Late yesterday, the Internal Revenue Service took a hard line on an employee’s need for emergency paid sick leave (EPSL) and emergency paid FMLA (FMLA+), taking the position that only one caretaker can take leave for a child whose school or childcare is closed.  Moreover, if the child is over 14 years old, the parent must explain the special circumstances requiring the employee to provide care.

This position is outlined in detailed FAQs highlighting the documentation employers can require to substantiate an employee’s need for EPSL and FMLA+. The IRS also detailed the documents that must be maintained to obtain tax credits for EPSL and FMLA+ payments.

Employee Request for Paid Leave

FAQ #44 of the IRS guidance is key — learn it, live it, love it.

The process for requesting EPSL or FMLA+ starts – as a leave request always does – with the employee. In its guidance, the IRS made clear that the employee must first submit a written request for leave that includes:

  1. The employee’s name;
  2. The date or dates for which leave is requested;
  3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
  4. A statement that the employee is unable to work, including by means of telework, for such reason.

If a Case of Quarantine, What Must the Employee Statement Provide?

In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include:

  1. The name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and,
  2. If the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.

If a Case a Child’s School or Child Care is Closed, What Must the Statement Provide?

In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include:

  1. The name and age of the child (or children) to be cared for,
  2. The name of the school that has closed or place of care that is unavailable, and
  3. A representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and,
  4. With respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

As highlighted in Nos. 3 and 4 directly above, the IRS takes the position that, if the employee wants to take EPSL and FMLA+, the employee alone must be providing care to the child, making clear that leave would otherwise be unavailable if both parents or another individual is present to care for the child.  Also, in the case of a 15- to 17-year old child, the employee must identify “special circumstances” requiring the employee to provide care. If the employee cannot do so, they cannot take EPSL or FMLA+.

What Additional Records Must an Employer Retain to Substantiate EPSL or FMLA+ and to Obtain the Tax Credit?

To establish that an employee legitimately took EPSL or FMLA+ and the right to a tax credit, employers must create and maintainiiup records that include the following information:

  1. Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
  2. Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages. See FAQ 31 (“Determining the Amount of Allocable Qualified Health Plan Expenses”) for methods to compute this allocation.
  3. Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
  4. Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).

How Long Should an Employer Maintain these Records?

The IRS confirms in its FAQs that an Employer should keep all records of employment taxes for at least four years after the date the tax becomes due or is paid, whichever comes later.  These should be available for IRS review.

Who wants Part III? Come on, you know you’ve been craving this all weekend.

More FAQs. 

It’s like winning a cake eating contest, and the prize is . . . more cake.

Late Saturday night, the Department of Labor issued a third round of Q&As (FAQs #38-59) aimed at helping employers administer emergency paid sick leave (EPSL) and paid FMLA leave (FMLA+) as part of the Families First Coronavirus Response Act (FFCRA) (pdf), which as of April 1, 2020 will provide relief to American workers in the wake of the coronavirus pandemic.

In this latest round of FAQs, DOL gave critical guidance that employers need to know, including the following:

  • Employers under 50 employees (which currently are not covered by the FMLA) are exempt from the FMLA+ and from one provision of EPSL, but not all of the provisions (FAQ # 58-59)
  • Employees can take no more than 12 weeks of FMLA, which includes any leave taken under FMLA+ (FAQ # 44).
  • BUT two Weeks of EPSL could be used in addition to the 12 weeks of FMLA+ (FAQ # 45).
  • Health Care Providers and Emergency Responders (and pretty much anyone who works with them) are excluded from protection under the EPSL and FMLA+ (FAQ #56-57)
  • Small Employers (24 or fewer Employees) Get Some Relief When it Comes to Restoration (FAQ #

Small Business Exemption Clarified—Employers with Fewer than 50 Employees May Be Exempt from FMLA+, and EPSL #5 (for School Closures/Childcare)—but NOT from other EPSL Reasons 1, 2, 3, 4 or 6 (FAQ #58-59)

For the first time, DOL gave smaller employers more clarity on how they would be exempt from the new law. As we noted in our Littler alert issued earlier today, DOL has clarified that small employers (those with fewer than 50 employees) – including religious or nonprofit organizations – may claim an exemption under FMLA+ and EPSL if the employer’s authorized officer determines one of the following applies:

  • Providing FMLA+ and EPSL reasons #5 leave (school closures and child care unavailability) would cause the business’s expenses and financial obligations to exceeding its revenues and cause the business to cease operating at a minimal capacity;
  • The employee’s absence would entail a substantial risk to the business’s financial health or operational capabilities because of specialized skills, knowledge of the business, or responsibilities, the employee possesses; or
  • There are insufficient workers who are able, willing, and qualified to perform the labor or services provided by the employee(s) requesting child-care leave, and these labor or services are needed for the business to operate at a minimal capacity.

VERY IMPORTANT CAVEAT: DOL indicates that school closures/child care reasons for FFCRA leave (which is reason #5 for EPSL leave and the only reason FMLA+ is available) are the ONLY reasons for which this exemption is available (if one of the above criteria are met).

Naturally, this means that smaller employers with fewer than 50 employees – even those who can claim this exemption – are NOT exempt from providing EPSL for reasons #1, 2, 3, 4 and 6 (i.e., the medical/family care related reasons for EPSL).

As if There was Any Doubt, an Employee Can Take No More Than 12 Weeks of FMLA (FAQ #44-45)

One of the remaining questions being tossed around since passage of FFCRA is whether the FMLA+ requires an additional 12 weeks on top of the 12 weeks already available under FMLA classic.

The DOL shut the door on any scuttlebutt that this new entitlement is anything more than 12 weeks MAX.  In a comment directly intended for American workers, here’s DOL’s take:

. . . your eligibility for expanded family and medical leave depends on how much leave you have already taken during the 12-month period that your employer uses for FMLA leave. You may take a total of 12 workweeks for FMLA or expanded family and medical leave reasons during a 12-month period. If you have taken some, but not all, 12 workweeks of your leave under FMLA during the current 12-month period determined by your employer, you may take the remaining portion of leave available. If you have already taken 12 workweeks of FMLA leave during this 12-month period, you may not take additional expanded family and medical leave.  (My emphasis)

For example, as the DOL points out, assume an employee took 2 weeks of FMLA classic leave in January 2020 to recover from a surgical procedure. Since FMLA+ is a type of FMLA leave, the DOL confirms that the employee “would be entitled to take up to 10 weeks of expanded family and medical leave, rather than 12 weeks.” And any leave taken under FMLA+ would count against the employee’s entitlement to the entire bucket of FMLA leave.

