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Employer / Business Alert: Federal Families First Coronavirus Response Act Effective April 2, 2020

UPDATE: On Wednesday, March 18, 2020, the Senate passed the Families First Coronavirus Response Act, and President Trump has now signed it into law. The Act contains several provisions that will significantly impact employers with fewer than 500 employees.

If this applies to you, your obligations become effective no later than April 2, 2020–15 days from the date of enactment–and will automatically expire on December 31, 2020. By March 25, 2020, you are required to post a notice informing your employees of their rights under this new law.

A summary of select provisions of the bill entitling qualified employees to job-protected paid sick leave is below.

Family & Medical Leave Act Expansion

  • Employers with fewer than 500 employees must provide 12 weeks of potentially job-protected (see exception below) paid FMLA leave for employees if they are unable to work or telework due to a need for leave to care for children under 18 whose school or childcare provider is closed due to COVID-19. (The first 10 days may be paid by other relief—see below.)
  • This 12 week leave applies only for employees if they are unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age 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 an emergency with respect to COVID-19.
  • You do not have to provide this leave for healthcare providers (as that term is defined by the FMLA) or emergency responders.
  • During the first 10 days of this leave, your employees may use accrued personal or sick leave (including Emergency Paid Sick Leave under the new regulation outlined below), but you cannot require employees to do so.
  • To qualify for this expanded leave benefit, an employee must have been working for at least 30 calendar days. There is no minimum number of hours worked required.
  • Employers may provide the first 10 days of this leave without pay. While employees can elect to substitute or use otherwise accrued paid leave during these initial 10 days, employers may not require employees to do so, no matter how their policies may read. Employees can elect to use their paid sick leave provided by the Emergency Paid Sick Leave Act below for this time to be paid.
  • After this initial 10-day period, employers must provide additional paid leave to their employees for the remaining 10 weeks. Employees must be compensated during this paid leave in an amount that is not less than two-thirds of the employee’s regular rate of pay (or the applicable minimum wage, if greater) for the number of hours the employee would normally be scheduled to work. The amount of pay during these 10 weeks is capped at $200 per day ($10,000 aggregate) per employee.
  • In the case of an employee whose schedule varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken leave, the employer shall use the following in place of such number:
    • (i) a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type.
    • (ii) If the employee did not work over such 6-month period, the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.
  • The U.S. Secretary of Labor may develop regulations to exempt small businesses (fewer than 50 employees) when the imposition of the new requirements would jeopardize the business as a going concern. Note that the normal FMLA exemption of employees who work at a site with fewer than 50 employees within a 75-mile radius does not apply here.

Restoration to Position

  • Employers with 25 or more employees must generally return employees to the same or substantially equivalent position under existing FMLA rules.
  • Employers with fewer than 25 employees are not required to return the employee to work if:
    • The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency during the period of leave.
    • You (the employer) make a reasonable effort to restore the employee to a position equivalent to the position the employee held when leave commenced with equivalent benefits, pay and other terms and conditions of employment.
    • If your reasonable efforts fail, you make reasonable efforts to contact the employee if an equivalent position described above becomes available. This “contact period” remains in effect for a one-year period beginning on the earlier of: (a) the date on which the qualifying need related to a public health emergency concludes; or (b) the date that is 12 weeks after the date on which the employee’s leave commences.
  • The provisions will go into effect on April 2, 2020, and they will expire on December 31, 2020.

Emergency Paid Sick Leave:

The emergency paid sick leave act requires employers to provide to each employee paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
  3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter *196 has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

For full-time employees, they are entitled to up to 80 hours of paid sick leave under this act. Part-time employees are entitled to a number of hours equal to the number of hours that such employee works, on average, over a 2-week period.

If the need for leave is for a use related to the employee’s own health (paragraphs 1-3 above) then the employee is entitled to be paid their regular rate of pay, not to exceed $511 per day and $5,110 in the aggregate.

If the need for leave is related to caring for others (reasons in paragraphs 4-6 above), the employee is entitled to be paid two-thirds their regular rate of pay (or minimum wage if that is greater), but not to exceed $200 per day and $2,000 in the aggregate for a use described in paragraphs 4-6 above.

In the case of a part-time employee whose schedule varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken paid sick time, the employer shall use the following in place of such number:

  • a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time, including hours for which the employee took leave of any type.
  • If the employee did not work over such 6-month period, the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

In the next 14 days the Secretary of Labor will issue guidelines to assist employers in calculating the amount of paid sick time

You (employers) must post a notice informing employees of their rights to leave. The DOL will be creating a required posting.

The law expressly provides that it does not preempt existing state or local paid sick leave entitlements. Also, this paid sick time is in addition to time available under an employer’s existing policies.

The provisions will go into effect on April 2, 2020, and will expire on December 31, 2020.

A violation of the law is a minimum wage violation under the FLSA.

Collective Bargaining Agreements

Employers with employees subject to collective bargaining agreements may be able to fulfill their obligations to fund paid leave by contributing to an applicable multiemployer fund, so long as the employees subject to the agreement are able to secure pay from the fund consistent with hours worked under the collective bargaining agreement.

Employer Tax Credit

Employers will receive a refundable tax credit against your share of Social Security taxes equal to 100% of qualified paid sick leave wages paid for each calendar quarter under the Emergency Paid Sick Leave Act or the FMLA Expansion.

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