20 March 2020

New paid leave laws in US amid Coronavirus outbreak


Brooke Schneider
Senior associate | US

Click here to read more insights on how we can weather the coronavirus outbreak with you.

Emergency FMLA

Under the new Emergency Family and Medical Leave law, paid leave is required when: (1) an employee must care for a minor child if the child’s school or childcare has been closed due to the pandemic; (2) The employee is in quarantine related to COVID-19; (3) the employee is experiencing symptoms of COVID-19; or (4) the employee is caring for an individual subject to quarantine related to COVID-19.

The new law is effective as of April 2, 2020, and expires on December 31, 2020, and covers employers with fewer than 500 employees. Employers with less than 50 employees cannot be sued civilly for FMA damages.

Employees (full-time and part-time) who have been on payroll for 30 days or more are eligible. Eligible employees are entitled to take up to 12 weeks of FMLA leave for a “qualifying need related to a public health emergency,” as set forth above such that the employee is unable to work (or telework). During the first 10 days (2 weeks), the leave would be unpaid, but an employee may be able to use their accrued paid time off to compensate. Although the law does not specify whether an employer may require that paid leave be used, in line with regular FMLA rules, it is likely to be the case. The remaining 10 weeks are to be paid at 2/3 of the employee’s regular rate, for the number of hours the employee would normally have been scheduled to work, up to a capped payment of $200 per day, or $10,000 total). The Emergency FMLA leave is job-protected leave (like standard FMLA), such that an employee must be returned to the same or equivalent position. However, there is an exclusion for employers with 25 or fewer employees where the position no longer exists due to operational changes as a result of the health emergency (i.e. downturn in business). However, if a smaller employer does not return the employee, they will be required to contact such displaced employees for up to one year if an equivalent position is available.

The law provides a series of refundable tax credits for employers who provide emergency sick leave or paid FMLA.

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act similarly goes into effect April 2, 2020, and expires on December 31, 2020, and applies to private employers with less than 500 employees, public agencies, and others (likely to be quasi-governmental). Employees need not be employed for 30 days to be eligible, but are eligible immediately for paid sick leave.

Employers are to provide sick leave for those who are unable to work or telework due to: (1) the employee being subject to a federal, state, or local quarantine or isolation order related to COVID-19; (2) the employee has been advised to self-quarantine by a healthcare provider; (3) the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis; (4) the employee is caring for an individual who is subject to or advised to quarantine; (5)employee is caring for a son or daughter whose school or daycare is closed, or childcare provider is unavailable due to covid-19 precautions; or (6) the employee is experiencing substantially similar conditions.

Employers are required to provide 80 hours of pay at their regular rate of pay for full-time employees. However, when the employee is taking care of a family member, they are to be paid at 2/3 the regular rate. Part-time employees are to be paid for the number of hours they work, on average, over a 2-week period. The law limits paid leave to a maximum of $511 per day ($5,110 in total) for leave due to 1, 2, or 3 above (own illness or quarantine reasons); and $200 per day (max $2,000) for reasons 4, 5, or 6.

The new law requires employees to be permitted first to use sick leave under the law, and then use any remaining accrued paid leave under the employer’s policy (but the use of accrued leave cannot be required).

Like the expanded FMLA provisions, employers will be eligible for refundable tax credits for payments to employees.

New York Legislation

Please note that there is currently legislation being passed in New York to deal with paid leave for employees as well (although New York does have Paid Family Leave and New York City requires paid leave under the New York City Earned Sick and Safe Time Act). We will provide an update shortly on that legislation as well.

Caution

Employers must be cognizant of the impact and interplay that these leave laws will have on their current leave/PTO policies, as well as how these laws will work in conjunction over the next year.

Click here to read more insights on how we can weather the coronavirus outbreak with you.

Brooke Schneider Senior associate | New York

Category: Article