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.

I am often asked to share my favorite resource materials and conferences involving the FMLA and ADA. Of course, my recommended resources aside from this very FMLA blog [get your priorities straight, people!].

Three — and really only three — immediately come to mind.

Let’s get the conversation started:

If You Just Want Key Materials on the FMLA

Every February, the American Bar Association’s Federal Labor Standards Legislation Committee publishes a comprehensive report of FMLA decisions handed down by the federal courts in the previous year.  Although our little FMLA blog catches a few of the big FMLA cases as they occur throughout the year, the ABA’s annual report includes all FMLA decisions from this past year.

This year’s report is as comprehensive as always — it summarizes 2019 FMLA decisions in a user-friendly manner and is a great reference for me throughout the year.

This year’s report, which was just released, can be accessed here (pdf). I encourage you to print it off and keep it by your side as a valuable FMLA resource.

If You Want the Conference AND the Materials

For 40 years, the National Employment Law Institute (NELI) has been the national leader in training professionals of all kinds on the ADA and FMLA (and in employment law generally). NELI’s two-day ADA and FMLA Compliance Update is an event you cannot miss.  Really, I cannot say enough about NELI — owners Sascha and Todd Miller put together the finest experts on ADA and FMLA who also are among the best presenters.  Simply put, NELI is the best of the best in hosting employment-related seminars for HR professionals and management side attorneys.

This year, the ADA & FMLA Compliance seminars are held in April in San Francisco (April 2-3), Washington, DC (April 16-17) and Chicago (April 23-24).  This year’s seminar information can be accessed on NELI’s website here or in its seminar brochure (pdf). (Mention my name and they’ll give you a discount.)

Not to scare you away, but I will be presenting on the FMLA at the Chicago session on April 24 (with one of my very first FMLA mentors, Ellen McLaughlin).  And I’m always excited to present along side David Fram, who (in my humble opinion) is the single best presenter on ADA issues in the history of the universe.

Don’t believe me? Come find out. You won’t be disappointed.

Just as important: NELI attendees also receive a binder of the very best substantive materials on key ADA and FMLA cases and guidance on nearly any issue you will encounter. There is no resource I keep closer to my side throughout the year.

If You Want to Spend Time with the Absolutely Brightest FMLA and ADA Nerds (and Outstanding People) on the Planet

Each springtime, the Disability Management Employer Coalition sponsors 3.5 days of FMLA and ADA goodness!  You leave there eating, drinking and sleeping these two very special laws, and let me tell you — that thought is enough to give me goosebumps year in and year out.

DMEC has put together another gem of a compliance conference this spring.  At this year’s conference, which will be held March 23-26 in Boston, I am delighted to co-present with one of my Littler colleagues and a friend, Alexis Knapp.  Alexis and I will in 90 minutes highlight the key FMLA and ADA cases over the previous year and offer our insight on how they will impact employers. Alexis is both funny and fun — can’t wait to get this show started!

As always, DMEC Chief Terri Rhodes and her awesome crew have put together a fabulous conference.  See this year’s program here and registration here.  Time is running out though — don’t delay.

See you later this month in Boston at DMEC.  And next month in Chicago at NELI.

A few weeks back, I celebrated my one-year anniversary at Littler. You know what that means, right?

I’m F-M-L-A eligible, baby!

Now that I am eligible to take job-protected leave [picture the heavens opening up and the sun shining down on my face], I’m salivating over all the so-called “reasons” I could use FMLA leave- perhaps a Mexican beach vacation, an overdue trip to spring training with my buddies, maybe even a little derriere augmentation.

Goodness, the possibilities quite literally are endless!

There are a ton of quirky rules regarding FMLA eligibility, and I cover some of them below so that you have a resource when these issues pop up. But first, humor me while I tell you about my first year at Littler.

