Emergency Sick Leave and Family Leave Act
In response to financial implications caused by coronavirus a/k/a COVID-19, H.R. 6201 was enacted on March 18, 2020 and expands the Family Medical Leave Act of 1993 and Sick Leave laws.
EMERGENCY FAMILY AND MEDICAL LEAVE ACT
The Emergency Family and Medical Leave Expansion Act (the “Emergency Family Leave Act”) will apply to employers of 500 or less employees (without distinction made between employers or employer through PEO), and for employees who have been on the job for at least 30 days and would otherwise be entitled to FMLA leave. The Emergency Family Leave Act will become effective April 2, 2020, and will expire on December 31, 2020.
The Emergency Family Leave Act applies where an employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school (including elementary, middle, junior high and high school) or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency. This act does not mandate that the child themselves be sick. This provision expands the application of FMLA which can be applied for due to the sickness of the employee or the family member of the employee.
Although telework is not defined in the Emergency Family Leave Act, the normal meaning is being able to work remotely. Therefore, the Act requires that the employee be unable to work remotely or come to work due to the need related to the coronavirus or other FMLA approved circumstances.
Though the proposed Bill itself does not specify what notice and/or certifications as to the reason for leave, other than notice to be provided if foreseeable, the FMLA which underlies this expansion provides that an employer may require that an employee provide a certification issued by a health care provider as to the condition or reason for inability to perform work responsibilities. Therefore, it would seem practical that similar employer requirements apply to the Emergency Family Leave Act as well.
The Emergency Family Leave Act will, after 2 weeks, 10 business days, unpaid leave, provide employees with compensation at the rate of not less than 2/3 of such employee’s regular rate of pay, and for: (i) the number of hours the employee would normally work during such time period; (ii) for hourly/variable hour employees, the average number of hours worked over the prior 6 month period; or (iii) if a new hire, the number of hours reasonably expected for the employee to work at the time of hire. The compensation should not exceed $200 per day and $10,000 in the aggregate.
During the initial two (2) week unpaid leave period, the employee may, at the employee’s option, elect to utilize accrued vacation, personal, medical or sick leave however the employer may not require an employee to utilize such vacation, personal, medical or sick leave.
The Secretary of Labor has the authority to make small businesses with fewer than 50 employees exempt from the Emergency Family Leave Act when the application would jeopardize the viability of the business as a going concern. Employers of less than 50 employees will have the ability to request exemption from the Secretary of Labor, however at this time, neither the mechanism for doing so, nor the criteria relevant for exemption eligibility is yet available.
Except for employers of less than 25 employees, employers must restore employees utilizing leave to their positions unless the position no longer exists due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency. The employer must make reasonable efforts for one year from the date that the public health emergency concludes or the date 12 weeks after the employee’s leave commences, whichever is earlier, to restore the employee to an equivalent position, pay, benefits and terms of employment.
EMERGENCY PAID SICK LEAVE ACT
The Emergency Paid Sick Leave Act (the “Emergency Sick Leave Act”) applies to employers of 500 or less employees and applies to employees who have been employed by the employer for at least 30 calendar days. This Act will become effective April 2, 2020 and will expire on December 31, 2020.
The Emergency Sick Leave Act provides employees with two (2) weeks (up to 80 hours) paid sick leave when the employee is unable to work or telework in the following circumstances: (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 an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2); (5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions; (6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
The two (2) weeks of paid sick leave will be calculated based upon a 40 hour work week for full-time employees or the average number of hours worked over a two (2) week period (using prior 6 month time period) for part-time employees. For new hires (must have been employed for 30 days), the number of hours will be that which was reasonably expected for the employee to work at the time of hire.
The maximum daily benefit amount to which an employee is entitled pursuant to the Emergency Sick Leave Act is dependent on whether the employee is taking sick leave due to his or her own illness or if due to a condition involving a family member. If the employee must quarantine or seek diagnosis/preventative care, the employee will be paid at the lesser of: (a) the employee’s regular rate of pay or (b) $511 per day, for a maximum benefit of $5,110. If the employee is taking leave to provide care for a family member who is quarantined or obtaining diagnosis or preventative care, or if the employee must care for a child whose school has closed or for which child care is unavailable, then the employee will be the lesser of: 2/3 of the employee’s regular rate of pay or (b) $200 per day, for a maximum benefit of $2,000.
