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Families First Coronavirus Response Act

Families First Coronavirus Response Act’s Impact on Municipalities and Government Entities

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INTRODUCTION

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “Families First Act” or “Act”) which takes effect on April 1, 2020. The Families First Act includes two significant provisions mandating most employers to make sick leave and expanded family leave payments available to employees impacted by the coronavirus disease 2019 (“COVID-19”). Those provisions are the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act (the “EFMLEA).

The Families First Act is applicable to private sector employers with less than 500 employees[1] and all local government employers[2] with one or more employee. As such, all governmental entities such as townships, counties, municipalities, school districts, fire districts and other political subdivisions are subject to the mandates under the Families First Act. The Act provides refundable payroll tax credits to private employers to ease the burden associated with these paid leave requirements. Unfortunately, these tax credits cannot be claimed by any entity, agency or instrumentality of State or local government. This memorandum briefly summarizes the impact the Families First Act will have on our governmental clients throughout the state.

OVERVIEW

The Emergency Paid Sick Leave Act applies to all employee leaves taken from April 1, 2020 through December 31, 2020. All governmental employers with one or more employee are required to provide two weeks (up to 80 hours) of paid sick leave for employees meeting the COVID-19 related criteria described below.  Employees unable to work due to a bona fide need to care for an individual subject to quarantine or care for a child (under 18) due to closure of a school or the unavailability of a child care provider due to COVID-19 related reasons is eligible for paid leave at two-thirds (2/3rds) of their normal rate of pay for the two week period. While the Act states that paid sick leave may be taken only one time per employee, even if the employee experiences another qualifying reason, Department of Labor guidance indicates an employee may take the leave in separate full day increments as long as they are within the 80 hour limit, or the respective limit for a part-time employee.  employees are to be paid their normal wages or salary during the two week period with specified caps as discussed below.

Under the EFMLEA, employees who have been employed for at least 30 calendar days are eligible for up to 10 additional weeks of paid expanded family and medical leave at two-thirds (2/3rds) of their normal rate of pay if they are unable to work (or telework) due to a bona fide need to care for the employee’s child (under age 18) due to closure of a school or the unavailability of a child care provider due to COVID-19 related reasons.

Under the two provisions of the Family First Act, effective April 1, 2020, most qualifying employees will be eligible for two weeks of fully paid leave and up to ten weeks of expanded family leave at two-thirds (2/3rds) of their normal salary or wages, subject to the caps discussed below.

THE EMERGENCY PAID SICK LEAVE ACT

A.   Eligible Employees. The Emergency Paid Sick Leave Act requires employers to provide to each employee two weeks of paid sick  leave if the employee is unable to work (or telework) due to a need for leave because:

      1. The employee is subject to a Federal, State, or local quarantine or isolation order in relation to COVID-19. [3]
      2. The employee has been advised by a health care provider to self-quarantine because of concerns related to COVID-19.
      3. The employee is experiencing COVID-19 symptoms and is seeking medical diagnosis.
      4. The employee is caring for an individual who (a) is subject to a Federal, State or local quarantine or isolation order related to COVID-19 or (b) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
      5. The employee is caring for a child (under 18) of the employee if the child’s school or place of care has been closed or a caregiver is unavailable for reasons related to COVID-19.
      6. The employee is experiencing any other substantially similar conditions specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor. [4]

B.   Duration of Paid Sick Leave. The Emergency Paid Sick Leave Act mandates that full-time employees are entitled to up to two weeks (capped at 80 hours) of paid sick time. Part-time employees are entitled to the number of hours that the employee works on average during a normal two week period. If the employee has a varied work schedule, they are eligible for the average number of hours worked during the prior six-month period, or if employed for less than six months, the average since they were hired. Paid sick time does not carry over from one year to the next and employees are not entitled to reimbursement for unused leave upon separation from employment. Paid leave ceases beginning with the employee’s next scheduled work shift immediately following the end of the need for paid sick time under the Emergency Paid Sick Leave Act.

C. Required Compensation. If leave is required due to reasons 1, 2 or 3 in Paragraph A above, the employee is entitled to their normal salary or wages, without premium for any overtime compensation, or the applicable minimum wage if higher, with a cap of $511 per day and $5,110 in the aggregate for the two week period. If leave is due to reasons 4 or 6 in Paragraph A above, an employee is required to receive two-thirds (2/3rds) of their normal salary or wages, or the applicable minimum wage if higher, up to $200 per day and $2,000 in the aggregate for the two week period. For employees with variable rates of pay, employers should use their average wage or salary over the prior 6 months, or the average since being hired if employed for less than 6 months.

D. Employee Notice to Employer. Where leave is foreseeable, an employee is to provide notice to the employer of the request for leave as is practicable under the circumstances. After the first workday of paid sick time, employers may require employees to follow reasonable notification procedures for the continued maintenance of paid sick time.

E. Employer Prohibitions and Use of Paid Sick Time. An employee cannot be required, as a condition of being granted paid sick time under the Emergency Paid Sick Leave Act, to find a replacement employee to cover the hours during which the employee is using paid sick time. Additionally, an employer may not mandate an employee to use any other paid leave provided by the employer to the employee before the employee uses the paid sick time under the Emergency Paid Sick Leave Act. Paid sick time must be available for immediate use by the employee as of April 1, 2020 regardless of how long the employee has been employed by the employer.

