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March 20 2020

Client Alert: Federal Paid Leave and the Families First Coronavirus Response Act

By: Nikole L. Canute and Regina M. Gilmour

Late Wednesday, President Trump signed into law a heavily revised version of HR Bill 6201, entitled the “Families First Coronavirus Response Act” (the “Act”).  The original version of HR Bill 6201 was addressed in our previous Client Alert.  Although the Act has numerous provisions meant to address challenges related to the outbreak of the coronavirus (COVID-19), the provisions creating the Emergency Family and Medical Leave Expansion Act (the “FMLA Expansion Act”) and the Emergency Paid Sick Leave Act (the “EPSLA”) are the most relevant to employers.  The Act states that it will be effective no later than 15 days from the date of enactment, which would be April 2nd.  Department of Labor guidance released on March 24th states that the paid leaves are available as of April 1st.

FMLA Expansion Act

The FMLA Expansion Act will apply to private employers with fewer than 500 employees and to all public employers. Eligible employees are defined as those who have been employed for more than thirty (30) days and who have a qualifying need for “Public Health Emergency Leave” (“PHEL”) as defined by the FMLA Expansion Act.  A qualifying need for PHEL is defined as:

  • Caring for a child under the age of 18 whose school (K-12) or childcare was closed because of the public health emergency

Under the FMLA Expansion Act, the first ten (10) days of PHEL are unpaid; however, an employee may elect to use accrued paid leave instead of unpaid leave.  However, unlike under other FMLA leaves, an employer may not force an employee to use accrued leave.  After ten (10) days, the employer must provide pay for each additional day of qualifying PHEL.  Payment of applicable leave must be at least two-thirds (2/3) of the employee’s regular rate of pay multiplied by the number of hours the employee would otherwise be scheduled to work.  However, payment is capped at a total of $200 per day or $10,000 in the aggregate.  Employees may take up to twelve (12) weeks of qualifying PHEL.

Importantly, employers should note that, because the qualifying needs for existing FMLA and for the new PHEL category of FMLA leave differ, employees may be able to take advantage of the provisions of both acts, depending on their qualifying need.  Employers with fewer than fifty (50) employees are required to comply only with the PHEL category of FMLA leave created by the FMLA Expansion Act.  These employers may apply to the Secretary of Labor for an exemption to the FMLA Expansion Act, if the imposition of leave under that Act would “jeopardize the viability of the business as a going concern.” 

Emergency Paid Sick Leave Act (EPSLA)

The EPSLA applies to private employers with fewer than 500 employees and to all public employers, and will provide all employees, including new hires, with additional paid sick leave for the following reasons:

  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 due to concerns related to COVID-19
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
  4. The employee is caring for someone who is subject to an order as described in (1) or has been advised as described in (2)
  5. The employee is caring for a child if the school or place of care has been closed
  6. The employee is experiencing any other substantially similar conditions specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor

If the employee meets any of the aforementioned criteria, the employer, in addition to any other applicable paid leave, must grant full-time employees eighty (80) hours of paid leave and must grant part-time employees paid leave for the number of hours that the employee works on average during a two-week period.  If the employee is seeking leave for qualifying needs 1, 2, or 3, the employee’s compensation is capped at $511 per day or $5,111 total.  If the employee is seeking leave for qualifying needs 4, 5, or 6, the employee’s compensation shall be two-thirds (2/3) of their regular rate of pay, capped at $200 per day and $2,000 in the aggregate.  

Additionally, employers will be required to post a notice, to be prepared by the Secretary of Labor, of EPSLA’s requirements.  A model of the required notice will be publicly available no later than March 25, 2020. 

Other Relevant Provisions

To help employers with the additional costs associated with its provisions, the Act will provide dollar-for-dollar payroll tax credits for employers.  The Act will also prevent all group health plans, health insurance issuers and individual health insurance plans from imposing any cost-sharing requirements related to COVID-19, including deductibles, copays, and co-insurance. 

The interplay between the new leave provisions in the Acts and pre-existing types of leave such as FMLA, the Americans with Disabilities Act, the Michigan Persons with Disabilities Civil Rights Act, and the Paid Medical Leave Act is complex.  Please give us a call if you have any questions on how the Acts may affect your business or your employees.  Our attorneys are standing by to assist.