COVID-19 FEDERAL LEGISLATION & UPDATES

(Updated 3.30.20)

On March 28, the U.S. Dept. of Labor released a frequently asked questions document that addresses many pressing issues facing employers including how to count employees and how to calculate an employee’s wage.

In summary, here are the portions of the bill directly impacting employment law as listed in a National Law Review article.

1) Paid Job-Protected Leave Under the Family and Medical Leave Act

The bill providers employees of employers with fewer than 500 employees the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act (“FMLA”). To be eligible for paid leave, employees must have been on the employer’s payroll for 30 days and may use emergency FMLA leave for the following reasons:

• To adhere to a requirement or recommendation to quarantine due to exposure to, or symptoms, of coronavirus;
• To care for a family member who is adhering to a requirement or recommendation to quarantine due to exposure to, or symptoms, of coronavirus; and
• to care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable due to the coronavirus.

The first two weeks of leave may be unpaid; the employee may choose to substitute accrued paid time off or other medical or sick leave during this period, but an employer cannot require an employee to do so. After the first two weeks of unpaid leave, employers must continue paid FMLA leave at a rate of no less than two-thirds of the employee’s usual rate of pay.

As with traditional FMLA leave, this leave is job-protected, and an employer must return the employee to the same or equivalent position upon return to work.

2) 14 Days of Paid Sick Leave

Under the bill, employers with fewer than 500 employees will be required to provide full-time employees with two weeks (80 hours) of paid sick leave for the following reasons:

• To self-isolate because of a diagnosis of COVID-19, or to comply with a recommendation or order to quarantine due to exposure or exhibition of symptoms;
• To obtain a medical diagnosis or care if the employee is experiencing symptoms of COVID-19;
• To care for a family member who is self-isolating due to a diagnosis of COVID-19, experiencing symptoms of COVID-19 and needs to obtain medical diagnosis or care, or quarantining due to exposure or exhibition of symptoms; or
• To care for a child whose school has closed, or childcare provider is available, due to COVID-19.

Employers must compensate employees for any paid sick time they take at their regular rates of pay (unless the leave is being used to care for a family member or child, in which case, the employee is only entitled to two-thirds of his or her regular rate of pay). The sick leave is available for immediate use by employees, regardless of length of employment.

Additionally, part-time employees are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a two-eek period.

3) Tax Credits for Paid FMLA and Sick Leave and Grant of $1 Billion Dollars for Emergency Unemployment Insurance

The bill, in its current form, provides for a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA. The credits are as follows:

• A refundable tax credit for employers equal to 100 percent of qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act that are paid by an employer for each calendar quarter. The tax credit is allowed against the tax imposed by section 3111(a) (the employer potion of Social Security taxes). The amount of qualified family leave wages considered for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability under section 3111(a) for all employees for all employees for any calendar quarter, the excess credit is refundable to the employer.
• A refundable tax credit for employers equal to 100 percent of qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act that are paid by an employer for each calendar quarter. The tax credit is allowed against the tax imposed by section 3111(a) of the Internal Revenue Code (the employer portion of Social Security taxes).

4) Bill Provides $1 Billion in Funds to be Transferred to States

($500 million made within 60 days) for anticipated increases in unemployment compensation claims.

The rest of the bill includes SNAP eligibility waivers, child nutrition program funding (through existing statutory authority such as school meal programs and WIC) and public health funding to require health insurance coverage of COVID-19 testing at no cost to consumers.

A full summary of the legislation from the U.S. Chamber can be found here.

U.S. Chamber of Commerce sent a policy recommendation letter to Congress

• Requests a cancellation of all payroll taxes paid by employers for March, April and May.
• Requests an expansion of SBA loan eligibility rules surrounding disaster loans.
• Requests the creation of credit facilities to provide similar loans as the SBA disaster relief loans for employers with more than 500 employees.