major implications for employers.

Amendments To The Family And Medical Leave Act:

If enacted into law, the Act would create a new type of leave under the Family and Medical Leave Act (“FMLA”) allowing for leave in cases of a “public health emergency.”

Answers to questions about the key parts of this potential change to the FMLA are below:

  • When Does Law Go Into Effect – If passed, it would stay in effect until December 31, 2020 (unless renewed by Congress).
  • When Is Leave Allowed – From now until the end of 2020, the Act would allow eligible employees to take FMLA leave to: (a) comply with a recommendation or order by a health care provider or public official to not attend work because of exposure to or symptoms exhibiting Coronavirus; (b) care for a family member being quarantined because of exposure to or symptoms exhibiting Coronavirus; or (c) care for a son or daughter whose school or place of care has been closed due to Coronavirus.
  • Which Employers Are Covered – While traditional FMLA leave requirements only apply to employers with 50 or more employees, the new FMLA leave for Coronavirus would apply to all employers with fewer than 500 employees. However, the Act does give the U.S. Department of Labor authority to issue regulations for good cause that could exempt small businesses with fewer than 50 employees if imposing the new requirements would “jeopardize the viability of the business as a going concern.” As of right now, we are unaware of the Department of Labor working on such regulations.
  • Which Employees Are Eligible – While traditional FMLA leave is only available to employees who have worked for 12 months and for 1,250 hours in the immediate preceding 12 months prior to taking the leave, the new FMLA leave for Coronavirus would apply to any employee (full or part-time) who has been employed for at least 30 calendar days.
  • Does The Employer Have To Pay The Employee While Out On Leave – The first 14 days of FMLA leave for Coronavirus may be unpaid. An employee may choose to substitute available paid leave during those 14 days, but the employer may not require it. After 14 days, the employer must provide paid leave for the remainder of the FMLA leave for Coronavirus in an amount that is no less than two-thirds of the employee’s regular rate of pay for the number of hours the employee would otherwise normally be scheduled to work.
  • What Is The Definition Of Family Member – an individual who is: (i) a pregnant woman, senior citizen, individual with a disability, or has access or functional needs; and (ii) who is a son or daughter of the employee, a next of kin of the employee or a person for whom the employee is next of kin; or a grandparent or grandchild of the employee.
  • Is The Employee Guaranteed The Employee’s Position Upon Return – Just like traditional FMLA leave, the employee is entitled to his/her job position upon return from this leave, except employees with less than 25 employees may be exempted if the employee’s position does not exist anymore because of the public health emergency.
Emergency Paid Sick Leave Act

The Act would also require any government or public agency with 1 or more employees and any private employer with fewer than 500 employees to give their employees paid sick leave for the following reasons: (a) to self-isolate because a diagnosis with Coronavirus; (b) to obtain medical diagnosis or care if experiencing symptoms of Coronavirus; (c) to comply with a recommendation or order by a public health official to not report to work because of a diagnosis of Coronavirus or symptoms exhibiting Coronavirus; (d) to care for a family member with Coronavirus or symptoms exhibiting Coronavirus; and (e) to care for a child whose school or place of care is closed due to Coronavirus.

  • When Does Law Go Into Effect – If passed, it would stay in effect until December 31, 2020 (unless renewed by Congress).
  • Which Employees Are Eligible – Emergency paid sick leave under the Act must be available to all employees for immediate use regardless of how long they have been employed.
  • How Much Paid Sick Leave Does An Employee Receive – Full-time employees must be given up to 80 hours of paid sick leave and part-time employees must receive a number of hours equal to the average hours they work over a 2-week period.
  • How Much Is The Employee Paid While Out – Employees who take leave to self-quarantine or to seek diagnosis or care must be paid at their regular rate. Employees who use the leave to care for an afflicted family member or to care for a child whose school has closed must be paid at two-thirds their regular rate.
  • What If An Employer Already Provides Paid Sick Leave – Employers with existing paid leave policies must provide this emergency paid sick leave in addition to the existing paid leave, and they may not change existing policies after the date of the Act to avoid these requirements.
  • Can An Employer Require Substitution Of This Leave For The New Paid FMLA Leave – An employee may use this emergency sick leave to cover the first 14 days of unpaid FMLA leave for Coronavirus (see above). However, an employer may not require an employee to use other paid leave before using this emergency sick leave.
Reimbursement for Employers:

The Act provides tax credits to reimburse employers for the costs of the paid FMLA leave and emergency sick leave discussed above. Specifically, the Act creates both: (1) a payroll credit for paid sick leave, and (2) a payroll credit for required family leave, allowed against the employer’s portion of Social Security taxes.

  • For paid emergency sick leave, the amount of the credit, on a per-employee basis, is limited to $511/day for employees that self-isolate, have Coronavirus symptoms, or are ordered to stay home; otherwise, the credit is capped at $200 per day. There is effectively a two-week cap on this credit, after which the new FMLA tax credit would kick in.
  • The amount of the FMLA leave credit, on a per-employee basis, is limited to $200/day and $10,000 total for all calendar quarters. These tax credits would cover one year, and could not be used in combination with the existing credit(s) for employers that provide paid family and medical leave to their employees.
State Unemployment Insurance:
  • The Act would also direct $2 billion to state unemployment insurance programs as emergency grants for processing and paying unemployment insurance (UI) benefits, and to provide immediate funding for staffing, technology, systems, and other administrative costs of state unemployment agencies.
  • Standard screening measures, such as “job seeker” requirements and mandatory waiting periods, would be waived for anyone applying for UI benefits who has either been diagnosed with COVID-19 or who has lost their job due to the spread of the virus.
  • The Act provides for full federal funding of extended unemployment compensation for any state that experiences and increase of ten percent (10%) or more in its unemployment rate over the previous year.
Additional Information
An earlier version of the bill (which can still be viewed here) included a permanent paid leave program that House Democrats said would help deter infected workers from returning to work too quickly and spreading the illness unintentionally. That feature (among others) was ultimately removed from the version that passed early Saturday morning; the amended H.R. 6201 is a more limited, temporary response to the specific public health emergency created by the coronavirus.

Even so, the bill’s protections are a major change in U.S. policy, particularly with respect to paid sick leave. It will be interesting to see whether the Act passes the Senate in its current form and, if so, whether it will be replaced by more permanent legislation for mandatory paid sick leave once it expires on December 31, 2020.

The FMG Employment team will be conducting a webinar on coronavirus issues on Tuesday, March 17, at 12:00 noon EST. To register, please click here.

In addition, 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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