Human Resource Solutions for a Changing World
March 19, 2020
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Yesterday afternoon, March 18, 2020, the Senate passed H.R. 6201, the House
This Act is comprised of various “divisions,” including the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA) that provide paid time off to eligible employees for various
reasons related to COVID-19. The FFCRA also includes the Emergency Unemployment Insurance Stabilization and Access Act of 2020
that provides funding to states offering unemployment
compensation to workers impacted by COVID-19.
This e-bulletin provides precise guidance and clarification about your obligations under the new paid sick and paid family leave laws, along with an update on unemployment insurance changes that impact employers and employees.
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NOTE:
If you did not receive our March 13 e-bulletin addressing coronavirus leaves of absence, or our March 3 e-bulletin
with questions and answers to the most common coronavirus HR concerns, click
HERE
to request a copy.
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Coverage, Cost Burden, and Effective Date
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Despite deep concerns about the burden on small businesses, the Senate retained provisions under both the EPSLA and EFMLEA that require private businesses with
fewer than 500 employees
(small businesses) to provide paid leave for certain reasons related to COVID-19. Public agencies are covered if they employ one or more employees.
If your business has more than 500 employees, it is not covered under the paid sick and paid family leave requirements in this e-bulletin. Changes to unemployment compensation benefits described below do, however, apply.
Employers who pay employees for time off under the EPSLA and EFMLEA can take a payroll tax credit for 100% of the payments on their quarterly tax return, up to a specified daily maximum amount per employee; however, the delay in reimbursement creates a burden on many small businesses.
(See below for more details about the tax reimbursement.)
Both the EPSLA and the EFMLEA take effect on
April 2, 2020,
and expire on
December 31, 2020.
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Emergency Paid Sick Leave Act (EPSLA)
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Covered employers must provide full-time employees up to
80 hours
of paid sick time and part-time employees a number of hours of paid sick time equal to the number of hours the employee works over a two-week period (on average).
Paid sick time must be provided
when
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
related to COVID-19.
(2)
The employee has been advised by a
healthcare provider
to self-quarantine due to concerns related to COVID-19.
(3)
The employee is experiencing
symptoms of COVID-19
and seeking a medical diagnosis.
(4)
The employee is caring for
an individual
who is subject to an order as described in paragraph (1) or has been advised as described in paragraph (2).
(5)
The employee is caring for a
son or daughter
of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
(6)
The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and Secretary of Labor.
Emergency paid sick time taken
for reasons under
paragraphs (1), (2), and (3)
above must be paid at the
employee’s regular rate
,
which cannot be less than the highest minimum wage rate in effect (this could be the federal minimum wage rate or a minimum wage rate in effect in the State or locality) and cannot exceed $511 per day ($5,110 in the aggregate).
Emergency paid sick time taken for reasons under
paragraphs (4), (5), and (6)
must be paid at
two-thirds of the employee’s regular rate*
, which cannot be less than the highest minimum wage rate in effect and cannot exceed $200 per day ($2,000 in the aggregate).
In addition:
—
Availability and Use:
Sick time under the EPSLA must be available for use by employees immediately upon hire
and employers cannot require employees to use other paid leave prior to using emergency paid sick leave.
—
Variable Hour Employees:
If a part-time employee has a schedule that varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if he or she had not taken emergency paid sick time, the employer can pay emergency paid sick time at a rate equal to the average number of hours the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time, including hours for which the employee took leave of any type.
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Department of Labor (DOL) Guidelines:
No later than 15 days after the date of the enactment of the EPSLA, the Secretary of Labor must issue guidelines to assist employers in calculating the amount of required paid sick time.
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Employee Notification of Need to Use Emergency Paid Sick Time:
After the first workday (or portion thereof) that an employee receives paid sick time under the EPSLA, the
employer can require the employee to follow reasonable notification procedures in order to continue receiving paid sick time.
—
Small Business Exemption:
The Department of Labor has the authority to issue regulations for good cause to exempt small businesses
with fewer than 50 employees
from paying emergency paid sick time to employees who are unable to work
due to childcare conditions under
paragraph (5)
above
when the imposition of such requirements would jeopardize the viability of the business as a going concern. The Department of Labor can also exclude certain healthcare providers and emergency responders from the definition of an eligible employee by allowing the employer to opt out.
