Families First Coronavirus Response Act Signed into Law

On March 18, 2020 the President signed into law a bill which affords employees with some economic relief during the COVID-19 crisis. In general, the Families First Coronavirus Response Act: (1) extends and expands the protection of the Family and Medical Leave Act for employees who are unable to work because they are caring for children home from school or daycare due to the coronavirus, including requiring paid FMLA leave benefits; (2) provides a new paid sick leave entitlement for certain coronavirus-related absences; and (3) provides tax credits to help employers pay for these enhanced benefits. The provisions of this law apply to employers who have less than 500 employees with some notable exceptions. The law takes effect fifteen (15) days after enactment or April 2, 2020 and expires on December 31, 2020. The following are the salient points regarding the expanded leaves.

Emergency Family and Medical Leave Expansion Act

• The Emergency Family and Medical Leave Expansion Act (“Emergency FMLA”) legislation provides eligible employees with up to twelve (12) weeks of job protected leave to allow an employee who is unable to work or telework, to care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency (i.e., coronavirus). An earlier version of the bill which would have provided broader coronavirus-related reasons for the emergency leave was rejected and the final bill is limited to this single reason for leave.
• The law applies to any private entity and covered public entities with at least one and fewer than 500 employees, although the Secretary of Labor is empowered to grant a hardship exception for employers with fewer than 50 employees.
• Any employee working for a covered entity for at least thirty calendar days prior to the leave is eligible.
• The first 10 days of the leave are unpaid, but employees may elect to substitute accrued paid leave (e.g., vacation, PTO time). After the initial 10-day period, employers must pay full-time employees at two-thirds the employee’s regular rate of pay (capped at $200 per day or $10,000 in the aggregate).

Emergency Paid Sick Leave Act

• The Emergency Paid Sick Leave Act (“EPSLA”) legislation allows eligible employees to take up to 80 hours of paid sick leave (or two weeks of work based on usual hours for part-time employees) at the employee’s regular rate of pay (or two-thirds of the employee’s regular rate of pay in some cases:
  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 self-isolate;
  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 issues; or
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of the Treasury and Labor.
• The employer’s requirement to provide paid leave is capped at $511 per day ($5,110 in the aggregate) where leave is taken for reasons numbered 1-3; and capped at $200 per day ($2,000 in the aggregate) when leave is taken for reasons numbered 4-6.
• As with the Emergency FMLA, the EPSLA applies to any private entity and covered public entities with at least one and fewer than 500 employees. If it is not financially possible for an employer to pay these funds, the Secretary of Labor may grant a hardship exception for employers with fewer than 50 employees.
• Unlike the Emergency FMLA, an employee is immediately eligible for the EPSLA (there is no 30-day working requirement).

Tax Credits

• Each quarter, employers subject to these Emergency FMLA and EPSLA payment requirements are entitled to a fully refundable tax credit equal to 100% of the qualified wages paid by the employer. In the event that the amount paid by the employer exceeds the tax liability, the employer may receive either a tax credit or a tax refund. As of this date, that decision remains unclear.

We understand that these are uncertain times and employers may be faced with unprecedented and unique situations surrounding COVID-19. Our Rubin and Rudman team of attorneys is here to assist you with your legal needs and any questions you may have about this topic or other COVID-19 issue. If you have a question about the information in this Client Alert, please contact Denise Murphy, dmurphy@rubinrudman.com, James Cox, jcox@rubinrudman.com, or any member of our Labor & Employment team below:

Jeffrey A. Dretler, jdretler@rubinrudman.com
Alfred A. Gray, agray@rubinrudman.com
Paul J. Hodnett, phodnett@rubinrudman.com
Elizabeth M. Sullivan, esullivan@rubinrudman.com

Please note: This communication is for informational purposes only and should not be construed as legal advice, nor does it constitute a client/attorney relationship. Under the rules of the Supreme Judicial Court of Massachusetts, and in some other states, this material may be considered as advertising.