Note: Although the DOL didn’t specifically say it, we are working with the assumption that the 12-month FMLA period (aka the “FMLA year”) is the same 12-month period the employer has previously chosen and regularly maintained (e.g., rolling year, look forward year, calendar year, fixed year).

But EPSL Could Be Used to Lengthen the Overall Entitlement to 14 Weeks (FAQ #45)

In not so many words, the DOL points out in its latest FAQs that the two weeks of EPSL could be used in addition to the 12 weeks of FMLA+.  First, here’s what the DOL says, and then I will explain:

. . . you are entitled to paid sick leave under the Emergency Paid Sick Leave Act regardless of how much leave you have taken under the FMLA. Paid sick leave is not a form of FMLA leave and therefore does not count toward the 12 workweeks in the 12-month period cap. But please note that if you take paid sick leave concurrently with the first two weeks of expanded family and medical leave, which may otherwise be unpaid, then those two weeks do count towards the 12 workweeks in the 12-month period.

What the heck does this mean?

Under at least two scenarios, an employee might be able to use 14 weeks of FFCRA leave:

  1. First, an employee can use 80 hours (or the proportionate equivalent) of EPSL for non-child-care purposes (as allowed under EPSL). Assuming the employee has not used any FMLA leave (“classic” or “plus”) during the applicable FMLA 12-month period, the employee can then take up to 12 weeks of FMLA+ child-care leave.
  2. Second, during the initial unpaid 10-day period of FMLA+ leave (i.e., 2 weeks), the employee can use pre-existing non-FFCRA employer-provided benefits instead of EPST benefits (i.e., 2 weeks). The employee gets up to another 10 weeks of FMLA+ paid child-care leave (2 weeks + 10 weeks = 12 weeks). After that, assuming no EPST was used to date, the employee could use EPST child-care leave for an additional two weeks (2 weeks + 10 weeks + 2 weeks = 14 weeks). [H/T to my colleague Sebastian Chilco for clarifying this little nugget for me.]

EPSL and FMLA+ is in Addition to Any State or Local Leave the Employee Has Earned (FAQ #46)

We kinda knew this already, but DOL thought it worth mentioning – any leave under EPSL and FMLA+ is in addition to any other forms of sick/personal leave the employee has earned under the increasing number of state and local paid leave laws and ordinances. The new federal paid leave law does not touch or otherwise preempt these other leave entitlements, which means the employee’s actual leave entitlement could outstrip the 12 (or 14 weeks) allowed under EPSL and FMLA+.

Full-time and Part-Time Employees Now are Defined, which will Affect How Much You Pay Them (FAQ #48-49)

In its FAQs, the DOL clearly defined who is a full-time and who is a part-time employee under the EPSL.  Why is this important? Keep in mind that the EPSL states that full-time employees receive no more than 80 hours of pay for EPSL, and part-time employees receive the number of hours they normally work during a two-week period.

In its latest guidance, the DOL makes clear that an employee is “full” time if their employer normally schedules them to work 40 or more hours per week. An employee who is not “full” time is “part” time, and that employee receives a number of EPSL hours equivalent to the number of hours the employee works on average over a 2-week period.

DOL reminds employers that under FFCRA, FMLA+ “does not distinguish between full- and part-time employees, but the number of hours an employee normally works each week will affect the amount of pay the employee is eligible to receive.”

Health Care Providers/Emergency Responders are Excluded from Protection (FAQ #56-57)

In a nod to those who employ health care providers and emergency responders, the DOL made clear that employers can elect to exclude from coverage—which includes “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.” (emphasis added).

The definition also includes “any individual employed by an entity that contracts with any of the above institutions, employers, or entities institutions to provide services or to maintain the operation of the facility. This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. This also includes any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.”

To help minimize the spread of COVID-19, DOL encourages employers to be judicious when applying its new definitions for those who qualify as a “health care provider” or “emergency responder” for whom they are electing not to provide leave.

Small Employers (24 or fewer Employees) Get Some Relief When it Comes to Restoration (FAQ #43)

Taking the lead from the statute itself, DOL offers small employers (24 or fewer employees) a lifeline:  these employers can deny the employee’s return to the job so long as all four of the following hardship conditions exist:

  • the position no longer exists due to economic or operating conditions that affect employment and due to COVID-19 related reasons during the period of FMLA+ leave;
  • the employer can show it made reasonable efforts to restore the employee to the same or an equivalent position;
  • the employer makes reasonable efforts to contact this same employee if an equivalent position becomes available; and
  • the employer continues to make reasonable efforts to contact the employee for one year beginning either on the date the leave related to COVID-19 reasons concludes or the date 12 weeks after FMLA+ leave began, whichever is earlier.

Note: These employers also can deny restoration to an FMLA “key” employee (salaried employee who is among the highest paid 10% of all the employer’s employees within 75 miles of the employee’s worksite).

Dispute Resolution (FAQ #41-42)

To the agency’s credit, the DOL strongly encourages any employee who believes that the employer is improperly withholding paid sick or FMLA leave benefits to them to work out the differences first with their employer. This is not a tactic often recommended by a federal agency, which typically resorts to “come to us, and we’ll go hammer them for you . . .” [Well, not really, but kinda.]

Nevertheless, kudos to the DOL for attempting to bring some sensibility and calm to an otherwise frenetic time in which we live.

DOL Walks Back its Previous Guidance regarding Documentation of Qualifying Need for Leave

Finally, the DOL also took a red pen to some of its previous guidance.

Notably, the DOL eliminated much of its previous discussion regarding the specific types of documentation to support a leave request under EPSL and FMLA+, pointing employers instead to applicable IRS forms and information. However, the IRS has yet to publish guidance for employers on this issue.

For school closures and childcare-related need for leave, the DOL indicates that additional documentation may be required beyond what “conventional” FMLA allows—such as a notification of such school closure, etc. But all indications seem to suggest that for medically necessary reasons for COVID-19 (EPSL reasons #1, 2, 3, 4, and 6), employers may still request appropriate supporting documentation, although given current realities, employers may find they need to, as a practical matter, relax traditional documentation standards they might impose under normal circumstances. Additionally, the DOL now says employers need not provide leave if employees do not provide materials sufficient to support a tax credit.

