Family First Coronavirus Response Act

Legal updates

CONGRESS PASSES THE “FAMILIES FIRST CORONAVIRUS RESPONSE ACT” (H.R. 6201)  

  
 March 18, 2020   
    
Last Friday, March 13, 2020, the House of Representatives passed a Resolution that amended and revised H.R. 6201 as originally passed by the House. The 130-page Bill, as enrolled, was sent to the Senate and approved on Wednesday, March 18, 2020. President Trump is expected to sign it within the next 24 hours. It covers a myriad of provisions related to COVID-19, including substantial appropriations for the school lunch program, the Indian Health Services program, Medicaid, etc. The focus of this Management Alert is on the paid sick leave and group health insurance provisions, most of which will have immediate applicability to all employers.  

EFFECTIVE DATE AND DURATION: As presently written, FFCRA takes effect 15 days after it is enacted into law and continues in effect, with some exceptions not relevant to the paid sick leave or the FMLA expansion provisions, until it sunsets on December 31, 2020.

FMLA EXPANSION PROVISIONS:
  • Amends the eligibility provisions of FMLA to provide that eligible employees are entitled to 12 weeks of FMLA leave “during the period beginning the date [the Act] takes effect, and ending on December 31, 2020, because of a qualifying need related to the [COVID-19] public health emergency.” 
  • Adds a new category of “Public Health Emergency Leave,” subject to the following provisions: 
    • An eligible employee “means an employee has been employed for at least 30 calendar days” and for whom a public health emergency leave is requested.” 
      • Comment: The normal standard of 1250 hours worked is not applicable to Public Health Emergency Leaves. However, the employee must have worked for the employer for at least 30 days.
    • Applicable to any public employer that employs one or more employees and to private employers with fewer than 500 employees. The Secretary of Labor is authorized to issue regulations that would exclude employers with fewer than 50 employees from coverage of the FMLA provisions of the FFCRA. It remains to be seen whether the Secretary of Labor will issue such regulations, and if he does whether the exclusion will be extended to all public and private employers.
      • Comment: As written, private employers with 500 or more employees are not covered by the FMLA’s new public health emergency leaves provisions.
    • The qualifying need to take the leave “means the employee is unable to work (or telework) due to a need to care for a son or daughter under 18 years of age … if the 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.”
    • The first ten days of public health emergency leave “may consist of unpaid leave.”
    • After ten days of unpaid leave, for each day thereafter, the employer shall provide “paid leave,” which is to be calculated “on an amount that is not less than two-thirds of an employee’s regular rate of pay,” as determined under FLSA, and “the number of hours the employee would otherwise be normally scheduled to work.” However, “[i]n not event shall such paid leave exceed $200 per day and $10,000 in the aggregate.
      • Comment: Normally, under FMLA, while an employee is on FMLA leave, other than the obligation to continue to provide health insurance on the same terms, employers are not required to continue to pay employees who are on FMLA leave. It needs to be emphasized that this new pay requirement is only for FMLA leaves that meet the requirements for a public health emergency leave.
    •  Upon the expiration of the leave, the employer is generally obligated to restore the employee to his/her former positions, although there are some exceptions.
  • Employee Notice Requirement: Where “the necessity for public health emergency leave is foreseeable, an employee shall provide the employer with as much notice as practicable.”
  • Secretary of Labor’s Regulatory Authority: Grants the Secretary of Labor the authority to regulations for good cause to “exclude certain health care providers and emergency responders from the requirement to provide them with public health emergency leaves.” This exclusion is not automatic; the Secretary of Labor must issue regulations. It remains to be seen what conditions, if any, the Secretary of Labor might impose for excepting first responders.
EMERGENCY SICK LEAVE ACT: Embedded in FFCRA, this Act requires employers must “provide employees with “paid sick time to the extent that the employee is unable to work (or telework) due to need for leave because”:
  1. “The employee is subject to a Federal, State or local quarantine 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 is seeking a medical diagnosis.”
  4. “The employee is caring for an individual” covered by 1 or 2 above.
  5. “The employee is caring for a son or daughter of such employee if the school or place of care … has been closed, or the childcare provider … is unavailable due to COVID-19 precautions” 
  6. “The employee is experiencing any other substantially similar condition specified” by Federal authorities.
However, public employers who employ health care providers and/ or emergency responders “may elect to exclude such employee[s]” from the paid sick leave provisions.

