Newly Enacted Federal Paid Leave Law: Families First Coronavirus Response Act

By: Kai McGintee and Tara Walker

Update: The effective date of the Federal Paid Leave law is now April 1st.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act into law. This federal paid leave law is the first of its kind and being enacted in response to the emerging COVID-19 pandemic.

The law, which now takes effect on April 1st and expires on December 31, 2020, requires that employers with less than 500 employees (with certain exceptions) provide paid sick leave to their employees for COVID-19 related reasons. The law also requires that employers provide employees with partially paid leave to care for dependent children due to school closures caused by COVID-19. Employers may recoup the amounts paid out to employees for paid leave through quarterly payroll tax credits.

Emergency Paid Sick Leave Act

All employers with less than 500 employees must provide paid sick leave to employees who are unable to work (or telework) due to one of the following:

1. The employee is subject to a federal, state, or local isolation or quarantine order related to COVID-19;
2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
3. The employee is experiencing symptoms consistent with COVID-19 and is seeking a medical diagnosis;
4. The employee is caring for an individual who is subject to a federal, state, or local isolation or quarantine order (at two-thirds regular rate of pay);
5. The employee is caring for a child for whom the school or childcare has been closed or is unavailable due to COVID-19 precautions (at two-thirds regular rate of pay); or
6. The employee is experiencing a substantially similar condition specified by the Department of Health and Human Services Secretary (at two-thirds regular rate of pay).

This federal paid leave is in addition to any other paid sick leave or PTO that the employee is entitled to take under the employer’s existing policies. Employees have the right to use this federal paid leave first before exhausting any of their available PTO.

Q. How long is the new federal paid sick leave?

For full-time employees, employers must provide up to 80 hours of paid sick leave. For part-time employees, employers must provide paid sick leave in an amount equivalent to the number of hours the employee would work in an average two-week period.

However, if a period of quarantine is less than 80 hours, then paid sick leave will end on the next scheduled shift of that employee after the need for leave ends. For example, where an employee is instructed by a healthcare provider to self-quarantine pending a test for COVID-19 and the employee begins paid sick leave, if the employee receives a negative test result after only three days and the self-quarantine ends, the paid sick leave would end at the employee’s next scheduled shift.

Q. How much must I pay?

You must pay the full regular rate of pay for each employee, for the full 80 hours of leave, unless it is for one of the qualifying reasons (4) through (6), above, then the employer must only pay two-thirds the regular rate of pay.

Payment is capped at $511 per day or $5,111 in the aggregate if the employee is home due to any qualifying reason other than school closure or care for an ill family member under specific circumstances. Payment is capped at $200 per day or $2,000 in the aggregate if the employee is home caring for a family member with the virus or due to a child’s school closure.

Q. Does this law apply to health care providers?

No. Employers who are healthcare providers or emergency responders may elect to exclude employees from paid sick leave under this law.

Emergency Family & Medical Leave Expansion Act

If you are familiar with the federal Family and Medical Leave Act (FMLA), forget (almost) everything you know about the qualifying scope of coverage. Although previously FMLA only applied to employers with 50 or more employees, from the April 1 through December 31, 2020, all employers with less than 500 employees must comply with this act.  Eligible employees also include those who have worked for the company for 30 days (not the 12 months under the old FMLA rules). Employers who have 50 or fewer employees may seek exemption if complying with the Act would “jeopardize the viability of the business as a going concern.”

Q. What am I required to provide by way of extended paid leave?

You must provide leave under this new law for any employee who is unable to work (or telework) due to a need for leave to care for a child under 18 years of age if the school or childcare provider is unavailable due to a public health emergency (declared by a federal, state, or local authority).

Q. How much leave? 

You are required to provide up to twelve (12) weeks of leave for the time that the employee may be eligible.

Q. Is it paid or unpaid?

The first ten (10) days are unpaid, but the employee may be eligible for paid sick leave under the Emergency Paid Sick Leave Act discussed above, PTO, or other available paid leave provided under the employer’s policies. The remaining leave is paid at two-thirds the employee’s regular rate of pay, up to a total of $200 per day per employee and $10,000 per employee.

Q. Is this paid leave available to health care workers?

No. Healthcare providers and emergency responder employers may elect to exclude their employees from coverage under this law.

Q. Is this job-protected leave? Am I required to restore the employee back to his or her position or an equivalent position at the expiration of the leave?

Yes. However, for employers with less than 25 employees, there is no obligation to return an employee to the same or equivalent position at the expiration of the leave period under certain circumstances. For instance, if the position does not exist at the expiration of the leave because there are changes in operating conditions due to COVID-19, or if employers make a reasonable effort to restore the employee to an equivalent position within one year of the employee’s leave, a qualifying employer is not required to restore the employee to the same or equivalent position.

Employers are eligible for a payroll tax credit reflecting the value of any leave paid under the Paid Sick Leave or Emergency Family Leave laws. Employers will be reimbursed for 100% of the costs of providing this paid (both expanded FMLA and Paid Sick Leave) through quarterly payroll tax credits. If the costs paid for leave under the law exceed the employer’s tax obligations, employers will receive a refund from the government.

Employers will be required to notify employees of their rights under this new federal paid leave law. Within 7 days of enactment of the law, the Department of Labor will be creating a model notice for employers to post in the workplace (or under current telework circumstances, send electronically).

Bottom Line

The COVID-19 crisis is rapidly evolving and so too are changes to employment and workforce issues in ME and New Hampshire. Our team is monitoring these developments in real time and we’re here to support and assist you as needed. Please do not hesitate to reach out if we can be helpful to you.