What did I miss? I welcome your feedback.  In the meantime, let’s stay vigilant and stay safe, my friends.

Hat tip: Much of this post is taken from the collective work of several of my colleagues and me (Alexis Knapp, Jim Paretti, Sebastian Chilco and Mike Lotito) in a post we published today.

For the record, I’m not getting much sleep this week, thanks to the Department of Labor. But it’s evident the DOL isn’t getting much sleep either.

Late last evening, the DOL issued a second round of Q&As (FAQs #15-37) aimed at helping employers administer emergency paid sick leave (EPSL) and paid FMLA leave (FMLA+) as part of the Families First Coronavirus Response Act (pdf), which provides initial relief to American workers in the wake of the coronavirus pandemic.

The first Q&A issued on Tuesday, March 24 focused largely on employer coverage and pay calculations.

Last night, however, the DOL delved into even meatier issues.  In a nutshell, DOL generally confirmed the following:

  • Employees can be required to submit appropriate documentation to verify their need for EPSL and FMLA+. Documentation includes quarantine or isolation orders, doctor’s recommendations, or a notice of a school or place of care closure (FAQ # 16).
  • EPSL and FMLA+ generally must be taken in full-day increments (FAQ # 21).
  • EPSL and FMLA+ can only be used intermittently for child care reasons, and only then with employer consent (FAQs #20-22).
  • Shelter in Place and Business Closure Orders Likely Do Not Support the Need for Leave (FAQ #27).
  • Employees are not eligible for EPSL or FMLA+ during furloughs or temporary layoffs (FAQs #23-28).
  • Employees are not entitled to “top off” their FFCRA payments with accrued paid time off to get to 100% of pay unless the employer agrees (FAQ #31).
  • Employers cannot require employees to “top off” their FFCRA payments with accrued paid time off to get to 100% of pay unless the employee agrees (FAQs #32-33).

Let’s go through these nuggets one at a time:

Required Documentation (FAQ #16)

EPSL

For EPSL, the DOL advised that the employer must require the employee to provide “appropriate documentation” identifying the reason for requesting leave, a statement that the employee is unable to work (including telework) for that reason, and the date(s) for which leave is requested.

According to the DOL, appropriate documentation includes:

  • The source of any quarantine or isolation order and may include a copy of the Federal, State or local quarantine or isolation order related to COVID-19 applicable to the employee.
  • The name of the health care provider who has advised the employee to self-quarantine, including, for example, written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19.

EPSL and FMLA+

If an employee takes EPSL and/or FMLA+ to care for his or her child whose school or place of care is closed due to COVID-19, employees again must provide “appropriate documentation” in support of leave. Examples include:

  • A notice that has been posted on a government, school, or day care website, or published in a newspaper; or
  • An email from an employee or official of the school, place of care, or child care provider

Retaining the documentation: The DOL advises employers to retain the documentation if they intend to claim a tax credit under the FFCRA for the paid leave provided under EPSL or FMLA+.

Telework Still a Bit Murky (FAQs #17-18)

The DOL indicates that, on one hand, an employee can telework when the employer permits or allows the employee to perform work while he is at home or at a location other than the normal workplace. On the other hand, the agency also finds that an employee is unable to telework if the employer has work for the employee but the employee is unable to perform the work because of one of the COVID-19 reasons set forth in the EPSL or FMLA+ prevents the employee from being able to perform that work.

Left in the balance, however, is precisely who is responsible for deciding whether the employee can telework or not on any given occasion. The DOL appears to encourage this to be a joint decision between employee or employer.  As DOL puts it bluntly in FAQ #18:

If you and your employer agree that you will work your normal number of hours, but outside of your normally scheduled hours (for instance early in the morning or late at night), then you are able to work and leave is not necessary unless a COVID-19 qualifying reason prevents you from working that schedule.

Increments of Leave (FAQ #21)

As the default rule, DOL takes the position that EPSL and FMLA+ generally must be taken in full-day increments, and once the employee begins taking paid leave under EPSL or FMLA+, the employee must continue to take paid sick leave each day until the employee either: 1) uses the full amount of paid sick leave; or 2) no longer has a qualifying reason for taking EPSL or FMLA+. Notably, DOL’s motivation to insist on full-day increments is based on the intent of EPSL and FMLA+, which is to provide “such paid sick leave as necessary to keep [the employee] from spreading the virus to others.”

Intermittent Leave is Limited (FAQs # 20-22)

As highlighted in an article I drafted with my Littler colleagues earlier today, the DOL provides generally that employees and employers may agree to intermittent and incremental use of emergency paid sick leave (EPSL) and emergency paid Family and Medical Leave benefits (FMLA+), but then seems to divide the remaining guidance into two situations—whether the employee is teleworking, or working onsite.

For employees who are teleworking, whether taking time off under EPSL or FMLA+, employer and employee may agree to intermittent leave for any of the covered reasons.  But for employees who are working on the employer’s premisesintermittent EPSL is only permitted for employees who are taking leave for school closures or childcare unavailability (again, only if the employer agrees).  Employees taking EPSL for one of the other five reasons under the Act must take such leave in full-day increments (because the intent of the FFCRA is to prevent employees who may be ill or caring for those who are ill from possibly spreading the virus to other individuals in the workplace).

Shelter in Place and Business Closure Orders Likely Do Not Support the Need for Leave (FAQ #27)

Although it didn’t carve out a specific question for these types of orders, the DOL appears ready to deny EPSL to those covered by sweeping shelter in place and business closure orders being issued at the state and local levels.  See its commentary in FAQ #27:

If, prior to the FFCRA’s effective date, your employer sent you home and stops paying you because it does not have work for you to do, you will not get paid sick leave or expanded family and medical leave but you may be eligible for unemployment insurance benefits. This is true whether your employer closes your worksite for lack of business or because it is required to close pursuant to a Federal, State, or local directive.

Similarly, in FAQ #28, the DOL states:

If your employer reduces your work hours because it does not have work for you to perform, you may not use paid sick leave or expanded family and medical leave for the hours that you are no longer scheduled to work.

This language seems pretty clear in denying EPSL to those covered by shelter in place and business closure orders at the state and local level.

