Yesterday, Congress passed the Families First Coronavirus Response Act, and the day before Governor Cooper issued an Executive Order expanding unemployment insurance benefits. The President has not yet signed the federal act into law, but it is anticipated that he will do so immediately.
The Families First Coronavirus Response Act
Unlike the regular Family Medical Leave Act (“FMLA”), The Families First Coronavirus Response Act (FFCRA) would apply to an employer with fewer than 50 employees. Both the proposed FMLA changes and the proposed paid sick leave would take effect 15 days after enactment and would remain in place only until the end of 2020. There are there separate acts within the FFCRA that are relevant to business owners.
1) Emergency FMLA Expansion Act (EFMLAEA)
a. Unlike regular FMLA, this would apply to employees if they had been employed at least thirty days.
b. Eligible employees get 12 weeks of FMLA leave if they have to miss work (or cannot telework) because they have to stay home with children if the school is closed more than five consecutive days.
c. FMLA leave is unpaid for the first two weeks. However, the employee can choose to use their own paid sick leave (or the emergency paid sick leave granted below).
d. After the first two weeks, employers are required to pay the employee at a rate greater than or equal to 2/3 the employee’s rate of pay.
e. Leave is capped at $200 per day and $10,000 in the aggregate.
f. This is in addition to benefits already available under the FMLA.
g. The Department of Labor has explicit authority to create regulations that would “exempt small businesses with fewer than 50 employees from the requirements of the EFMLAEA when the imposition of such requirements would jeopardize the viability of the business.”*
h. While the FMLA generally requires employers to restore covered employees to the job they had before they took leave, employers with fewer than 25 employees would not be required to if the employee takes leave under this Act and their position no longer exists due to economic conditions or other changes in the employer’s operating conditions that (1) affect employment and (2) are caused by the public health emergency during the leave period. However, the employer must make reasonable efforts to restore the employee to a position equivalent to one they held when leave began (i.e., equivalent benefits, pay, terms and conditions of employment). Additionally, the employer would be required to make reasonable efforts to contact the employee if an equivalent position becomes available during the one year period beginning on the earlier of (i) the date on which the qualifying need related to public health emergency concludes, or (ii) the date that is 12 weeks after the date on which the employee’s public health emergency leave commences.
2) Emergency Paid Sick Leave Act
a. If an employee takes leave due to being quarantined or ordered isolated, a diagnosis of Coronavirus, showing symptoms of the Coronavirus, being ordered to stay home due to exposure to Coronavirus, staying home to care for a sick or exposed person, or staying home with children, an employer must pay two full weeks of paid leave (part time employees will be paid according to the number of hours they work on average).
b. Leave is capped at $511 per day and $5,110 in the aggregate to care for themselves and $200 per day and $2,000 in the aggregate to care for another.
c. This leave would be in addition to any employer-provided leave, and employers would not be permitted to change their leave policy.
d. An employee can take this leave no matter how long they’ve been employed (no thirty-day requirement).
3) Tax Credits for Paid Sick and Paid Family and Medical Leave - Covered employers would be provided payroll tax credits to cover the wages paid to employees under the sick leave and family medical leave programs described above.
*We have no idea when regulations would be issued and what they would say.
Governor Cooper Issues Executive Order Expanding Unemployment Insurance Benefits
The executive order waives the one-week waiting period to apply for benefits and removes the requirement to look for another job while receiving benefits. People can now apply online, and employees whose hours are simply reduced due to the response to the Coronavirus outbreak (and not laid off) can apply for benefits. Employers will not be held responsible for employees seeking benefits if doing so is a result of the response to the Coronavirus outbreak.
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