Celebrating One Year at Littler

I’ve represented employers in employment law for over 20 years.  For many of these years, I’ve admired Littler and its attorneys who have been a wealth of knowledge and wisdom for me in the FMLA area -people like fellow FMLA nerds Dana Connell and Alexis Knapp.  So, one year ago, several colleagues (Dave Radelet, Chris Johlie, Staci Ketay Rotman, Terry Creamer) and I joined Littler, the world’s largest employment practice representing employers with 1500 employment attorneys in 80+ offices around the world.

What a change! Littler has indeed been a game-changer for me and my clients in many ways, but let me quickly identify two that stand out:

  1. The Leave and Accommodation team: I am part of a core group of 25 other Littler shareholders whose sole mission in life is to conquer FMLA, ADA and state leave law issues on behalf of employers. That core is part of a larger “Leave and Accommodation Practice Group,” which consists of nearly 250 Littler attorneys who ❤ leave and accommodations law as much as I do.  This group is headed up by Michelle Falconer and Casey Kurtz, and it’s a force to be reckoned with, especially with leave gurus Pam Salgado (Washington) and Deidra Nguyen (CA) and Stephanie Mills-Gallan answering every paid leave question I have.
  2. Deep Subject matter knowledge with cutting-edge (yet practical) counsel: No matter what the employment-related issue my clients throw at me, I can call on nationally known practitioners to help solve their problem. This benefit has been by far the most impressive. For instance, if my clients have an employee privacy issue or security breach, I ask Kwabena Appenteng to help; for sensitive wage/hours issues, I ping John Ybarra, Andrew Voss or Jennifer Schilling; for bet-the-company restrictive covenant work, I trust Jim Witz and Darren Mungerson; for benefits issues, I rely on Finn Pressly, who clients adore for his plain English explanation of benefits issues; for service animal accommodation questions, it’s Peter Petesch to the rescue; for tough drug testing or marijuana conundrums, I turn to Nancy Delogu for help; for ever-increasing transgender equity and pay equity audits, I can quickly call on Denise Visconti; for reductions-in-force, I rely on Kat Siegel and Emily Shoda to avoid disparate impact issues; when I need the perfectly-written brief for the win, I ask the “Chaucer” of brief writing, Todd Church; for implicit bias training that will knock clients socks off, I turn to Cindy-Ann Thomas, and when I need a role model on how best to treat clients and colleagues, I go no further than old friend Erin Webber.  I surely could go on and on, but I rest comfortably knowing that I am part of a firm that helps our clients navigate a complex business world with nuanced legal issues. My clients surely like this, too.

I am humbled that many of my FMLA Insights subscribers also are my clients.  I am so very grateful for your support and the chance to work with you.

But Jeff, Let’s Get Back to the FMLA

Enough of this love fest! Several of you asked extremely thoughtful questions about FMLA eligibility in conjunction with my first anniversary at Littler. [No you didn’t, I made this up.]

Let’s retrieve them from the mail bag and answer them below:

Q.  Did Littler ever change your status from temp to full-time employee? And did those temp hours count toward FMLA eligibility?

A. The firm would have been wise to hire me as a temp to kick the tires a bit. They didn’t, and now they’re stuck with me assuming they don’t find out about the spring training trip disguised as FMLA leave.

Never fear, I maintained full-time status since day one. However, even if I were a temp employee, the DOL has made clear that these hours count toward my FMLA eligibility. In fact, I covered this rather quirky concept in a previous blog post.

Q.  Assuming Littler is on a rolling FMLA year [ahem, that would be proprietary info, my friend], when would the firm check your FMLA eligibility for your Mexican beach vacation trip legitimate FMLA leave? 

A.  When it comes to checking eligibility, there are two key rules to follow:

    1. The employer must check eligibility at the first instance of FMLA leave for each different FMLA reason in a 12-month FMLA period.
    2. Once eligibility is established for a particular FMLA reason, eligibility for FMLA leave for that particular reason does not change for the remainder of the FMLA year.

But what if the FMLA leave starts as intermittent leave but then morphs into continuous leave? Or visa versa? Does this change in the way I take leave require Littler to re-check my FMLA eligibility?  In a word, no.  For example, let’s say I have a bad back. Once I became eligible for FMLA leave for my bad back in this FMLA leave (let’s say March 1, 2020), I remain eligible to take leave for my bad back for the remainder of the FMLA year (i.e., March 1, 2021). It doesn’t matter whether I need intermittent or continuous leave in the same FMLA year.