Paid Leave not Available for Furloughs and Temporary Layoffs (FAQs #23-28)

If an employee’s work site closes (whether the employer voluntarily closes or does so as a result of a state or local order), DOL now makes clear that employees cannot take leave under EPSL or FMLA+.

Period.

Simply put, EPSL or FMLA+ is not available to an employee on furlough, temporary layoff, reduced work hours, or who actually has been laid off. It does not matter whether: 1) the closure occurs before or after the law takes effect on April 1, 2020; 2) an employee is on leave when closure occurs; 3) an employer furloughs an employee; or 4) the work site temporarily closes and the employer says it will reopen in the future.

Case closed.  In these situations, the only pay available to the employee is unemployment compensation benefits.

“Topping Off” Paid Leave is Prohibited unless Both Sides Agree (FAQs #31-33)

One of the questions remaining after EPSL and FMLA+ were enacted was how an employee’s accrued paid leave through an employer’s policies would be treated along with EPSL and FMLA+.  The DOL put this question to bed.

Here are three key rules to keep in mind as confirmed by the DOL:

  • For the two weeks (up to 80 hours) of EPSL, the employee has the sole discretion to use EPSL or any accrued paid leave through the employer. The employer cannot dictate what leave is used during this period.
  • The employee cannot “top off” EPSL or FMLA+ with his or her own accrued paid leave (through an employer’s plan or policy) unless the employer specifically agrees.
  • Conversely, the employer cannot require that an employee “top off” EPSL or FMLA+ with his or her own accrued paid leave (through an employer’s plan or policy) unless the employee specifically agrees.

“Top off” in this context means that the employee would use 1/3 of a paid leave day to “top off” any leave that is provided at 2/3rds pay under EPSL or FMLA+ so that the employee would receive 100% of their regular salary.

A Word about Group Health Benefits

Finally, per DOL, an employee’s group health benefits must be maintained on the same terms for FMLA+ as if the employee had continued working.  Also, if an employee maintains family coverage, an employer must maintain this coverage, too.

For EPSL, health benefits also must be maintained. DOL further notes that employers “cannot establish an eligibility rule or set an individual’s premium or contribution rate based on whether the employee is actively at work unless an absence from work due to any health fact is treated as being actively at work for plan or health insurance coverage purposes.”

What’s Left to Be Answered? There still is much to be addressed by DOL. For starters:

  • It’s still not clear from yesterday’s guidance who gets to make the ultimate call on whether the employee can telework and what happens if/when the employee objects to telework.  We could use more guidance there.
  • What rules will DOL apply to exempt small businesses with fewer than 50 employees when the law’s requirements would jeopardize the viability of the business?
  • Will DOL give guidance to employers with fewer than 25 employees as to how they comply when they cannot return an employee to an equivalent position.

For now, though, with the DOL’s pronouncements about intermittent leave, furloughs, and topping off practices, employers will generally be pleased with this second round of FAQs.

Thanks to those who attended my webinar on Monday with my Littler colleagues Alexis Knapp and Jim Paretti on “Practical Issues for Employers in Navigating the New Federal Emergency Paid FMLA and Sick Leave Mandates.” A link to access the recording and PowerPoint slides can be found here.

To the nearly 14,000 people who registered for the webinar, thank you.  To those who missed it, you still have time to access the recording.

In particular, we covered key issues you need to be aware of as you begin to administer paid sick leave (EPSL) and paid FMLA (FMLA+). During the webinar, we addressed a host of issues, including the following:

  • When is this law effective? Ok, I acknowledge that this is the only issue we got wrong during the webinar.  Leading up to webinar, everyone and their brother were banking on the law taking effect on April 2, 2020, which was 15 days after the president signed the bill. As it turns out, DOL decided to make the law effective on April 1, 2020, as noted in the DOL guidance issued yesterday.  So we were off by one day, not bad.
  • How do employers calculate numbers of employees to determine whether they are covered by EPSL and FMLA+?  As we know from the law itself, the EPSL and FMLA+ apply to a private-sector employer with 499 or fewer employees.  During the webinar, we outlined how you should calculate, what employees you should include in the calculation, and how you address multiple, related entities under your corporate umbrella.  It is worth noting that we received guidance yesterday from the Department of Labor on these issues, which I analyzed yesterday.
  • Does a shelter in place or business closure order serve as a basis for an employee to take paid sick leave?  We explained our concerns about whether the new statute actually provides for leave in these situations. In fact, it’s pretty clear that the law doesn’t provide leave for individuals impacted by these orders. At the same time, we outlined how the DOL still may find a way to cover individuals in these situations, given that the “spirit” of the law may very cover these individuals.
  • May a terminated employee or furloughed employee receive paid leave under this new law? No, and likely no. Listen to the webinar for our reasoning why!
  • May an employee take EPSL and FMLA+ intermittently? Given the silence of the new law regarding intermittent leave, as well as the removal of language in earlier versions that required leave to be used at once, it appears as though the new law provides for intermittent and reduced schedule leave.
  • How do EPSL and FMLA+ interact with state/local leave laws?  In short, this new federal paid leave is in addition to state/local leave law.  We explain our rationale in the webinar.

We covered these critical issues and more.  Please access our recording here.

Other Resources for Employers during this Pandemic

At Littler, we have assembled over 100 attorneys who have spent every waking hour over the past several weeks advising employers on how they address very difficult workplace issues as a result of the coronavirus.  We encourage you to lean on us for assistance to do well by your employees and weather this storm.

Here are a few Littler resources I recommend you keep close by in the weeks and months ahead:

  1. Our Littler Coronavirus resource page, which contains employer FAQs on dealing with the pandemic, employer action items, specific guidance for dealing with the pandemic around the world (in the event you have international operations) and links to all our webinars and employer tools regarding the pandemic.
  2. Our compilation of all the orders requiring shelter at home and business closures
  3. How to properly handle furloughs as a response to the pandemic
  4. Wage and Hour Implications of Employer Responses to the Coronavirus
  5. Coronavirus (COVID-19) Employer FAQs
  6. Recording of my March 24, 2020 webinar on best practice for implementing the new federal paid sick leave and paid FMLA law

Late yesterday afternoon, the Department of Labor issued an initial question and answer guidance aimed at helping employers administer emergency paid sick leave (EPSL) and paid FMLA leave (FMLA+) as part of the Families First Coronavirus Response Act (pdf), which aims to provide initial relief to American workers in the wake of the coronavirus pandemic.  (We covered this new law in a webinar yesterday, the recording of which you can access here.)