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Carryover and Payout Upon Separation:
Emergency paid sick time under this provision cannot be carried over from one year to the next and employers are not required to pay out unused emergency paid sick time upon separation of employment.
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Employee Notice:
The U.S. Department of Labor must make available a model notice with provisions of the EPSLA no later than 7 days after the date of enactment of the EPSLA. Employers must post and keep posted this notice in conspicuous places on the premises of the employer where notices to employees are customarily posted.
—
Antiretaliation Provision:
Employers are prohibited from disciplining, terminating, or in any other manner discriminating against employees who take leave under the EPSLA or who file a complaint or cause to be instituted any proceeding under the Act.
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* T
he "regular rate" is defined as "all remuneration for employment paid to, or on behalf of, the employee" except payments specifically excluded in the Fair Labor Standards Act (FLSA), such as payments for time not worked
on a holiday or when using sick or vacation time. The regular rate is used to calculate the
overtime rate for employees holding positions that are classified as nonexempt.
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Emergency Family & Medical Leave Expansion Act (EFMLEA)
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Covered employers (private businesses with fewer than 500 employees and public agency employers) must provide
any employee
who has been employed for
30 or more days
with
up to 12 weeks
of job-protected leave when the employee is
UNABLE
to work (or telework) due to a need
to care for the employee’s son or daughter under 18 years of age
if the child’s school or place of care has been closed, or the childcare provider of the son or daughter is unavailable, due to a public health emergency (COVID-19).
The
first 10 days
of this leave can be
unpaid
and the remaining time must be paid at a rate
not less than two-thirds of the employee’s regular rate of pay
(see above for definition of “regular rate”) for the number of hours the employee would otherwise be normally scheduled to work, not to exceed $200 per day ($10,000 in the aggregate).
Employees can elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for the first 10 days of unpaid leave under the EFMLEA (including using emergency paid sick leave available under the EPSLA), or the employer can require this.
In addition:
—
Small Business Exemption
:
The Department of Labor has the authority to issue regulations for good cause to exempt small businesses with
fewer than 50 employees
from the requirements under this Act when the imposition of such requirements would jeopardize the viability of the business as a goi
ng concern. The Department of Labor can also exclude certain healthcare providers and emergency responders from the definition of an eligible employee.
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Variable Hour Employees:
If a part-time employee has a schedule that varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if he or she had not taken emergency family and medical leave, the employer can pay emergency family and medical leave at a rate equal to the
average number of hours
the employee was scheduled per day over
the 6-month period
ending on the date on which the employee takes the leave, including hours for which the employee took leave of any type.
—
Employee Notification of Need to Use Emergency Family and Medical Leave:
When the need to use emergency family and medical leave is foreseeable, employees must provide their employers with notification of the leave as is practicable.
—
Job Restoration for Employers with Fewer Than 25 Employees:
Employers with fewer than 25 employees are
not
required to restore an employee taking emergency family and medical leave to his or her position that was held at the commencement of the leave
if the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a public health emergency
.
In this situation, the employer must make a
reasonable effort
to restore the employee to a position equivalent to the position held when the leave commenced, with equivalent benefits, pay, and other terms and conditions of employment. If these reasonable efforts fail, the employer must make reasonable efforts for a one-year period to contact the employee if an equivalent position becomes available.
[The one-year period begins on the earlier of the date the qualifying need related to a public health emergency concludes OR the date that is 12 weeks after the date on which the employee’s leave commences.]
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Intermittent Leave:
Employees may not use emergency family and medical leave intermittently.
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Employers that pay employees for emergency paid sick leave or emergency family and medical leave can take a credit against their payroll taxes each calendar quarter in an amount equal to 100% of the qualified sick leave wages paid during the quarter, up to these maximum amounts:
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$200 per day for emergency sick time
taken in accordance with
paragraphs (4), (5), and (6)
under the emergency paid sick leave section above (not to exceed $2000 per employee in the aggregate) and for emergency family and medical leave (not to exceed $10,000 per employee in the aggregate).