F. Exempt Employees. Finally, the Emergency Paid Sick Leave Act permits employers to exempt from coverage an employee who is a “health care provider” or “emergency responder” so that these front line workers are encouraged to stay on the job. The Department of Labor has broadly defined both categories:

a. “Health care provider” includes anyone employed at a doctor’s office, hospital, health care center, medical school, health department, nursing home, home health care provider, lab or medical testing facility, pharmacy or similar facilities, as well as employees of entities that contract with any of the above to provide services or maintenance or that provide or produce any medical equipment or supplies.
b. “Emergency responder” includes those employees necessary for the provision of transport, care, health care, comfort and nutrition of patients or are otherwise needed to prevent the spread of COVID-19, including military personnel, law enforcement, firefighters, EMS personnel, EMTs, paramedics, 911 personnel, emergency management personnel, public works personnel, doctors, nurses and other medical personnel as well as employees of entities that contract with any of the above to provide services or maintenance.

EFMLEA

A. Eligible Employees. Any full-time or part-time employee who has been on the employer’s payroll for at least 30 days is eligible for the benefits provided by EFMLEA. Like regular Family Medical Leave Act (FMLA) leave, there are no minimum hours of weekly work or employment duration requirement associated with EFMLEA, other than the 30 day employment requirement. EFMLEA permits employees to take up to 12-weeks of job protected leave due to an employee’s inability to work (or telework) because the employee must care for their child (under the age of 18) because the child’s school or childcare facility has been closed or the child’s childcare provider is unavailable for reasons related to COVID-19 (eligibility reason 5 in Paragraph A above). EFMLEA does not extend benefits for the care of any individuals or family members other than the employee’s child under the age of 18. It is important to also note that leave taken under the EFMLEA counts towards an employee’s total of 12-weeks of FMLA leave. The EMLEA just adds different eligibility criteria and provides for partial payment of salary or wages during the leave.

B. Paid Leave under EFMLEA. Under EFMLEA, the first two weeks of leave are unpaid. Thereafter, for the following 10 weeks, an eligible employee receives two-thirds (2/3rds) of their normal salary or wages, or two-thirds (2/3rds) of the applicable minimum wage if higher, with a cap of $200 per day and $12,000 in the aggregate over the 12-week period, While the first two weeks of EFMLEA leave are unpaid, an employee may elect to use any available pay benefit during the unpaid period, including paid leave under the Emergency Paid Leave Act. The paid leave provided by the Emergency Paid Leave Act and EFMLEA run concurrently. Consequently, an employee meeting the respective eligibility requirements could receive two weeks of leave at full pay under the Emergency Paid Leave Act with the remaining ten weeks of EFMLEA leave paid at a rate of two-thirds (2/3rds) of their normal salary or wages.

C. Employee Notice to Employer. As with the Emergency Paid Sick Leave Act, where EFMLEA leave is foreseeable, an employee is to provide notice to the employer of the request for leave as is practicable under the circumstances. After the first work day of leave, employers may require employees to follow reasonable notification procedures for the continued maintenance EFMLEA leave.

D. Health Insurance. Like FMLA leave, employers are required to continue all group health insurance coverage and employer retirement benefit payments on the same terms as if the employee had continued working.

E. Exempt Employees. Finally, EFMLEA also permits employers to exempt from coverage an employee who is a “health care provider” or “emergency responder” so that these front line workers are encouraged to stay on the job.

FOR IMMEDIATE ACTION

A. Posting of Notice. As of April 1, 2020, Employers are required to post and keep posted a notice approved by the Secretary of Labor regarding employee rights under the Families First Act. The notice must be posted in conspicuous places on the employer’s premises where employee notices are customarily posted. A printable copy of the notice approved by the Secretary can be found here.

B. Adoption or Amendment of Policies. All employers should also consider updating existing leave policies or adopting new policies consistent with the Families First Act if the employer’s current policy does not have an extended sick leave and Family Medical Leave Act policy consistent with the requirements of the Families First Act. If a decision is made to exempt healthcare workers or emergency responders from coverage, governing body action should be taken by April 1, 2020, although the Act does not set a timeline for exemption.

C. No Retaliation and Penalties. Employers may not discharge, discipline, or otherwise discriminate against any employee for taking leave under the Emergency Paid Sick Leave Act, or for filing a complaint related to the Act. Employers who violate any provision of the Emergency Paid Sick Leave Act will be subject to the penalties and enforcement described in Sections 16 and 17 of the Fair Labor Standards Act, 29 U.S.C. 216, 217, including payment of back wages, liquidated damages, and attorneys’ fees and costs.

D. No Retroactive Application. The Family First Act takes effect on April 1, 2020, and these new forms of leave are immediately available for eligible employees at that time. Employers cannot deny paid leave under the Act because the employer granted prior leave under the FMLA or voluntarily granted paid leave for a reason identified in the Act prior to April 1, 2020.

This continues to be an evolving environment and the Municipal Practice Group of Kroger Gardis & Regas, LLP is here to answer your questions. Please feel free to contact Portia Bailey-Bernard, Ted Nolting or myself with your questions and concerns.

Brian C. Bosma, Chairman
Municipal Practice Group
Kroger Gardis & Regas, LLP

[1] Subject to exemptions [2] Federal employees are exempt from this law and most are covered under other federal law.  [3]Indiana’s current “stay-at-home” order does not appear to quality. [4] The Secretary has not identified qualifying conditions.