Among the key questions answered in the DOL’s Q&A, the agency set the effective date of the new law, addressed which (and when) employees should be included in the calculation to determine employer coverage, and outlined how to calculate the employee’s regular rate of pay when providing EPSL and FMLA+.

Here are the highlights:

Effective date of the new law: Is this some April fools trick?  Although we all anticipated the new law to take effect on April 2, 2020 (i.e., 15 days after President Trump signed the legislation), the DOL set the effective date as April 1, 2020, which is 14 days after enactment.  Go figure, but we’ll get over it.

According to the statute, the law expires on December 31, 2020.

Employer Coverage:  As we know from the law itself, it applies to a private-sector employer with 499 or fewer employees. Perhaps the most notable (and helpful) portion of the guidance is information on how employers calculate whether they fall under that employee threshold.

When does the employer calculate?  The Q&A makes clear that an employer should calculate its total head count each time an employee’s leave is to be taken.  As difficult as this may be for employers to track, DOL was left precious little leeway by Congress on how best to determine employer coverage.  But it nevertheless presents the dilemma that an employer will dip above and below the 500-line at any given time.  Think about it: Johnny seeks leave on a Monday when the Company has 505 employees (he’s out of luck), but one week later, Susie requests leave at a time when the Company dips  to 499 employees (she’s in luck).  At a minimum, it surely will create some awkward situations.

Which employees should be counted?  The Q&A states that employers should count:

  • Full-time and part-time employees (no independent contractors are counted)
  • Only those employees within the United States (as the FMLA does not apply outside the United States and its territories)
  • Employees on leave
  • Temporary employees who are jointly employed by the employer and another company (regardless of whether the jointly-employed employees are maintained on only one employer’s payroll)
  • Day laborers supplied by a temporary agency (regardless of whether the employer or the temporary agency or the client firm if there is a continuing employment relationship).

Are related businesses aggregated to determine total head count?  Last night, several of my Littler colleagues and I published an analysis of this issue, which still is a bit amorphous even after the Q&A.  We see the DOL’s guidance this way:

The guidance states that typically, a corporation (including its separate establishments or divisions) will be considered a single employer and all of its employees must each be counted towards the employee threshold for that single corporation.  Where a corporation has an ownership interest in another corporation, the two corporations are still typically separate employers unless they are joint employers under the FLSA with respect to certain employees.  If two entities are found to be joint employers, all of their common employees must be counted in determining whether EPSL and FMLA+ leave must be provided.

In addition, the DOL’s Q&As adopt the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA) to determine whether two or more entities are separate, or combined, for FMLA+ purposes.  Those factors under the FMLA include common management, interrelation between operations, centralized control of labor relations, and degree of common ownership/controlSee 29 CFR 825.104(c)(2).  If two entities constitute an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of FMLA+ requirements.

Regular Rate Confirmed, Overtime must be Counted as Part of Pay

The Q&A makes clear that employers must pay an employee for hours the employee would have been normally scheduled to work.  However, the DOL confirmed what the law indicates  -that EPSL benefits are capped at 80 hours total over a two-week period.  The guidance also notes, by way of example, that an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and only30 hours of paid sick leave in the second week because of the 80-hour cap.

Notably, the DOL confirmed also that the payment made to the employee “does not need to include” a premium for overtime hours under either the EPSL or FMLA+.

Leave Given Prior to Effective Date of Law Cannot be Credited Later

As expected, the Q&A confirms that EPSL and FMLA+ benefits are effective beginning on the April 1 effective date.  As a result, any paid leave provided before April 1 will not count towards the new requirements and this gratuitous leave will not be eligible for the tax credits available under the law.

12 Weeks of Leave – Max!

In response to its question about how the EPSL and FMLA+ interact with each other, the DOL also confirmed that an employee “may be eligible for both types of leave, but only for a total of twelve weeks of paid leave.”  (My emphasis)  This clears up any ambiguity as to whether an employee might somehow take more than 12 weeks of leave between EPSL and FMLA+.

After passage last week of the Emergency paid sick leave and paid FMLA law, employers have been clamoring for guidance on the timing of reimbursement by the federal government for any paid leave they provide their employees after the law goes into effect on April 2, 2020. In fact, many employers have had to make difficult furlough and termination decisions worried about whether they would even have the cash flow to cover any paid leave mandates while waiting months, even a year, before the feds reimburse them.

Late Friday, the Internal Revenue Service and Department of Labor issued an announcement on this very critical question.  In the announcement, the DOL also made it clear it would not bring an enforcement action against employers for any violations within the first 30 days the law is in effect so long as the employer is acting in good faith to comply.

Here is my analysis of this latest information (and keep in mind we will cover these issues in greater detail during our Tuesday webinar):

IRS Guidance on Reimbursement of Paid Leave Provided by Employers

As you likely are aware by now, the new law provides employees (at employers with fewer than 500 employees) paid sick leave and paid FMLA leave for COVID-19 related reasons but also made clear that this paid leave would be 100% refundable to employers providing it.  (I explain these requirements in detail here.)

As written, the law simply was not realistic or workable as to employer tax credits, since the employer would be reimbursed at some later date — some weeks, months or even a year later — after the coronavirus damage had already been done.

In Friday’s guidance, however, the IRS made clear that employers would be able to recoup these payments immediately by keeping a portion of the deposit it otherwise would pay as part of their employees’ federal, social security and Medicare taxes.

This is welcome news.  

Here’s how the IRS explains how you will recoup this money immediately:

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

What does this mean?  In a nutshell, it means that any taxes held in escrow for payment on federal, social security and Medicare taxes now could be used to pay employees taking paid leave under the law effective April 2.  Notably, this would allow employers to draw funds from the payroll and income tax they withhold from or pay on behalf of all employees and not just those to whom they must provide paid leave under the new statute.

Examples of How You’ll Be Reimbursed Immediately

In its announcement, the IRS gave examples of its guidance above:

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Meanwhile, the DOL Will Not Bust You for Non-Compliance — Well, for At least Not for 30 Days

Although the details presumably will be announced this  week or the next, the DOL clarified in the same announcement that it would be “issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.”