I cover this concept in detail in a previous post.  Check it out here.

Q.  If Littler asked you to practice for a time in one of its international offices, would you still be eligible to take FMLA leave?

A. Ah yes, thanks for the reminder! Have I mentioned that Littler is the largest employment practice in the world representing employers with attorneys licensed in all 50 states, offices in 35 out of the 50 states (as well as D.C. and Puerto Rico) and in approximately 20 countries around the globe?  We literally can assist clients anywhere and everywhere.

I digress. To answer your question, with the exception of Title VII, ADA and ADEA, employment laws do not apply to U.S. citizens working outside the country, even if they are working for an American company.  So, a U.S. national loses FMLA protection once that individual steps off U.S. soil and works for one work week in another country. But is the converse true? For instance, are foreign nationals on H-1B work visas eligible for FMLA leave? I’ve answered that one here.

Q.   Jeff, let’s assume you took a medical leave of absence before you reached the one-year mark that otherwise would have qualified as FMLA leave. Could Littler credit that pre-FMLA leave against your FMLA entitlement once you became eligible for FMLA leave?

A.  No. As the regulation makes clear, a leave of absence can only be designated as FMLA leave after the employee meets eligibility requirements.  This situation is covered even more explicitly in the preamble to the FMLA regulations, which I provide here.   In that portion of the preamble, the DOL states:

…any leave that employers voluntarily provide before an employee attains eligibility under the FMLA is not FMLA leave. Therefore, the FMLA protections do not apply to such leave, and employers may apply their normal policies to such leave. Employers may not, however, count any such non-FMLA leave toward the employee’s 12-week FMLA entitlement.

Q.  If Littler shipped you out to the great State of Wyoming to practice law, would you still be eligible to take FMLA?

A. Wyoming is indeed one of the few states without a Littler office, so I likely would not be eligible to take FMLA leave unless Littler employed 50 employees within 75 miles of my work location.  In this previous post, I explain why employers must decide whether they will include this 50/75 requirement in their FMLA policy. If they do not, they likely will not be able to argue later that these employees are ineligible for FMLA leave.

Q.  You tell us that you’ve worked for one year. But have you worked the requisite 1,250 hours in the past 12 months to be eligible for FMLA leave? We HR folks care about the technicalities, you know.

A.  Well, bless your little heart, HR professional! Keeping me on my toes, I see, and I like it. For the record, I worked 1,250 hours within the past 12 months.  Because I am an FLSA exempt employee, the FMLA regulations require Littler as my employer to establish that I had not worked the requisite 1,250 hours to deny eligibility for FMLA leave. See Section 110(c)(3) of the regs:

In the event an employer does not maintain an accurate record of hours worked by an employee, including for employees who are exempt from FLSA’s requirement that a record be kept of their hours worked, the employer has the burden of showing that the employee has not worked the requisite hours. An employer must be able to clearly demonstrate, for example, that full-time teachers of an elementary or secondary school system, or institution of higher education, or other educational establishment or institution (who often work outside the classroom or at their homes) did not work 1,250 hours during the previous 12 months in order to claim that the teachers are not eligible for FMLA leave.

Q.  The word on the FMLA circuit is that you’re planning to celebrate your one-year anniversary with a little derriere augmentation? Is this true? And if so, would it be covered by FMLA?

A. Oh, you guys! I mean, I definitely could use a little derriere augmentation, but it just ain’t my style. In any event, we know from a previous post that time off for cosmetic surgery is not covered unless it involves an overnight stay or complications develop. [If nothing else, click on the link above for one of my all-time favorite FMLA Insights blog photos!]

Q.  Jeff, I’m mean, you’re fine and all, but I really don’t care about your first anniversary. I just want to confirm that you’ll continue the blog. What say you?