Comment: As we read the Act, the FMLA Expansion provisions are designed for leaves necessitated by the need to care for a son or daughter under the age of 18. On the other hand, the Emergency Sick Leave Act, is directed to the employee who is unable to work due the circumstances described above. However, as the Act as currently written, an employee of an employer with less than 500 employees can use both the FMLA expansion provisions and the emergency paid sick time provisions set forth in Emergency Sick Leave Act, assuming the employee meets the requirements for both. The Act does not provide for how possible access to both paid sick leave provisions are to be sequenced.
  • Duration of The Paid Sick Time: The following is the amount of paid sick time that must be provided:
    • “For full-time employees, 80 hours.”
      • Comment: As currently written, the FFRCA does not make exceptions for employees like firefighters who typically have a work week of 50 or more hours. This may be clarified or amended in the coming days or weeks.
    • For part-time employees, the average number of hours worked over a two week period. For a part-time employee with varying hours, the number of hours worked per week is based on either:
      • The average hours worked over the last 6 months; or
      • If the employee has not worked for 6 months, the employee’s reasonable expectation of the number of hours he or she would work
    • The use of paid sick time terminates upon the termination of the need for the paid sick time.
    • Employers cannot require an employee “search for or find a replacement employee ….”
    • Paid sick time provided under the Act does “not carry over from 1 year to another.”
  • Calculation of Paid Sick Time: The following is the calculation of paid sick time that must be provided:
    • For categories (1), (2), or (3) as set forth above (essentially the employee’s own COVID-related condition): the employee’s regular rate of pay, capped at $511 per day or $5,110 in aggregate.
    • For categories (4), (5), or (6) as set forth above (essentially caring for another and “substantially similar conditions”): 2/3 of the employee’s regular rate of pay, capped at $200 per day or $2,000 in aggregate. 
  • Use of Paid Sick Time: Must be available for “immediate use” by an employee “regardless of how long the employee has been employed by the employer.”
  • Sequencing of Paid Sick Time with Other Employer Provided Paid Time Off: “An employee may first use paid sick time under [the Act]” for any of the reasons specified in the Act. However, “[a]n employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses paid sick time” as provided in the Act.  
    • Comment: This changes the leeway the employers have under FMLA to require employees to use some or all other paid time off before going on FMLA leave.
POSTING REQUIREMENT: Employers are required to post notices about the Act basic provisions; the Secretary of Labor is directed to “make publicly available a model notice” not later than “7 days after the date of enactment” of the Act.

ENFORCEMENT PROVISIONS: The Act contains strong enforcement provisions, with the usual prohibitions against taking adverse employment action or retaliation based on an employee’s use of paid sick leave. Violations are considered violations of the Fair Labor Standards Act (FLSA), which allows a prevailing plaintiff to recover attorneys’ fees and, in some cases, double damages.

RULES OF CONSTRUCTION: Provides that nothing in the Act shall be construed “to any way diminish the rights or benefits that an employee is entitled to under any other Federal, State, or local law, collective bargaining agreement; or existing employer policy.” The Act also provides that is an employee is not entitled to any financial or reimbursement upon termination or separation of employment for any “paid sick time under the Act that has not been used by such employee.”

TAX CREDIT FOR COST OF PROVIDING PAID SICK LEAVE AS REQUIRED BY FFRCA: Private sector employers can claim a credit against required FICA taxes “each calendar quarter [in] an amount equal to 100 percent of the qualified family leave wages paid” each quarter. There are detailed provisions governing this credit. Each private employer’s CFO and/or CPA should become familiar with these provisions. 

However, this credit is not available to public employers. Thus, the Act specifically provides that “[t]his credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality thereof.”  

GROUP HEALTH INSURANCE PROVISIONS
The Act also broadly provides that employers offering group health insurance benefits “shall not impose any cost sharing (including deductibles, copayments, and coinsurance) requirements” for any of the following items or services furnished during the COVID-19 health emergency, starting on or after the effective date of the Act:
  • “In vitro diagnostic products,” i.e., COVID-19 testing, that are “approved, cleared, or authorized” under the Federal Food, Drug, and Act, as well as “the administration of such vitro diagnostic products.”
  • “Items and services furnished to an individual during health care provider office visits (which term includes in-person visits and telehealth visits), urgent care center visits, emergency room visits in an order for or administration of an in vitro diagnostic product [i.e., COVID-19 tests] …,” but only to the extent that such services or products relate to their furnishing/ administration or “to the evaluation of such individual for purposes of determining the need of such individual for such product.”
  • Regulatory Authority: The Secretaries of HHS, Labor, and Treasury are given the authority to implement these health insurance provisions “through sub-regulatory guidance, program instruction or otherwise.” 
Do not hesitate to call your labor and employment counsel to discuss how this new legislation will impact your workplace during.
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