What does “good faith” mean?  DOL says this:

For purposes of this non-enforcement position, “good faith” exists when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the Department receives a written commitment from the employer to comply with the Act in the future.

Well, a small sigh of relief.  And some hope we can cling to for now…

For guidance on these above issues and more, please sign up for our complimentary webinar on the new paid sick leave and paid FMLA leave law this Tuesday, March 24, 2020.

When:  This Tuesday, March 24, 2020 (11:00 a.m. to 12:30 p.m. central time)

Online registration: Click here

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act, which aims to provide initial relief to American workers of certain covered employers in the wake of the coronavirus pandemic.  This new law requires covered employers to provide emergency paid leave in the form of a new mandatory paid sick leave benefit, and expanded, paid leave under the FMLA.

Targeted for an effective date of April 2, 2020, this new law raises just as many questions as answers.  In a 90-minute, complimentary webinar, I will analyze the new paid sick leave and FMLA provisions with two of my Littler colleagues Alexis Knapp and Jim Paretti.  Together, we will provide as much practical counsel as we can to employers navigating the requirements of this law.

Editorial comment: These two colleagues of mine are fabulous — Alexis eats, sleeps and breathes FMLA, and Jim has deep insight into the politics behind why this law ended up the way it did and the additional legislative changes we might expect in the future.  [And me, I’m just along for the ride . . . ]

Alexis, Jim and I will address questions such as:

  • The new law covers private employers fewer than 500 employees.  How is that number calculated and how are multiple, related companies treated when determining employer coverage?
  • How are the exclusion and opt-out provisions for certain types of employers and certain size employers going to work?
  • If an employee is terminated before the effective date of the law, is the employer still required to provide paid sick or FMLA leave?
  • How do the new FMLA and sick leave requirements combine with existing leave under Company policy or state/local law, and/or the amount of FMLA leave already taken?
  • What are the reasons for leave and how does an employer manage the overlap between paid sick leave and paid FMLA leave?
  • If employers provide paid leave before the April 2 effective date, is this time credited against any entitlement once the law is effective?
  • Is the paid leave an employer provides an employees reimbursed by the federal government?  How is an employer reimbursed and what is the anticipated time line for payment?
  • Can paid sick and paid FMLA leave be used intermittently or must it taken in a continuous period of time?

Email me at jnowak@littler.com with any questions you want us to cover during the webinar.

Yesterday, President Trump signed into law the Families First Coronavirus Response Act (pdf), which aims to provide initial relief to American workers in the wake of the coronavirus pandemic.  This new law requires certain employers to provide emergency paid leave under the Family and Medical Leave Act and emergency paid sick leave.

I outline the key paid FMLA and paid sick leave provisions below:

EMERGENCY FAMILY AND MEDICAL LEAVE ACT

Effective date: Effective April 2, 2020; the law expires on December 31, 2020

Covered Employer: An employer with fewer than 500 employees.  According to the New York Times, this will leave about 59 million workers excluded from coverage.  It’s unclear why this seemingly arbitrary number was used to determine employer coverage, though it appears to be a compromise to ensure the bill’s passage.

The law is silent on how the 500 employee threshold is calculated. At this point, however, it is reasonable to believe the Department of Labor would borrow the integrated employer test used from the FLSA  and/or FMLA.

Public agencies (of any size) also are covered, as they have been under the original FMLA.

Eligible Employee: Any full-time or part-time employee that has been on the employer’s payroll for 30 calendar days.

However, the law allows employers to exclude employees who are health care providers or emergency responders from this emergency FMLA entitlement.

Reasons for FMLA Leave: Eligible employees are entitled to take up to 12 weeks of FMLA leave for “a qualifying need related to a public health emergency.” This “qualifying need” is limited to circumstances where an employee is unable to work (or telework) to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency.

How Much Pay is Required during FMLA Leave?

  • The first 10 days (two weeks) are unpaid, but an employee can substitute accrued paid leave, including emergency paid sick leave (which I detail below). It is unclear whether an employer can require the employee to use accrued paid leave during the 10-day period. The law is silent on this latter issue, though it cites back to a provision of the FMLA that allows the employer to require the use of accrued paid leave.
  • The remaining 10 weeks are paid at 2/3 of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work (with a maximum payment of $200 per day and $10,000 total)

Small Employers Can’t Be Sued: The law exempts employers with fewer than 50 employees from civil FMLA damages in an FMLA lawsuit, thereby shielding smaller employers from being liable for back pay or liquidated damages.

Restoration to Position after Leave Ends: Emergency FMLA leave is job-protected, meaning the employer must restore an employee to the same or equivalent position upon their return to work.  However, the new law includes an exception to this requirement for employers with fewer than 25 employees, if the employee’s position no longer exists following leave due to operational changes occasioned by a public health emergency (e.g., a dramatic downturn in business caused by the COVID-19 pandemic), subject to certain conditions.

Notably, if the small employer does not return the employee because of operational changes, the employer must make reasonable efforts to contact a displaced employee for up to one year after they are displaced if an equivalent position becomes available.

Tax credits: The new law provides for a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA, including tax relief for self-employed individuals.  Specifically, the bill as passed by the House provides for:

  • A refundable tax credit for employers equal to 100 percent of qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act that are paid by an employer for each calendar quarter.  The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes).  The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.
  • A refundable tax credit equal to 100 percent of a qualified family leave equivalent amount for eligible self-employed individuals. The credit is allowed against income taxes and is refundable. Eligible self-employed individuals are individuals who would be entitled to receive paid leave pursuant to the Emergency Family and Medical Leave Expansion Act if the individual was the employee of an employer (i.e., not self-employed). The qualified family leave equivalent amount is capped at the lesser $200 per day or the average daily self-employment income for the taxable year per day.

* * *

EMERGENCY PAID SICK LEAVE ACT

Effective date: Effective April 2, 2020; the law expires on December 31, 2020

Covered Employer is any of the following:

  1. A private employer with fewer than 500 employees
  2. A public agency (federal/state governments, political subdivisions, schools)
  3. Any other entity that is not a private entity [What the heck does this mean? Likely means quasi-governmental agencies, like public transportation systems and the like, though the law does not specify and the current FMLA does not define this term.]
  4. Anyone acting directly or indirectly in the interests of the employer [Does this mean that a manager could be liable for violations of sick leave provisions? Ugh.]

