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Labor & Employment News Alert

Summary of H.R. 6201, Families First Coronavirus Response Act

March 18, 2020

By: Justin M. Harrison and Nicole Johns Barker

On March 13, 2020, President Trump declared the Coronavirus (COVID-19) pandemic a national emergency. Shortly after midnight on March 14, 2020, the U.S. House of Representatives overwhelmingly voted to pass the Families First Coronavirus Response Act (H.R. 6201) in response to the Coronavirus outbreak to reduce the economic impact on individuals and business taxpayers.  Although the bill is still awaiting action from the Senate, the White House has already signaled its support for it.

 

In addition to addressing various public health concerns, the bill contains several provisions that will directly impact employers, such as expanding the Family Medical Leave Act (FMLA) and providing paid sick leave. There has been some confusion as to which bill was the final bill passed on the morning of March 14th, even among the members of the U.S. House of Representatives, so on March 18, 2020, an engrossed bill was released.  This article provides an outline of the engrossed bill.

 

A.        Emergency Family and Medical Leave Expansion Act

 

Purpose: The Emergency Family and Medical Leave Expansion Act would impose a new federal emergency paid leave program that requires employers to provide eligible employees with job-protected leave for those employees unable to work (or telework) to care for their son or daughter under 18 years old if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable due to COVID-19.

 

Note: Unlike the other versions of the bill, this version does not make paid FMLA available for self-care or self-quarantine or care of other family members sick or quarantined.  This version also defines an inability to work during a childcare-related leave to include inability to telework.

 

Applicability to Employers: The Emergency Family and Medical Leave Expansion Act would apply to any employer with fewer than 500 employees, but it also would give the Department of Labor authority to exempt small businesses with fewer than 50 employees.  The bill provides little guidance as to how the Department of Labor should make these determinations.

 

Note: The bill allows employers of employees who are health care providers or emergency responders to elect to exclude such employees from coverage.

 

Eligibility to Employees: The Emergency Family and Medical Leave Expansion Act would apply any individual employed by the covered employer for at least 30 days before the first day of leave.

 

Emergency Leave Benefits: Eligible employees would have the right to take up to 12 weeks of job-protected leave due to the qualifying COVID-19-related reasons described above.  The first 14 days of this leave could be unpaid.  However, an employee could elect to substitute accrued vacation leave, personal leave, or medical or sick leave for unpaid leave without any input from the employer. Any remaining leave following the initial 14-day period would be paid at a rate of no less than two-thirds of the employee’s regular rate of pay, with a cap of $200 per day and $10,000 in the aggregate.

 

Effective Period: The provisions would go into effect 15 days after the date of enactment and expire on December 31, 2020.

 

Notice Requirement: In any case where the necessity for leave is foreseeable, the employee should provide the employer with such notice of leave as soon as practicable.

 

B.        Emergency Paid Sick Leave Act

 

Purpose and Eligibility of Employees: Under the Emergency Paid Sick Leave Act, paid sick time would be available for immediate use by the employee if the employee is unable to work (or telework) for any of the following reasons, regardless of how long the employee has been employed by the employer:

 

  • The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
     
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
     
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
     
  • The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
     
  • 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.
     
  • 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.
     

Applicability to Employers: The Emergency Paid Sick Leave Act would apply to any private employer with fewer than 500 employees, public agencies, and any other entities that are not private entities or individuals employing one or more employees.

 

Note: This version of the bill expands the Secretary of Labor’s authority to issue regulations to exempt employers with fewer than 50 employees to apply to paid sick days.  It also allows employers of employees who are health care providers or emergency responders to elect to exclude such employees from coverage.

 

Emergency Paid Sick Benefits: The paid sick leave provision would entitle full-time employees to 80 hours of paid sick leave at their regular rate of pay and part-time employees with leave equal to their average number of hours worked over a two-week period.  However, employees would be paid two-thirds of their regular rate of pay for leave to take care of a family member who is self-isolating or child whose school has closed.  The amount of paid sick leave would be subject to certain caps, $511 per day and $5,110 the aggregate for the employee’s own illness or quarantine, and $200 per day and $2,000 in the aggregate for any other qualifying reason.

 

Note:  The Emergency Paid Sick Leave explicitly states that employers cannot require employees to use other paid leave before utilizing leave under the Emergency Paid Sick Leave Act.  However, the bill does not indicate whether employers could require employees to use sick leave under the Emergency Paid Sick Leave Act for the first two weeks under the Emergency Family and Medical Leave Expansion Act.

 

Effective Period: The provisions would go into effect 15 days after the date of enactment and expire on December 31, 2020.

 

Notice Requirement: Employers would be required post notice in conspicuous places on the premises of the employer where notices of employees are customarily posted, informing employees of their rights to emergency paid sick leave.

 

Comment:  Contrary to some legal summaries of the bill, no reimbursements for paid sick leave are available under the Emergency Paid Sick Leave Act.  Such costs for paid sick leave would be offset by a tax credit, as described below. 

 

C.        Tax Credits for Paid Sick and Expanded Family and Medical Leave

 

The bill would also provide a series of refundable tax credits for employers to help offset the costs of paid sick leave under the Emergency Paid Sick Leave Act and paid FMLA leave under the Emergency Paid Family and Medical Leave Act. 

 

For the tax credits for paid sick and paid family and medical leave, there would be a refundable tax credit equal to 100 percent of qualified paid sick or family leave wages paid by an employer for each calendar quarter, subject to certain caps and limits.  The tax credit is allowed against the employer portion of Social Security taxes.  The credit would apply to amounts paid to employees who are sick or quarantined, with a lesser credit applying to amounts paid to employees caring for a family member or for a child whose school or place of care has been closed.

 

Subject to certain caps and limits, tax credits for leave would also apply to self-employed individuals, including those who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation for coronavirus.  A lesser tax credit would apply for those self-employed individuals caring for a family member or for a child whose school or place of care has been closed due to coronavirus, similar to above.

 

D.        Conclusion

 

Although all indications are that the Senate will pass the Families First Coronavirus Response Act (H.R. 6201), it is important to note that the bill has not yet been finalized.  As Congress’ response to COVID-19 remains fluid, Jackson Kelly PLLC will continue to monitor these legislative efforts and provide updates as they become available.

 

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