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March 18 2020

Update to Employment Concerns Related to Coronavirus (COVID-19)

By: Regina M. Gilmour and Nikole L. Canute

NoticeOn March 18, 2020, President Trump signed into law a heavily revised version of HR Bill 6201, entitled the “Families First Coronavirus Response Act” (the “Act”). The Client Alert addressing the revised version is dated March 20, 2020 and entitled: Federal Paid Leave and the Families First Coronavirus Response ActDo not rely on the below summary of HR Bill 6201, as it was revised following publication of this article.

The House of Representatives passed HR 6201, which seeks to provide relief for those employees affected by the Coronavirus (COVID-19) outbreaks in Michigan.  Although the bill has not yet been passed by the Senate, the President has indicated that he will sign the bill if it receives Senate approval. 

Current Law Governing Sick Leave

Currently, there is only one law in Michigan that requires employers to provide paid leave to employees – the Paid Medical Leave Act – or PMLA - which went into effect on March 29, 2019.  The PMLA requires covered employers (those employers with 50 or more employees) to allow eligible employees to accrue up to a certain amount of paid leave each year.  That leave can be in the form of sick days or paid time off (“PTO”), so long as the employer meets the statutory minimum.  The PMLA also mandates that employees be allowed to use up to 40 hours of paid medical leave each year for specific purposes, including to deal with their own illness, or, potentially applicable here, circumstances caused by a public health emergency, such as school closures.

Other laws, such as FMLA (the Family Medical Leave Act), the Michigan Persons with Disabilities Civil Rights Act, or the Americans with Disabilities Act, may require employers to grant unpaid leave to employees who are ill, or who have a family member who is ill with COVID-19. 

If your employees have exhausted their PTO or sick days, you will need to consider whether you will pay your employees for days they may be quarantined, caring for a sick family member, or at home for childcare related issues.  Options include permitting employees to borrow unaccrued time off, giving employees the same number of additional PTO hours/sick days, or declining to deduct sick days or PTO while COVID-19 is active.  There is no legal requirement that employers allow employees to borrow unaccrued paid time off, however, you will want to consider whether you have permitted employees to borrow unaccrued PTO on other occasions.  If you choose to permit employees to borrow unaccrued PTO/sick days, consider these questions: Will you put limits on the amount of days employees can borrow?  What will you do if the employee leaves before he or she earns the leave they have already taken?

HR 6201 and Expanded Sick Leave for Qualifying Employees

HR 6201, if enacted, would create the “Emergency Family and Medical Leave Expansion Act” (the “FMLA Expansion Act”) and would apply to employers with fewer than 500 employees and to employees who have been employed for more than thirty (30) days and who have a qualifying need as defined by the FMLA Expansion Act.  A qualifying need is defined as:

  • Quarantine because of the employee’s exposure to COVID-19
  • Quarantine because the employee is exhibiting symptoms of COVID-19
  • Caring for a family member (which is defined more broadly than for other FMLA leaves) who was exposed to COVID-19 or is exhibiting symptoms of COVID-19
  • 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, an employee may take the first fourteen (14) days of the leave as unpaid leave and may elect to use accrued leave instead of unpaid leave.  However, unlike under the current law, the employer may not force the employee to use accrued leave.  After fourteen (14) days, the employer shall provide pay for each additional day of qualifying leave.  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.  Employees may take up to twelve (12) weeks of qualifying leave, which is in addition to leave for other reasons provided by FMLA. 

HR 6201 would also create the “Emergency Paid Sick Leave Act” (the “EPSLA”), which would apply to employers with 500 employees or fewer and would provide all employees, including new hires, with additional paid sick leave for the following reasons:

  • The employee has been diagnosed with COVID-19 or needs to obtain a medical diagnosis or care after experiencing the symptoms of COVID-19
  • The employee was exposed to COVID-19 or is exhibiting symptoms of COVID-19 and is complying with a recommendation or order by a public health official or health care provider that the physical presence of the employee would jeopardize the health of others
  • The employee needs to care for a family member who is self-isolating due to a COVID-19 diagnosis or is experiencing COVID-19 symptoms
  • The employee’s family member was exposed to COVID-19 or is exhibiting symptoms of COVID-19 and the family member is attempting to comply with a recommendation by a public health official that the physical presence of the family member would jeopardize the health of others
  • To care for a child if the school or place of care has been closed

If the employee meets any of the aforementioned criteria, then 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 the number of hours that the employee works on an average during a two-week period.  Employees must receive full pay for time missed because of their own health reasons or two-thirds (2/3) pay for time missed to care for a family member or child. 

To help employers with the additional costs associated with its provisions, HR Bill 6201 will provide dollar-for-dollar payroll tax credits for employers.  HR Bill 6201 would 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. 

Additionally, employers with fewer than fifty (50) employees 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 vitality of the business.” 

The expanded leave available under the FMLA Expansion Act and the EPSLA is temporary.  The Acts created by HR 6201 would become effective fifteen (15) days after the bill is signed by the President and would expire on December 31, 2020. 

Other Considerations

Finally, if you are considering permitting your employees to work from home and access municipal documents, you will need to be cognizant of the security ramifications of that choice.  Be sure employees are only connecting to secure networks and accessing trusted websites.  In addition, to avoid overtime claims, employers should dictate that employees may only work the hours scheduled. 

The key to your COVID-19 time off strategy will be consistent application among employees and compliance with any existing employee handbook policies.  The ever-changing spread of COVID-19 means that employers will need to be aware that benefit continuations may vary, depending on pending legislation, FMLA and other statutes, as well as employer policies and practices.  Those employers with employees covered by a collective bargaining agreement may have additional considerations.  Please give us a call if you have any questions on how COVID-19 may affect your business or your employees.  Our attorneys are standing by to assist.