Eligible Employee: Unlike the emergency FMLA requirements, an employee is immediately eligible for paid sick leave (there is no 30 calendar day requirement)

Reasons for Sick Leave: Employers are required to provide paid sick leave to an employee who is unable to work or telework 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 because of COVID-19;
  3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  4. the employee is caring for an individual subject or advised to quarantine or isolation;
  5. the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
  6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

How Much Paid Leave is Required?  Employees are entitled to the following:

  • Full-time employees: 80 hours at their regular rate of pay.  However, when caring for a family member (for reasons 4, 5, and 6 above), sick leave is paid at two-thirds the employee’s regular rate.
  • Part-time employees: the number of hours that the employee works, on average, over a 2-week period (also two-thirds pay for reasons 4, 5, and 6)

The law limits paid leave to $511 per day ($5,110 in total) where leave is taken for reasons (1), (2), and (3) noted above (generally, an employee’s own illness or quarantine); and $200 per day ($2,000 in total) where leave is taken for reasons (4), (5), or (6) (care for others or school closures).

Sequence of and Rules for Leave: The new law requires that the employer allow the employee to first use sick leave provided for under this sick leave law, then decide to use any remaining accrued paid leave under an employer’s policy.  The employer cannot require the employee to use accrued leave under an employer policy first.

The House bill also ensures that employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are provided with leave.

No Good Deed Goes Unpunished: Any paid leave generously provided by an employer before the law is effective cannot be credited against the employee’s paid leave entitlement. However, hours cannot be carried over after December 31, 2020 (when the legislation sunsets).

Based on the language of the bill, an employee an employee’s right to take paid sick leave ends after they return from their leave.  The wording of this paragraph, however, raises some question as to whether they would be able to use any remaining sick leave in the future once they have returned from leave.

Retaliation

As with other similar laws, the new act includes anti-retaliation protections, and provides for penalties for failure to pay wages.

Tax CreditsAs above with the emergency FMLA, the new paid sick leave law offers employers to be reimbursed for sick leave:

  • A refundable tax credit for employers equal to 100 percent of qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act that are paid by an employer for each calendar quarter.  The tax credit is allowed against the tax imposed by section 3111(a) of the Internal Revenue Code (the employer portion of Social Security taxes).
  • A refundable tax credit for self-employed individuals equal to 100 percent of a qualified sick leave equivalent amount for eligible self-employed individuals who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to coronavirus.  For eligible self-employed individuals caring for a family member or for a child whose school or place of care has been closed due to coronavirus, the section provides a refundable tax credit equal to 67 percent of a qualified sick leave equivalent amount.

Let’s all take one big, collective deep breath.  And let’s all be very confident — we will get through this ordeal TOGETHER.

Just three days ago, the U.S. House of Representatives passed sweeping legislation providing employees FMLA and paid sick leave in response to the coronavirus (COVID-19).

Before the ink of that legislation dried, however, the House late last night made a number of so-called “corrections” to the original legislation that considerably modifies key aspects of the law before sending the bill onto the U.S. Senate, presumably this morning.

As much as I have been knee-deep in this legislation over the past few days, my Littler colleagues Mike LotitoJim Paretti, Stephanie Mills-Gallan and Sebastian Chilco haven’t slept as they’ve analyzed these changes for our benefit.  I borrow heavily from their newly-released analysis of the House’s amendments in outlining the key changes passed by the House (pdf):

EMERGENCY FAMILY AND MEDICAL LEAVE ACT

Reasons for FMLA Leave: Under the original bill, an employer must provide up to 12 weeks of FMLA leave to an eligible employee for “a qualifying need related to a public health emergency.”  This “qualifying need” is limited now to instances where an employee is unable to work or telework due to the need to care for a child if the child’s school or place of child care has been closed or the child care provider is unavailable, due to a public health emergency.

First 14 days of FMLA Leave: Remember when I told you that the original bill provided for an initial 14 days of unpaid leave?  In the amended bill, this number is reduced to 10 days.  As before, employees have the option of using their accrued paid leave for this initial period.

After the first 14 days: In a sharp departure from the original legislation, the remaining FMLA leave must be paid at two-thirds of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work.  Notably, the amended legislation also (for the first time) limits the amount of required pay for leave to no more than $200 per day and $10,000 total.

Small Employers Can’t Be Sued: In a matter of one line, the amended legislation appears to exempt employers with fewer than 50 employees in a 75-mile radius from civil FMLA damages in an FMLA lawsuit. Go figure.

EMERGENCY PAID SICK LEAVE ACT

Reasons for Sick Leave

Under the amended version, employers now would be required to provide paid sick leave to an employee who is unable to work or telework 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 because of COVID-19;
  3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  4. the employee is caring for an individual subject or advised to quarantine or isolation;
  5. the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
  6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Designation of paid sick leave: Notably, the revised bill seems to have removed the language in the bill that originally passed that emergency paid sick is in addition to any other paid sick leave provided by the employer on the day before the enactment of the Act (and employers are prohibited from modifying sick leave policies to avoid this requirement). While the amended version still indicates that emergency paid sick is in addition to normal PTO, paid sick, and vacation benefits, it is now silent as to whether any emergency paid sick leave voluntarily provided by an employer before the effective date of the law may count towards satisfaction of any federal employer mandate.

Health care providers and Emergency Responders need not apply:  Notably, the House’s amended legislation allows an employer to deny health care providers and emergency responders sick leave, and direct the Department of Labor to issue regulations to exclude certain health care providers and emergency responders from the definition of employee

Amount of Pay Adjusted: The amendment would limit paid leave to $511 per day ($5,110 in total) where leave is taken for reasons 1, 2 and 3 above (dealing with an employee’s illness or quarantine); and $200 per day ($2,000 in total) where leave is taken for reasons 4, 5 or 6 (caring for others or school closures).

More questions than answers at this point?

As I mentioned in my last post, keep in mind this is simply the House version of the bill.  Based on the latest reports, the Senate may not take up this bill in earnest till later this week.

In the wee hours of the morning yesterday, the U.S. House of Representatives passed legislation designed to give American workers a safety net in response to the spread of the coronavirus (COVID-19) across the United States. Labeled the Families First Coronavirus Response Act (pdf) and covering a wide range of relief for Americans, the legislation provides nearly all American workers up to 12 weeks of FMLA leave and two weeks of paid sick leave for certain reasons related to the coronavirus.

