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The Federal Government’s COVID-19 Response Requires Employers With Fewer Than 500 Employees to Provide Paid Leave

The Federal Government’s COVID-19 Response Requires Employers With Fewer Than 500 Employees to Provide Paid Leave

Key Notes:

  • If you are an employer with fewer than 500 employees, effective April 2, your company may be required to provide certain paid sick leave and emergency FMLA leave to employees through the end of 2020.
  • Under the Families First Coronavirus Response Act (Act), all employers who have fewer than 500 employees are required to provide up to 80 hours of paid sick leave for certain qualifying absences.
  • In addition, even employers who have fewer than 50 employees are required to provide paid emergency FMLA leave to employees whose children’s schools have closed or who have had a child care provider loss due to COVID-19.
  • Businesses with fewer than 50 employees may be exempted from some of the above requirements if complying with them would jeopardize the viability of the business as a going concern.
Emergency Family and Medical Leave

Unless you’ve employed more than 50 persons at any given time, you’ve likely never considered the rights and obligations created under the federal Family and Medical Leave Act (FMLA). Under normal circumstances, the FMLA applies only to employers with “50 or more employees.” However, for the purposes of the Act, that threshold is replaced with “fewer than 500 employees.” So now all small businesses, including those with fewer than 50 employees which were not previously subject to the FMLA, have obligations to provide paid FMLA leave in certain circumstances.

Under what circumstances am I now required to provide FMLA leave?

In general, the FMLA provides 12 weeks of job-protected leave to eligible employees for specified family and medical reasons, including a “serious health condition” that makes the employee unable to perform the essential functions of his or her job, or to care for the employee’s spouse, child or parent who has a serious health condition. Those obligations still apply if you have more than 50 employees.

However, under the Act, employees with more than, and fewer than, 50 employees are required to provide paid leave to employees who must be absent to care for a minor child because of a COVID-19-related school closure or child care provider loss. For purposes of this “Emergency FMLA” or “EFMLA,” the traditional eligibility requirements are thrown out the window, and employees are eligible so long as they have worked for the employer for at least 30 days.

What part of FMLA is now paid?

Typically, all 12 weeks of FMLA leave are unpaid. However, if an employee takes EFMLA leave to care for a minor child because of a COVID-19-related school closure or child care provider loss, only the first 10 days of leave are unpaid. For the final 10 weeks, these employees receive up to two?thirds of their pay, with payments capped at $200 per day and $10,000 in the aggregate. Employees may choose (at their sole discretion) to apply any current paid time off to the unpaid weeks, but employers may not require employees to do so, regardless of existing company policy.

Of course, employees who become ill with COVID-19 or who are caring for family members who have COVID-19 may still be covered by the FMLA’s original “serious health condition” provision, so long as they work for an employer who has 50 or more employees. This type of leave remains unpaid. Only those employees who take leave to care for children who are at home due to a COVID-19-related school closure or child care provider loss are entitled to paid FMLA leave.

Emergency Paid Sick Leave

The Act also provides up to 80 hours of paid sick leave if the employee:

  1. Is subject to a federal, state or local quarantine or isolation order;
  2. Has been advised by a health care provider to self-quarantine;
  3. Is experiencing symptoms of COVID-19 and is seeking a diagnosis;
  4. Is caring for an individual covered by (1) or (2) above;
  5. Is caring for a son or daughter whose school or place of care has been closed or whose child care provider is unavailable due to COVID-19 precautions; or
  6. Is experiencing any other substantially similar condition specified by the secretary of the Department of Health and Human Services.

Full-time employees are entitled to 80 hours of paid sick leave paid at their regular rate of pay, capped at $511 per day; part-time employees are also entitled to leave based upon their average hours worked in a two-week period. Consistent with the Act’s emergency FMLA provisions, if employees are taking the leave to care for family members, they are only entitled to two-thirds of their regular rate of pay, capped at $200 per day.

It is important to note that, unlike the Act’s EFMLA provisions discussed above, all employees are immediately eligible for this paid sick leave, regardless of how long they have been employed. The paid sick leave provided under the Act is also in addition to any other paid leave available to the employees, and they may choose to use this emergency paid sick leave before using any other types of leave.

Exemptions and Resources for Small Employers

The Act provides several possible exemptions and other resources for small businesses:

First, while FMLA generally requires that employees who take FMLA leave be restored to their original positions at the end of that leave, the Act exempts employers with fewer than 25 employees from this requirement, so long as the following conditions are met:

  • The position held by the employee when his or her FMLA leave began no longer exists because of economic conditions or other operational changes caused by a COVID-19-related public health emergency that occurred during the period of the employee’s leave;
  • The employer makes reasonable efforts to restore the employee to an equivalent position in terms of pay, benefits, and other terms and conditions of employment; and
  • If these efforts fail, the employer then makes reasonable efforts to contact the employee if such a position does become available within one-year of either the end of the public health emergency or the end of the employee’s leave, whichever occurs first.

Second, the Act authorizes the Department of Labor to issue regulations on exemptions for employers with fewer than 50 employees, but only with respect to the obligation to provide EFMLA or pay sick leave for leave taken to care for a child whose school or day care has closed, and only when the imposition of such requirement would jeopardize the viability of the business as a going concern.

Third, employers with fewer than 50 employees may be eligible to apply for hardship waivers from the leave provisions affecting workers whose children’s schools have closed.

Finally, the paid leave provided by the Act must be advanced by the employer. However, the federal government will give companies refundable tax credits on a quarterly basis for the full amount of leave paid out in compliance with this Act, and businesses concerned about their cash flow may be able to receive advance funds.

Upcoming Webinar

For more details on these provisions and their requirements, please join us for a webinar on Tuesday, March 24 from 9 to 10 a.m. ET. Please register online to receive an email containing log-in information.