URGENT HR LAW COVID-19 UPDATE 03/19/2020
Vantaggio HR will be providing a series of regular HR updates to our valued clients and colleagues during these very uncertain times. We know that many of you have questions about the many changes in government policy and how they can affect the current state and future of your business and what that means for your employees. We’re here to help.
Today’s update will focus on the new federal Families First Coronavirus Response Act, signed into law by the President last night. Please note that the final version of the law differs in important areas from the version passed a few days ago by the House. There are a lot of articles on the web that may cause confusion.
While the bill provides for a number of relief actions, this update will focus on the 2 directly related to employers and employees:
- Emergency Family and Medical Leave Act – which provides for a new type of paid FMLA leave.
- Emergency Paid Sick Leave Act – which provides for a new type of paid sick days benefit.
Effective Dates – Both acts take effect on April 2, 2020 and remain in effect through December 31, 2020.
Employer Coverage – Both acts apply to all private businesses in the United States with fewer than 500 employees.
Exemptions – Both acts allow:
- Employers of employees who are healthcare providers or emergency responders to exclude such employees from coverage.
- The Secretary of Labor to issue regulations that would:
- Exclude certain healthcare providers or emergency responders from the definition of employees under the act
- Exempt small businesses with fewer than 50 employees if compliance would jeopardize the viability of the business.
Note that we have no further information at the current time about how such exemptions would be requested or approved.
Tax Credits – The cost for providing the benefits under these acts will be reimbursed to employers by the federal government through credits that the employer will receive against their Social Security and Medicare tax liabilities. Additionally, these reimbursements can be “grossed up” to include a share of the employees’ health insurance costs associated with the paid time off provided.
Note there is also a formula available for similar credits for certain self-employed individuals.
Notices – Both acts require the posting of notices that will be developed by the Department of Labor. With regards to other notices and certifications required under FMLA and other legally mandated paid sick leave, we have no further information at the current time.
Employee Protections – Both acts prohibit employers from disciplining, discharging, or discriminating against employees who exercise their rights to these benefits.
Emergency Family and Medical Leave Act
- Employee Eligibility – Applies to any employee working for a covered employer for at least 30 days (unlike “regular” FMLA leave which is available only to employees with 1250 hours and 12 months of prior service at a work location with 50 or more employees in a 75-mile radius).
- Reason to Take Leave – Employees who are unable to work or “telework” due to the need to care for a son or daughter under 18 years of age whose school is closed or whose childcare is unavailable as a result of a public health emergency. This is the only reason to take FMLA leave and does not cover individuals who are ill or are caring for others who ill due to COVID-19.
- Duration of Leave – up to 12 weeks.
- Pay During Leave:
- First 10 Days – are allowed to be unpaid. Employees may choose, but the employer may not require, use of existing paid time off such as vacation, sick, or PTO.
- Remainder of Leave – The employee must be paid by the employer:
- 2/3 of the employee’s regular wages
- Up to a maximum of $200 per day and an aggregate maximum of $10,000
- Part time employees – must be paid at FLSA regular rate of pay times the number of hours the employee would normally have been scheduled to work. Special rules apply for employees with varying schedules.
- Job Restoration – Similar to “regular” FMLA leaves, employees are entitled to be returned to the same or a “substantially similar” position. However, the bill does provide for relief from guaranteed job restoration for certain employers with fewer than 25 employees if specific conditions are met.
- Notice – Employees can be required to provide advance notice to the employer when practicable.
Emergency Paid Sick Leave Act
- Reason to Take Leave – Employees who are unable to work or “telework” due to one of the following reasons:
- 1- The employee is subject to quarantine due to COVID-19;
- 2- The employee has been advised by a healthcare provider to self quarantine due to COVID-19;
- 3- The employee is experiencing symptoms and is seeking medical care;
- 4- The employee is caring for an individual (that does not have to be a family member) who is experiencing either #1 or #2 above;
- 5- The employee is caring for a son or daughter whose school is closed or whose childcare is unavailable due to COVID-19;
- 6- The employee is experiencing other substantially similar conditions as specified by the Secretary of Health and Human Services
- Employee Eligibility– Applies to any employee working for a covered employer with no length of service requirement.
- Amount of Paid Time Off:
- Full Time Employees – 80 hours
- Part Time Employees – the average number of hours the employee works in a 2-week period. Special rules apply for employees with varying schedules.
- Benefits do not rollover or carry over and cease after the need for the leave goes away.
- Employees cannot be required to find coverage for their shifts if they are absent.
- Employers may not require the use of other paid time off such as sick, vacation, or PTO prior to using Emergency Paid Sick Days.
- While the prior version of the bill made it clear that the entitlement to these new Paid Sick Days was in addition to any other paid time off currently required by law or offered by the employer, the final bill remained silent on this issue. At Vantaggio, out of an abundance of caution, we are presuming that other paid time off could not be used to meet these new requirements.
- How Pay is Determined:
- If an employee takes time off for his/her own health situation under #1, #2, or #3 above, the employee is to be paid
- 100% of his/her regular wages
- Not to exceed $511 per day and an aggregate maximum of $5,110
- If an employee takes time off under #4, #5, or #6 above, the employee is to be paid
- 2/3 of his/her regular wages
- Not to exceed $200 per day and an aggregate maximum of $2,000
- No less than minimum wage at the employee’s location
These new laws will require a lot of internal administration and interpretation as we’re awaiting further guidance.
Please reach out to any of us at Vantaggio if you need help with getting quickly in compliance. We’re here to support you.