Status and Summary of the Federal Government's Pending Families First Coronavirus Response ActMarch 17, 2020 – Client Alert
Early Saturday morning, March 14, 2020, the House passed HR 6201, entitled “Families First Coronavirus Response Act,” then late on Monday, March 16, the House passed a second bill revising it (together, the “Bill”). This Client Alert is based on the status of the Bill as of approximately 12:00 p.m. PDT, Tuesday, March 17, 2020. We will provide updates as the status evolves.
Current Status of the Bill
While the House has passed the Bill, it is not final and has not yet become law. The Bill is now with the Senate, who is expected to review and vote on it this week. If the Senate approves the Bill, it will next go to President Trump’s desk for signature.
Summary of the Bill as it is Currently Drafted
The current version of the Bill, if passed by the Senate and approved by the President, would apply to private employers 15 days after the Bill’s enactment. Those covered employers would be required to provide paid job-protected leave for certain Coronavirus-related absences.
Four key components of the Bill are addressed below.
1. Emergency Paid Sick Leave Act
If passed as currently drafted, private employers with fewer than 500 employees would be required to provide employees with two weeks of paid sick leave (paid by the employer), at the employee’s regular rate, in order to: (1) quarantine upon government orders or doctor’s orders due to Coronavirus; (2) seek a diagnosis or preventive care for Coronavirus; (3) care for someone who has been quarantined due to Coronavirus; or (4) care for a child whose school or place of care is closed, or if the child care provider is unavailable.
Paid sick leave taken for reasons one or two above are paid at the employee’s regular rate, but capped at $511 a day and $5,110 in aggregate. Paid sick leave taken for reasons three and four above would be paid at two-thirds the employee’s regular rate, but capped at $200 a day and $2,000 in aggregate. Full-time employees are entitled to 80 hours of leave, and part-time employees are entitled to the typical number of hours that they work in a typical two-week period. Employees are immediately eligible for this leave.
For purposes of this part of the Bill, a “family member” includes an employee’s child, parent, spouse or domestic partner, sibling, next of kin, an individual for whom the employee is next of kin, grandparent or grandchild, but only if they are pregnant, a senior citizen, or an individual with a disability or who has access or functional needs.
It is worth noting that, after the House passed the revisions on Monday night, the Bill is now silent on whether or not employers must provide these benefits in addition to any existing paid leave benefits. However, the revised Bill does state that employers cannot require employees to exhaust other paid leave which an eligible employee may have before using this paid leave.
The Bill ensures employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are provided with leave. The Bill also includes anti-retaliation protections, and generally provides for remedies in line with Fair Labor Standards Act penalties for failure to pay minimum wages.
2. Emergency Family and Medical Leave Expansion Act
If passed as currently contemplated, private employers with fewer than 500 employees would be required to give their employees the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act (“FMLA”). Notably, unlike the usual FMLA provisions, the Bill makes this applicable even to employers with fewer than 50 employees.
Eligible employees must have been on the employer’s payroll for at least 30 days, and may use emergency FMLA leave for a “qualifying reason,” which the Bill defines as caring for a child of an employee if the child’s school or place of care has been closed or if the childcare provider is unavailable, due to Coronavirus.
The first ten days of leave are unpaid (unless an employee chooses to substitute available vacation leave, personal leave, or other medical or sick leave during this period).
After the first ten days, for the remaining 10 weeks employers must provide paid FMLA leave at a rate of no less than 2/3 of the employee’s usual rate of pay (assuming leave is necessary for one of the above purposes), but capped at $200 a day and $10,000 in aggregate.
As with traditional FMLA leave, this leave is job-protected, meaning an employer must return the employee to the same or equivalent position upon their return to work. There is an exception to this requirement for employers with fewer than 25 employees if the employee’s position does not exist after FMLA leave due to an economic downturn or other operating conditions that affect employment caused by a public health emergency during the period of leave.
The Bill allows the Secretary of Labor to decide to exempt small businesses (defined as those with fewer than 50 employees) if the required leave would jeopardize the viability of their business.
Further, the Bill appears to exclude small employers from being sued for non-compliance. It exempts employers with fewer than 50 employees in a 75-mile radius from civil FMLA damages in an employee-initiated lawsuit.
3. Employer Tax Credits for Emergency Paid Sick Leave and Family and Medical Leave
The Bill provides for a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA, including tax relief for self-employed individuals.
While we recommend discussing tax implications with your tax advisor, note that the Bill offers a possible refundable tax credit for employers equal to 100 percent of:
- qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act that are paid by an employer for each calendar quarter;
- qualified sick leave equivalent amount for eligible self-employed individuals who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to Coronavirus;
- qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act that are paid by an employer for each calendar quarter; and
- qualified family leave equivalent amount for eligible self-employed individuals. The credit is allowed against income taxes and is refundable.
4. Emergency Unemployment Insurance Stabilization Access Act
The Bill provides $1 billion in federal funding for emergency grants to states for activities related to processing and paying increased unemployment insurance (“UI”) benefits.
Half of this is intended to provide immediate additional state funding for staffing, technology, systems, and other administrative costs, so long as they meet the following basic requirements about ensuring access to earned benefits for eligible workers:
- Require employers to provide notification of potential UI eligibility to laid-off workers;
- Ensure that workers have at least two ways (for example, online and phone) to apply for benefits; and
- Notify applicants when an application is received and being processed and, if the application cannot be processed, provide information to the applicant about how to ensure successful processing.
The remaining $500 million would be reserved for emergency grants to states that experienced at least a 10 percent increase in unemployment.
This Bill is complicated emergency legislation that raises many questions yet to be answered.
We will continue to monitor this Bill and any other legislation and guidance that develops as the situation evolves.
We encourage you to reach out to a member of our Employment Law Group with any questions or concerns.