We wanted to provide an update on the status of Federal efforts to provide relief to families and businesses as related to the Covid-19 crisis. This is a moving target with many parts; the information below was updated at 3pm March 23, 2020. We will provide additional updates as we can. Please contact Andrew Levert with any questions you may have.
Congress has embarked on a three-phase effort to support the health care and public health system and address the growing economic impact of COVID-19. H.R. 6201 – Families First Coronavirus Response Act (“Phase 2” or the “Act”), which was signed into law on March 18, 2020, by President Trump, provides approximately $104 billion to help fight COVID-19 and protect workers and families from the health and economic impact of the virus.
This bill responds to the coronavirus outbreak by providing paid sick leave and free coronavirus testing, expanding food assistance and unemployment benefits, and requiring employers to provide additional protections for health care workers. Among other things, the bill would require employers with fewer than 500 employees to continue to pay their employees under a variety of Coronavirus-related circumstances, with employers being repaid in the form of tax credits.
The employment-related aspects of the bill are essentially divided into 2 components: First, there is an entirely new law—The Emergency Paid Sick Leave Act (EPLSA)—that temporarily mandates that workers be paid their full wages for up to 2 weeks when they are unable to report to work for Coronavirus-related reasons.
Generally speaking, the EPLSA will be triggered by any one of the following events:
- The employee is required to self-isolate because they have been diagnosed with Coronavirus.
- The employee wants to go to the doctor because they are experiencing symptoms of Coronavirus.
- The employee is ordered to stay home by a doctor or a government official on the basis that the presence of the employee at work would jeopardize the health of others because the employee was exposed to the Coronavirus or the employee is symptomatic.
- The employee needs to care for any of the following family members who are either self-isolating or need to see a doctor because they are experiencing symptoms: parent, spouse, children under 18, pregnant daughters, pregnant next of kin, grandparents, a disabled grandchild, or a disabled child (regardless of age).
- The employee needs to care for any of the following family members that have been ordered to stay home by a doctor or a governmental official: parent, spouse, children under 18, pregnant daughters, pregnant next of kin, grandparents, a disabled grandchild, or a disabled child (regardless of age).
- The employee needs to care for a child because daycare or school is closed, and the babysitter is unavailable due to Coronavirus.
For triggering events 1 through 3 above, the employer will need to pay the employee their regular rate of pay while on leave. For triggering events 4 through 6 above, the employer will need to pay the employee two-thirds their regular rate of pay.
Full-time employees will be entitled to take up to 80 hours (2 weeks) of leave. Part-time employees will be entitled to leave based on the average number of hours they work in a given two week period. If the part-time employee’s hours fluctuate from week to week, employers must determine the average number of hours worked during the prior 6 months and provide leave equal to the number of hours they typically work in a two-week period. If the part-time employee never started working before they became sick, employers must provide the number of hours that it anticipated the employee would have worked in the absence of the triggering event. If EPSLA leave is no longer needed by the employee, benefits cease on the next regularly scheduled payday.
Employers will be repaid in the form of certain dollar for dollar tax credits. The legislation allows for refundable tax credits in “an amount equal to 100 percent of the qualified” sick leave paid by the employer for each calendar quarter. The credit can be taken against the employer’s portion of the Social Security taxes. However, there are some caps and limits. Specifically, the refund for sick leave is capped at $511/day for triggering events 1-3 above and at $200/day for triggering events 4-6 above.
The second component temporarily amends the Family and Medical Leave Act (“FMLA”) through The Emergency Family and Medical Leave Expansion Act to specifically cover Coronavirus-related leave, and requires employers to provide up to 12 weeks of leave for employees depending on the circumstances. Employers may use the new sick leave the bill seeks to mandate to cover the first 2 weeks of such leave, and employers may be obligated to provide pay for the additional leave up to 10 weeks.
Generally speaking, the EFMLEA will be triggered by any one of the following events:
- The employee is ordered to stay home by a doctor or a government official on the basis that the presence of the employee at work would jeopardize the health of others because the employee was exposed to the Coronavirus or the employee is symptomatic and the employee is unable to work remotely.
- The employee needs to care for any of the following family members that have been ordered to stay home by a doctor or a governmental official: parent, spouse, children under 18, pregnant daughters, pregnant next of kin, grandparents, a disabled grandchild, or a disabled child (regardless of age).
- The employee needs to care for a child because daycare or school is closed, and the babysitter is unavailable due to the Coronavirus.
This will apply to employers with fewer than 500 employees. The Secretary of Labor has the authority to exclude employers with fewer than 50 employees under limited circumstances. The EFMLEA will apply to any employee that has been employed for at least 30 days
The first 14 days will be unpaid, but the remaining 10 weeks must be paid. Employees may elect—but cannot be forced—to utilize accrued PTO, vacation or other sick leave during the initial 14 day period. Practically speaking, the employee will be paid for the first 2 weeks under the Emergency Paid Sick Leave Act, and once those benefits cease, the EFMLEA benefits will ensure continued payment of wages beyond the first two weeks.
Employers will be repaid in the form of certain dollar for dollar tax credits. The bill provides for refundable tax credits in “an amount equal to 100 percent of the qualified” FMLA leave paid by the employer for each calendar quarter. The credit can be taken against the employer’s portion of the Social Security taxes. However, there are some caps and limits. Specifically, the refund/credit is capped at $200/day per employee and $10,000 per quarter.
Congress is working to agree on a Phase 3 Coronavirus stimulus package that could include direct assistance to individuals and to small businesses, along with many industries affected by the national response to Coronavirus.
