New Federal Law Mandates Paid Sick Leave & Enhanced Unemployment for Workers Affected by COVID-19 Pandemic
- 3/25 update, now effective 4/1/2020.
The Senate passed The Families First Coronavirus Response Act [H.R. 6201] in the afternoon of March 18, 2020, with a vote of 90-8, and President Donald Trump signed this into law. This Act created a federal paid sick leave requirement for coronavirus needs and expanded the Family and Medical Leave Act (FMLA) leave for purposes of childcare during a public health emergency.
Effective April 2, 2020, the new provisions are applicable to private employers with fewer than 500 employees (full-time and part-time), as well as some governmental employees. We can expect to see regulations from the DOL in this area, but most experts agree that the expansion for FMLA, for these express purposes, will be on a control-group basis, so very large employers, with more than 500 employees within the control group, will be exempt. Although, many are indicating that they expect to create and implement similar plans on a voluntary basis.
A. The Families First Coronavirus Response Act: Emergency Paid Sick Time
Up to two (2) weeks of Emergency Paid Sick Time (“EPST”) for various COVID-19 related events is available when an employee is unable to work (or telework) because:
- They are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- They are subject to a federal, state, or local government quarantine or isolation due to COVID-19.
- They have been told by a health care provider that he or she should self-quarantine due to experiencing symptoms of COVID-19.
- They are assisting an individual who is subject to a governmental quarantine or self-quarantine because of COVID-19.
- They are caring for a son or daughter if his/her school/childcare provider is unavailable because of COVID-19 considerations.
- They are experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
In the first three circumstances listed above, the employee would be eligible for their regular hourly rate of pay, with a maximum of $511 per day and the total shall not exceed $5,110. In circumstances four through six (4-6) listed above, the employee would be eligible for two-thirds of their regular hourly rate of pay, with a maximum of $200 per day and the total shall not exceed $2,000.
Part-time employees are also eligible for EPST and are paid at their regular rate of pay for the average number of hours per day that the employee was scheduled to work during a two-week period. For employees with fluctuating hours worked, the employer may use the average number of hours per day that the employee was scheduled to work (including hours for which the employee took any type of leave or paid time off) for the six-month period prior to the start date of requested EPST leave.
EPST must be made available immediately, regardless of how long the employee has been employed by the employer. In addition, employers are prohibited from requiring the employee to find a replacement coworker to cover their hours and are also prohibited from requiring employees to utilize existing paid time off in place of the EPST. All applicable EPST must be utilized prior to an employee using any other accrued paid time off provided by the employer.
If an employee has received at least one day paid sick leave related to COVID-19 prior to this act, an employer may require the employee to provide reasonable notice as to their health status to be able to use the EPST.
A model notice to provide employees will be available by the Labor Department on or around March 26, 2020.
B. The Families First Coronavirus Response Act: Emergency FMLA Expansion Act
The Family Medical Leave Act (FMLA) is amended to provide up to 12 workweeks of Public Health Emergency Leave (PHEL) for instances in which an employee is unable to work (or telework) due to the need for leave to care for a minor child (under the age of 18) of such employee if the school or place of care has been closed, or the child care provider is unavailable, due to a public health emergency.
While FMLA generally applies to employers with at least 50 employees, all employers with fewer than 500 employees must provide PHEL. Employers with fewer than 50 employees may be exempt if they can demonstrate that granting such leave would “jeopardize the viability of the business as a going concern.” Since President Trump issued a proclamation that the COVID-19 outbreak is a national emergency, all employees who have been actively working for at least 30 days (regardless of hours worked) are eligible for PHEL. (Standard FMLA-like tenure, hours worked, etc. do not apply in this limited capacity.)
The first ten (10) days for which an employee takes PHEL may be unpaid leave and employees may have the opportunity to substitute any accrued paid time off for unpaid leave. After the tenth (10th) day, the employer must provide paid leave in an amount that is not less than two-thirds of an employee’s regular rate of pay, for the number of hours the employee would otherwise regularly be scheduled. In all circumstances, the maximum paid leave per day is $200 and shall not exceed $10,000 in total.
Part-time employees are also eligible for PHEL and are paid at their regular rate of pay for the average number of hours per day that the employee was scheduled to work during a two-week period. For employees with fluctuating hours worked, the employer may use the average number of hours per day that the employee was scheduled to work (including hours for which the employee took any type of leave or paid time off) for the six-month period prior to the start date of requested PHEL leave.
The Families First Coronavirus Response Act: Key Points
- EPST and PHEL can start at any point in 2020 but cannot be used in 2021 and unused time/hours cannot be carried over into 2021.
- An employer cannot force employees to use other forms of leave concurrently with the new and additional leave provided by the act.
- Employers may not change any type of paid time off policies that would interfere with EPST or PHEL once the legislation is enacted.
- An employer may elect to exclude health care providers and emergency responders from the leave benefits.
- Non-Retaliation Provisions: the new law includes provisions that make it unlawful for any employer to discharge, discipline, or discriminate against any employee for taking leave under the Act.
- Exemptions: the law contains provisions that allow the DOL to exempt businesses with fewer than 50 employees if the imposition of leave requirements would jeopardize business viability.
- Employer Tax Credits: the law provides a refundable payroll tax credit to employers to cover 100% of the cost of wages.
- Cost-Free Coverage: group health plans subject to ERISA (including ACA-grandfathered health plans), shall provide coverage, and shall not impose any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorizations or other medical management requirements, for diagnostic testing for the detection of SARS-CoV-2 or the diagnosis of the virus that causes COVID-19, that are FDA approved. This includes in-person visits, telehealth (if available), urgent care center, and ER visits. See, E.g. Division F, Section 6001, on page 24 of 43.
Please contact your Account Manager or Account Executive for any questions about how these changes may affect your plans.
- The Families First Coronavirus Response Act
- DOL FMLA
- DOL – COVID-19 or other public health emergencies
- Next Steps – DOL Model Notice (added here on/after March 26, 2020)
- AssuredPartners COVID-19 resources for clients
- AP Benefit Advisors COVID-19 resources and tools
- 3/16 CMS FAQs on Essential Health Benefits and COVID-19
- 3/11 IRS HDHP-HSA Plans May Cover Coronavirus Costs as Preventive Care
- 2/28 Coronavirus – Keep Informed and Prepared, but Don’t Panic
For more information, contact email@example.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.
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