17 Mar Analysis of COVID-19 Emergency Congressional Legislation for Employers
Current Legislation (As it stands as of this writing on March 17, 2020)
The three most relevant sections are:
- “Division C – Emergency Family and Medical Leave Expansion Act”
- “Division E – Emergency Paid Sick Leave Act”
- “Division G – Tax Credits for Paid Sick and Paid Family Medical Leave”
Emergency Family and Medical Leave Expansion Act
Who is Covered: Emergency FMLA applies to government employers and companies with fewer than 500 employees — even ones with fewer than 50 employees (this is a significant change from regular FMLA. However, the Secretary of Labor may later exempt businesses with fewer than 50 employees when providing such leave might close the business altogether. Note: the exemption is not written into the law or regulations (no regulations exist yet), it could happen or it could not.
Which Employees are Eligible: Anyone who has been been working for at least 30 calendar days. Not sure if that means 30 consecutive days, but assume the broadest possible reading. Employees do not have to meet any other traditional FMLA minimums.
Leave entitlement: 12 weeks, just like any other kind of FMLA.
Reasons for taking emergency FMLA include: These are very broad descriptions.
- To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus;
- To care for an at-risk family member (defined at the link) who must quarantine due to exposure to or symptoms of coronavirus; and
- To care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a coronavirus.
It is unclear who the recommendation would have to come from. Certainly a health care provider would count, but it is unclear if a government order/recommendation would count.
Intermittent leave: Traditional FMLA allows for intermittent leave. But the language on this legislation has changed. But while intermittent leave might be technically available, I am not sure how often that case would come up.
Money Matters:
- The first 14 days of emergency FMLA leave are unpaid, except when the employee elects to run accrued PTO concurrently. (Unlike traditional FMLA leave, the employer may not require this.)
- After two weeks, employees get paid at least two-thirds of the employee’s usual pay.
Notice requirement: As much as is practicable.
Reinstatement rights: The default FMLA rules apply, except with employers that have fewer than 25 employees if certain conditions are met.
Effective date: 15 days after President Trump signs the bill.
Sunset: There is (I hope) a hard sunset at December 31, 2020.
Emergency Paid Sick Leave Act
So remember above when it says that the first two weeks of Emergency FMLA is unpaid, well this section is supposed to cover that.
Business coverage: Only government employers and companies with fewer than 500 employees.
Employee eligibility: All current employees, no matter how long they have worked at the company. Yes, it applies even that person you hired last week who normally wouldn’t be eligible for leave for 90 days.
Leave entitlement: 2 weeks of paid leave (80 hours for full-time, part-timers get reduced benefit based on their number of hours per week)
Reasons for paid sick leave: Again, this is in broad terms.
- To quarantine/self-isolate because of diagnosed coronavirus
- To treatment or preventative care for coronavirus symptoms
- To comply with a recommendation or order from government or health care provider that an employee shouldn’t be at work because of coronavirus factors
- To care for a family member for similar coronavirus-related reasons as outlined above
- To care for a child whose school has closed, or childcare provider is unavailable, due to coronavirus
Money Matters: If the employee takes leave for the first three reasons, then the gets their regular rate of pay. If an employee takes leave for reasons 4 or 5, then the employee gets paid at two-thirds the employee’s regular rate.
Current PTO Policy: THIS FEDERAL PAID SICK LEAVE IS IN ADDITION TO ANY PTO THE EMPLOYEE ALREADY HAS ACCRUED. If an employee has a week of PTO already accrued but unused, they would get to take three weeks of PTO. Like most emergency legislation, the authors have not said what the overlap between Emergency Paid Sick Leave and Emergency FMLA will look like (if anything).
Other Restrictions: To preempt some potential issues (as opposed to addressing the overlap), the legislation says:
- A company cannot change its own PTO rules after this goes into law.
- Further, an employer may not require the employee to identify a replacement employee to cover his or her shift while taking sick leave.
- DO NOT DISCRIMINATE (don’t even think about thinking about discriminating after you read this post).
- DO NOT FAIL to make this leave available—it will not end well for an employer who fails to do so.
Unused Leave: Use it or Lose It. No payout on termination of employment for unused Emergency Paid Sick Leave and no carryover to next year.
Call out rules: Yes, you can apply your currently existing rules related to call-outs. It is unclear whether you can still discipline an employee for no-call, no-show.
Notice: The Secretary of Labor is working on a poster. When he’s done, companies must post it in the workplace.
Effective date: 15 days after President Trump signs the bill.
Sunset: There is (I hope) a hard sunset at December 31, 2020.
Holy Cow! (or Other words) This Will Be EXPENSIVE
The new law provides a refundable tax credit equal to 100 percent of qualified paid sick and family leave wages an employer pays for each calendar quarter. There are even tax credits available for self-employed individuals too. How this will work in real life is still a mystery.
On Saturday Treasury Secretary Steven Mnuchin said (here) “The bill provides a dollar for dollar reimbursement for coronavirus related sick leave costs. To protect businesses concerned about cash flow, the Treasury will use its regulatory authority to advance funds to employers in a number of ways. Employers will be able to use cash deposited with the IRS to pay sick leave wages. Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”