On Sat., March 14, 2020, the House passed a supplemental appropriations bill, H.R. 6201, providing for various economic measures to respond to the COVID-19 coronavirus outbreak. The Senate is expected to vote on the Bill as early as Monday night, and President Trump has expressed his support for the measures.
If passed by the Senate and signed into law, the Bill will provide paid leave for employees of even the smallest employers to respond to the coronavirus outbreak. In its current form, the Bill only applies to employers with fewer than 500 employees and provides tax credits to employers for providing emergency paid sick leave.
Emergency Paid Sick Leave for 2 Weeks
The Bill will require employers with fewer than 500 employees to provide two weeks of paid sick leave to workers for specific qualifying leaves related to the coronavirus (e.g., to self-isolate after coronavirus diagnosis, to obtain medical care, to comply with quarantine recommendations, or to care for a child whose school has been closed as a result of coronavirus). The two-week emergency paid sick leave is in addition to any otherwise available sick leave. Only after the two weeks of emergency sick leave are used may the employee then use otherwise available leave. Employers will also be required to post a notice to employees regarding the availability of this leave. The Department of Labor is tasked with developing a model notice.
Up To 12 Weeks of Job-Protected Leave
The Bill also will amend the Family and Medical Leave Act of 1993 (“FMLA”). Employees working for at least 30 days with an employer with fewer than 500 employees will be eligible for 12-weeks of FMLA job-protected leave to be used for leave related to coronavirus response. However, for smaller businesses with fewer than 50 employees, the Secretary of Labor has the authority to exempt such employers if the leave requirements would jeopardize the viability of the business as a going concern. Thus, the effect of this provision on employers with fewer than 50 employees should be reviewed closely once the final law is passed.
As passed by the House, the Bill will provide for leave related to a public health emergency with respect to the coronavirus that has been declared in a location that includes the employee’s work (including the commuting route of the employee), residence, or community.
Qualifying reasons for covered leave will be:
- An Employee’s Own Coronavirus Sickness – if the employee needs leave to comply with the recommendation or order by a health care provider or health authority not to physically be present at work due to either the employee’s exposure to or symptoms of coronavirus, and the employee cannot perform the functions of their position and comply with the recommendation/order.
- To Care for a Family Member with Coronavirus – if the family member has been determined by a health care provider or health authority as jeopardizing the health of others in the community due to either exposure to or symptoms of coronavirus.
- To Care for the Minor Child of the Employee – 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 with respect to coronavirus.
The Bill also provides the first two weeks of leave may be unpaid or employees may choose (but may not be required) to use accrued leave for the first two weeks of leave. Thereafter, the employer shall provide paid leave at not less than two-thirds the employee’s regular rate.
Tax Credits to Offset Paid Sick Leave
Employers will be eligible for a tax credit to offset the emergency paid sick leave required to be paid pursuant to the Bill. The credit is for up to 10 days and the amount will depend upon whether the leave is related to sickness (e.g., employees who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to coronavirus) or family care (e.g., caring for a family member or for a child whose school or place of care has been closed). For sick leave, the credit for each employee’s wages is capped at $511 per day. For family leave, the credit for each employee’s wages is capped at $200 per day. Notably, self-employed individuals will also be eligible for a tax credit subject to the same caps based upon the reason for the leave.
Employers subject to the FMLA expanded leave are also eligible for a tax credit for qualified family leave wages for each employee, up to $200 per day, and up to $10,000 for all calendar quarters. Self-employed individuals will also be eligible for such credit subject to a review of average daily income, not to exceed $200 per day.
Emergency Unemployment Insurance Stabilization and Access Act of 2020
The Bill provides for additional funding of $1 billion in 2020 for unemployment insurance grants to states under specified conditions. The government has earmarked $500 million, available immediately, to boost state programs that meet basic requirements for ensuring access to benefits. The other $500 million is reserved for grants to states which experience at least a 10% increase in unemployment.
The full text of the Families First Coronavirus Response Act can now be found –HERE–
In addition to the above federal response, local jurisdictions are issuing responses to stem the spread of disease, and these changes may directly impact business operations. Employers are encouraged to monitor these local changes and to check our Web site regularly for updated information as we follow the progress of the Bill and weigh its effect on our clients.