Understanding new paid leave rules in the Coronavirus Response Act
In an attempt to address aspects of the workplace upheaval caused by the COVID-19 pandemic, Congress passed the Families First Coronavirus Response Act. That act included major temporary changes to the Family and Medical Leave Act (FMLA) and created a new paid leave entitlement. The Act itself raised many questions, some of which are being answered in an ongoing series of Department of Labor (DOL) guidance.
Perhaps the single most important aspect of the Act is what it does not cover. The Act does not provide any paid or protected leave time in the event of a company shut down for any COVID-19-related reason.
Under the Act, all employers with fewer than 500 employees are required to offer “emergency” FMLA leave to any employee with at least 30 days’ tenure, but only for instances in which that employee is unable to work or telework because his or her children’s school or place of childcare is closed due to COVID-19. This requirement is imposed even on employers who are not otherwise covered by the FMLA because they are too small.
Leave under this “emergency” category is partially paid, unlike the regular FMLA. The first 10 working days are unpaid; after that, the employee is to be paid ⅔ of their regular salary for weeks 3 through 12, subject to a daily cap of $200 and an aggregate cap of $10,000. Employees can use their available paid time off (PTO) during the initial unpaid time; they can also use the new, second component to the Act.
The second component to the Act is Paid Sick Leave (PSL). PSL is available to employees starting on their first day on the job. It provides for up to 80 hours of paid time off in the following circumstances:
1. If the employee is using that time because he or she (a) is subject to a state, local or federal quarantine; (b) has been advised by a healthcare provider to self-quarantine; or (c) is experiencing symptoms of COVID-19 and seeking a medical diagnosis, that employee is entitled to a maximum amount of $511 per day and $5,110 total;
2. If the employee is taking the paid sick time to (d) care for an individual subject to a federal, state or local quarantine or isolation; (e) care for a child whose school/place of care is closed or whose care provider is unavailable; or (f) deal with a "substantially similar condition," that employee is entitled to a maximum amount of $200 per day and $2,000 total.
Recent guidance published by the DOL has expanded on some of the issues presented by the two new requirements. For example, if both the employer and the employee agree, the employee can take PSL and available employer-provided PTO simultaneously; however, employers are prohibited from forcing employees to use company-provided PTO first, or instead of the new PSL. Importantly, the tax credits available to offset the cost of PSL cannot include employer provided PTO.
The guidance also suggests that employers maintain detailed records of the reasons for employees’ use of emergency FMLA and PSL, presumably as a back-up for the tax credits in the event of an audit. Unless, and until the IRS or the DOL come up with specific forms for this information, the assumption is that employers should make sure that each employee receiving paid leave under either section of the law provide a dated written explanation for their request, and that those documents (email or otherwise) be preserved.
The new laws have a short shelf life — from April 1, 2020 to December 31, 2020. It is likely that there will be additional clarifications and explanations as COVID-19's effect on the workplace evolves.