Keep in mind this is simply the House version of the bill.  The U.S. Senate is expected to take up this bill as early as Monday, and it’s possible – indeed, even likely – that the final version will look different than what I outline below.

With respect to paid leave, there are TWO components of the legislation:  1) The Emergency Family and Medical Leave Expansion Act; and 2) The Emergency Paid Sick Leave Act.

I address each below:

EMERGENCY FAMILY AND MEDICAL LEAVE ACT

Effective date: No later than 15 days after the law is enacted; sunsets on December 31, 2020

Covered Employer: An employer with fewer than 500 employees.  [You read that right. As of now, this legislation does not apply to any employer 500 or above.  If anyone knows why it was drafted in this matter, I am all ears.]

The bill gives the DOL the authority to issue regulations to exempt small businesses with fewer than 50 employees when the law’s requirements would jeopardize the viability of the business.

Eligible Employee: Any full-time or part-time employee that has been on the employer’s payroll for 30 days. This is a significant departure from the FMLA’s usual requirement that the employee work for the employer for 12 months and 1,250 hours in the 12 months prior to taking leave.

Reasons for FMLA leave: An eligible employee can take emergency FMLA leave for the following reasons:

  • To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus.
  • To care for a family member whose presence in the community would jeopardize the health of other individuals because of the exposure of such family member to coronavirus or exhibition of symptoms of coronavirus by such family member
  • 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

What Portion is Paid Leave?

First 14 days

The first 14 days of leave may be unpaid, but an employee can choose to substitute accrued vacation leave, personal leave, or other medical or sick leave during the leave.  The employer cannot force an employee to use their accrued paid leave.

After the first 14 days 

After 14 days of unpaid leave, employers must pay FMLA leave (only for the reasons above) at no less than two-thirds the employee’s regular rate of pay for the number of hours the employee would have been normally scheduled.

Definition of “Family Member” is Broadened only for this Reason

The legislation would broaden the definition of “parent” and “family member” as described below:

  • Parent: a biological, foster or adoptive parent; stepparent; parent-in-law; parent of a domestic partner; or legal guardian or other person who stood in loco parentis when the employee was a child
  • Family member: an individual who is a pregnant woman, senior citizen, individual with a disability, or has access or functional needs and who is a son or daughter of the employee, a next of kin of the employee for whom the employee is next of kin; or a grandparent or grandchild of the employee

Restoration to Position

As with traditional FMLA leave, this leave is job-protected, meaning an employer must return the employee to the same or equivalent position upon their return to work.  Notably, there is an exception to this requirement for employers with fewer than 25 employees if the employee’s position does not exist after FMLA leave due to an economic downturn or other operating conditions that affect employment caused by a public health emergency during the period of leave (subject to certain conditions, including reasonable attempts to return the employee to an equivalent position, and required efforts to contact a displaced employee for up to a year after they are displaced).

EMERGENCY PAID SICK LEAVE ACT

This portion of the legislation requires employers with fewer than 500 employees to provide employees with two weeks of paid sick leave, paid at the employee’s regular rate, to quarantine or seek a diagnosis or preventive care for coronavirus.

It’s an interesting add on to the bill, as the legislation only refers to calculating pay during the post-14 period.  Here is the summary:

Reasons for Sick Leave: An employee may take sick for the following reasons:

  • Self-isolate because the employee is diagnosed with COVID-19
  • Obtain a medical diagnosis or care if the employee is experiencing the symptoms of COVID-19
  • Comply with a public official or a health care provider order or recommendation that the physical presence of the employee on the job would jeopardize the health of others due to COVID-19 exposure
  • Care for the employee’s family member who is self-isolating because the family member has been diagnosed with or is experiencing symptoms of COVID-19 and/or needs to obtain medical diagnosis or care
  • Care for a family member if a public official or a health care provider determines that the presence of the family member in the community would jeopardize the health of others due to COVID-19 exposure
  • Care for the child of such employee if the school or child care has been closed due to COVID-19

What is Paid?

Employees are entitled to the following:

  • Full-time employees: 80 hours at their regular rate of pay.  However, when caring for a family member, sick leave is paid at two-thirds the employee’s regular rate.
  • Part-time employees: the number of hours that the employee works, on average, over a 2-week period

Any paid leave provided before the law is enacted cannot be credited against the employee’s paid leave entitlement.  However, hours cannot be carried over after December 31, 2020 (when the legislation sunsets), and based on the language of the bill, an employee’s right to take paid sick leave ends after they return from their leave.

The House bill also ensures that employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are provided with leave.

Retaliation 

The bill includes anti-retaliation protections, and provides for penalties for failure to pay minimum wages.

Tax Credits for Emergency Paid Sick Leave and Family and Medical Leave

As noted by my Littler colleagues Mike Lotito, Jim Paretti and Sebastian Chilco in this detailed overview of the legislation, the portion of the bill provides for a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA, including tax relief for self-employed individuals.  Specifically, the bill as passed by the House provides for:

  • A refundable tax credit for employers equal to 100 percent of qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act that are paid by an employer for each calendar quarter.  The tax credit is allowed against the tax imposed by section 3111(a) of the Internal Revenue Code (the employer portion of Social Security taxes).
  • A refundable tax credit for self-employed individuals equal to 100 percent of a qualified sick leave equivalent amount for eligible self-employed individuals who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to coronavirus.  For eligible self-employed individuals caring for a family member or for a child whose school or place of care has been closed due to coronavirus, the section provides a refundable tax credit equal to 67 percent of a qualified sick leave equivalent amount.
  • A refundable tax credit for employers equal to 100 percent of qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act that are paid by an employer for each calendar quarter.  The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes).  The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.
  • A refundable tax credit equal to 100 percent of a qualified family leave equivalent amount for eligible self-employed individuals. The credit is allowed against income taxes and is refundable. Eligible self-employed individuals are individuals who would be entitled to receive paid leave pursuant to the Emergency Family and Medical Leave Expansion Act if the individual was the employee of an employer (i.e., not self-employed). The qualified family leave equivalent amount is capped at the lesser $200 per day or the average daily self-employment income for the taxable year per day.

Onto the Senate.  More details to follow after a likely vote early next week.