The Emergency Sick Leave Act provides that an employer may require employees to follow reasonable notice procedures to continue receiving paid sick leave time but does not provide guidance with respect to what sort of notice and/or proofs are adequate. Since the Emergency Sick Leave Act was adopted under the FMLA, and since the FMLA permits employers to require a physician’s note to substantiate a leave request, until there is a clarifying amendment, regulation or ruling, it is conceivable that notice from a healthcare provider or from a school or daycare closure may be warranted here as well.
The benefits provided by the Emergency Sick Leave Act will be in addition to, not replacement of any existing employer provided sick leave plans (including benefits required under any State sick leave law—example New Jersey’s Earned Sick Leave Act). Employers are prohibited from modifying current paid leave plans in an effort to avoid compliance with the Emergency Sick Leave Act. Moreover, employers cannot require employees to utilize employer provided paid leave prior to utilization of paid leave under the Emergency Sick Leave Act.
The Emergency Sick Leave Act requires that employers post notice in the workplace of the rights provided to them under the Act. The Secretary of Labor will provide the requirement notice form within seven (7) days of enactment and guidelines no later than 15 days after the enactment of the bill. These guidelines may exempt small businesses with fewer than 50 employees from complying with sick leave only when the employee is caring for a child whose school has closed or for which child care in unavailable if such requirement would be shown to jeopardize the viability of the business as a going concern.
Failure to comply with the provisions of the Emergency Sick Leave Act may subject the employer to a fine of not more than $10,000 or jail up to 6 months, or both.
TAX CREDITS TO OFFSET BENEFITS
Employers are entitled to a credit against the employer’s portion of the FICA payroll taxes equal to the aggregate total of benefits paid under both The Emergency Family Leave Act and The Emergency Sick Leave Act during the corresponding calendar quarter. As of the publication of this memorandum, the precise manner of obtaining such credit is not yet available.
STATE LAW IMPLICATIONS
The Emergency Sick Leave Act differs from the New Jersey Earned Sick Leave Act (the “NJ Sick Leave Act”) only to the extent that the under the NJ Sick Leave Act, employer plans can utilize an accrual method by which employees earn one hour of paid sick leave for every 30 hours worked with a cap of 40 hours per year whereas under the Federal law, there is no accrual option—all time is immediately available to all employees. Moreover, under the NJ Sick Leave Act, the employee can roll over up to 40 hours of earned leave from year to year or otherwise paid for any unused time, whereas there is no rollover option under the Emergency Sick Leave Act. Otherwise, the earned sick leave can be used for the same purposes including for the closure of the employee’s workplace or the employee’s child’s school or child care center due to an epidemic or other public health emergency. The Emergency Sick Leave Act expressly states that it will not diminish the rights or benefits provided to an employee under State law or existing contractual arrangement between the employer and employee, therefore, the benefits available to employees under the new Federal legislation is in addition to NJ Sick Leave Act benefits and/or an employer’s existing sick leave policy.
In addition, the New Jersey Legislature is considering similar laws to combat Coronavirus. The most relevant law, No. 3848, would prohibit an employer from terminating and/or retaliating in any way against an employee who took time off during the public health emergency as per the Executive Order 103. The employee would have to provide documentation from a medical professional to the effect that he or she had or was likely exposed to an infectious disease which may infect others and what specified time period is needed for leave. The employer would have to reinstate the employee to their prior position and on the same terms and conditions of employment. The bill was enacted on March 20, 2020 and was effective immediately. Also Bill 3846, which was approved on March 19, 2020, is effective immediately and was enacted to allow for employees to make a claim for unemployment benefits for wages lost due to coronavirus related reasons. The law provides that an employee can make a claim for unemployment if the employee missed work due to (a) the need to care for a family member; (b) due the employee’s illness; (c.) due to a school or childcare facility closing; and (d) other purposes deemed appropriate. The law shall expire July 1, 2021.
At this time, neither house of the Pennsylvania Legislature has passed any legislation that would impact employee rights during this public health emergency. Currently, bills circulating the State House of Representatives relating to commerce include:
(a) Authorizing electronic notarizations;
(b) Waiving the waiting period and search for work requirement of Unemployment Compensation;
(c) Expansion of Loan program to small businesses and non-profits, likely at 0% and waive repayment for 12 months; and
(d) Extend local government tax deadlines.
Maselli Warren, P.C. will continue to monitor legislative developments in both the Federal and State levels, and will provide updates as they become available.