A. I’m delighted that you care [only about my blog]. I am pleased to report that my FMLA Insights blog will continue and all its archives are available to you. The blog is not affiliated in any way with Littler, but I will remain the sole author. If you’ve not yet subscribed to this blog, you can do so on the right side of this page.

Thanks again for all your support! I ❤ my readers!

Employers are working overtime to determine how to respond to the Coronavirus outbreak, which has quickly turned into an international crisis. Employers rightfully are concerned about the safety of their employees and what they should be doing when one of their employees (or employees’ family members) have traveled through China.

Naturally, a number of my clients have asked me about how they should treat employees returning from China, whether they can force recent travelers to stay away from work, and whether this time away from work would be considered FMLA leave.

First, a quick plug on the absolute KEY resource for employers (besides the CDC web site itself) looking for guidance on how to create a plan for dealing with this outbreak. Bookmark this page: https://www.littler.com/coronavirus. It is a one-stop shop for employers as you’re determining what plans you need to put in place to stay ahead.

In the meantime, I hit these questions head on below:

What Should an Employer Do if It Suspects an Employee Was Exposed to the Coronavirus?

I couldn’t say it any better than my Littler colleagues Alka Ramchandani-Raj and Melissa Peters, who suggest the following approach in this informative alert about action steps for employers:

If an employee has traveled to China in the last 14 days and is exhibiting signs and symptoms of the virus (i.e., feels sick and exhibits symptoms such as fever, cough, or difficulty breathing) the employer should:

    • Advise the employee that they must not come to work until the symptoms disappear and/or a doctor has confirmed that they are not contagious.
    • Advise the employee to seek medical care right away.
    • Contact a medical and security service company so it can connect the employer with the right medical professionals to assist the employee.
    • Avoid contact with others.

If an employee becomes ill and/or the employer suspects the employee has been exposed to someone with the virus, there are several things that an employer can do:

    • Instruct the employee to work from home for up to 14 days to ensure the employee does not show symptoms of the virus.
    • Instruct the employee to obtain a fitness-for-duty/return-to-work notice from their physician.
    • Provide leave to employees until the incubation period is exhausted or they return with a fitness-for-duty notice.  These leaves of absence should be administered consistent with the employer’s normal leave of absence policies, and may be paid or unpaid.

If the employee has contracted the condition:

    • Contact the CDC and local health department immediately.
    • Contact a hazmat company to clean and disinfect the workplace.
    • Inform other employees of potential signs and symptoms and offer to allow employees to expense their medical test.
    • File any workers’ compensation claims necessary if the condition was contracted at work or in relation to a work-related activity (business travel).
    • Offer the employee the ability to work from home, or place the employee on administrative leave as necessary.  As noted above, the leave should be administered pursuant to normal company policies, and may be paid or unpaid.

Should an Employer Designate FMLA Leave When an Employee is Forced Off Work?

The FMLA provides job-protected leave for specific medical and family reasons. Specifically, employers must provide leave if the employee is incapacitated from working because of their own serious health condition or when they need to care for a family member with a serious health condition.

Clearly, employees with the coronavirus and employees with a child, spouse, or parent infected by the coronavirus are entitled to FMLA leave (if otherwise FMLA-eligible).

But what if the employee demonstrates no symptoms? As an initial matter, employers may be inclined to ask employees suspected of coronavirus exposure to work from home or take a leave of absence, and follow up with the appropriate FMLA notices and certification to be completed. No concerns here with this approach, as my colleagues explain more fully above.

If the employee demonstrates no symptoms of coronavirus, however, the employer should not count any of this leave against the employee’s FMLA allotment, as there is no evidence (yet) of a serious health condition rendering the employee unable to work. Ideally, these employees should work from home with your permission, as they likely are healthy enough to continue working.  Employees working from home should be instructed to “self-monitor” for symptoms of the virus, which include fever, coughing, shortness of breath or difficulty breathing. If symptoms develop, the employee should immediately inform the company and should not return to work prior to completing a return to work or fitness for duty evaluation with their physician.

In the meantime, keep these action items in mind when dealing real time with the current outbreak.