We hope that you’re staying safe and healthy during these hectic times. As part of our ongoing efforts to help our small business clients navigate this new reality, we wanted to update you on a significant development in the law that might impact you.
The House just approved a bill, the Families First Coronavirus Response Act, containing various measures that will impact employees and employers during the nation’s Coronavirus-related slowdown. Essentially, the bill creates emergency leave pursuant to the Family Medical Leave Act (“FMLA”) and paid sick leave for all small business employees. While the bill still needs Senate approval, with a vote likely occurring sometime this week, we want to update you on what you can expect in the likely event this becomes new law. Of course, if things change we’ll update you on that as well. Here’s what you need to know:
Who does this apply to?
All employers with less than 500 employees must provide the following:
Emergency FMLA for any employee who has worked for you for at least 30 days (this essentially obviates the typical FMLA eligibility requirements of 1 year and 1,250 hours and similar requirement’s for New Jersey’s version of the FMLA).
Emergency paid sick leave for all employees (regardless of when they started working for you and how much they work).
What do employees get?
Like the FMLA, employees get up to 12 weeks for emergency FMLA. Unlike the FMLA, while the first 2 weeks are unpaid, employees must be paid at least two-thirds of their usual pay for the remaining time. Again, like the FMLA, employees may supplement those initial two weeks of unpaid leave with paid-time-off (“PTO”). Unlike the FMLA, employers cannot require that employees use accrued but unused PTO. For purposes of this emergency FMLA leave, employees may use this time to:
Quarantine themselves due to experiencing symptoms of the Coronavirus, or being exposed to it
Care for a higher risk family member who is being quarantined for the same reasons
Care for a child if the child’s school/place of care has been closed or the childcare provider is otherwise unavailable as a result of the Coronavirus
For paid sick leave, employees get the equivalent of 2 weeks paid. For full-time employees, this means 80 hours. For part-time employees, a pro-rated amount equal to the average time worked over previous two-weeks (or reasonably expected amount of hours for newer workers). Employees may use this time to:
Take preventative care (including getting a diagnosis) of Coronavirus symptoms
Quarantine themselves as a result of a Coronavirus diagnosis
Comply with directions from public officials or a health care provider that the employee should not go to work because the Coronavirus
Care for a family member for these same reasons, or for a child whose school/facility has closed or whose childcare provider is unavailable because of the Coronavirus
Employees are entitled to full pay if they use this time to care for themselves and are entitled to two-thirds pay if they use this time to care for a family member/child. Remember, because this would cover all employees, it includes the person who just started yesterday.
Already offer your employees paid time-off? That’s great, but please note this new paid sick time is in addition to whatever your current policy is. And don’t think about changing your paid time-off policy now to prevent employees from “double dipping” – that’d be unlawful.
Speaking of unlawful, just in case it needs to be stated, the new law has anti-discrimination and anti-retaliation provisions. So don’t discharge, discipline, or in any other way discriminate against employees who take leave under these new provisions.
There is also supposed to be a model notice created by the Secretary of Labor, with this notice to be conspicuously posted for all employees. Again, we will keep you all informed as soon as we hear updates.
These components of the new law would expire on December 31, 2020.
So, what do employers get?
There’s no doubt that this law is primarily meant to be relief for employees – not employers. In addition to the added headache of compliance, employers can expect significant consequences for any violations – not too different than what we currently see in the FMLA/paid time-off context.
The good news? Employers would be entitled to a tax credit of 100% of the amount of qualified wages paid under these new rules. That could be a significant relief, but obviously confirm with your tax professionals. Of course, businesses need the cash flow to make those payments in the first place. Recognizing this, there are suggestions that the Treasury would advance funds to businesses who need to cash flow to make these payments. Other good news? Employers won’t be required to pay out, or let employees carry over, any unused time.
There also seems to be some provisions allowing for exemption from these new rules if you have less than 50 employees and can show that compliance would “jeopardize the viability” of your business.
Stay tuned. We should know more on this bill in the next week or so. Even then, as currently drafted, the bill wouldn’t go into effect until 15 days after it’s passed. If/once that happens, we’ll provide an additional update on the new law, including provisions and further nuances we didn’t discuss here (i.e. restoring employees on leave to their position).
In the meantime, please don’t hesitate to contact us if you have any questions or concerns. We’re here to help you get through these trying times as much as we can.