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$511 per day for emergency sick time
taken in accordance with
paragraphs (1), (2), and (3)
under the emergency paid sick Leave section above (not to exceed $5,110 per employee in the aggregate).
If the credit exceeds the employer’s total quarterly tax liability for all employees, the excess credit is refundable to the employer. Employers may elect not to have the credit apply. Additional tax-related rules apply that employers should review with their accountant or CPA.
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As with any legislation that is enacted quickly, a number of unanswered questions will likely arise about the EPSLA and EFMLEA. Our hope is that the U.S. Department of Labor (DOL) will swiftly issue regulations and advisories that address the most pressing questions, including the biggest question most employers have, which is:
If an employer provides paid sick leave to an employee prior to the date the EPLSA takes effect (April 2) for reasons covered under the EPSLA, is the employer required to provide an additional 10 days of emergency paid sick leave (with or without taking the tax credit) to comply with the EPSLA?
The original version of the EPSLA specifically
required
employers to provide emergency paid sick time in addition to any paid sick leave provided by the employer prior to enactment of the Act; however, the
amended version of the bill
that was signed by the President
did not
include this language and is silent on the matter.
Until we receive clarification from the DOL about how existing paid sick leave policies interact with the EPSLA, employers risk liability if they have provided sick leave to an employee prior to April 2 for reasons related to the EPSLA and refuse to provide an additional 10 days.
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Important Paid Leave Considerations
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As you review your obligations under the EPSLA and the EFMLEA, here a few important points to keep in mind:
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Business Closures or Employer Requirement for Leave:
Based on the literal or plain meaning of the language in the EPSLA and EFMLEA, it does not appear that paid sick or paid family (childcare) leave are available to employees who are unable to work due to a
business closure,
or situations where an
employer
requires an employee to leave work, such as when an employer prohibits an employee from reporting to work due to COVID-19 concerns. It appears that the pay and job protection benefits under these Acts are only available to employees under the specific circumstances listed.
—
Laying Off or Furloughing Employees on Paid Family Leave:
The EFMLEA has job restoration provisions for employers with
fewer than
25 employees (outlined above) that exceed FMLA job restoration provisions. Employers with 25 or more employees are subject to the job restoration requirements in the FMLA for employees who use paid family or medical leave.
Clients who find it necessary to lay off or furlough employees who are on paid family leave should contact our office to discuss applicable regulations and requirements for their business.
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Leave to Care for Any Individual:
The EPSLA provision related to caring for another person who is under a quarantine order or self-quarantine based on a recommendation from a healthcare provider permits the employee to care for any individual, not just a family member.
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EFMLEA Unpaid Days:
The first 10 days of emergency family and medical leave are unpaid; however, employees can use emergency paid sick leave to cover this time. Both Acts provide for time off due to childcare needs and both require the same rate of compensation (two-thirds of the employee’s regular rate of pay).
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Length of Service Requirements:
There is no length-of-service requirement for an employee to use emergency paid sick leave; it is available
immediately upon hire
to both full- and part-time employees. Emergency family and medical leave (up to 12 weeks of leave for childcare needs) is available to full- and part-time employees
after 30 days
of employment.
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Healthcare Provider Definition and Advice:
An employee is eligible for emergency paid sick leave when the employee has been
advised by a healthcare provider
to self-quarantine due to concerns related to COVID-19. In addition, an employee is also eligible for paid sick leave to care for any other individual under this same circumstance.
Under the Act, the term “healthcare provider” has the same meaning given to this term in the Family and Medical Leave Act, which means that it is broadly defined.
In addition, as a practical matter, employees may not be able to provide documentation to support the healthcare provider’s advice. Most doctors’ offices and clinics are overwhelmed with patient needs and may find it difficult to provide documentation pertaining to a self-quarantine recommendation. In addition, an employee (or other individual) could receive a recommendation to self-quarantine from a healthcare provider via phone. In light of these realities, when necessary,
we recommend that employers accept
verbal confirmation
of a healthcare provider's recommendation
from the employee.
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Pay for Both Sick and Family Leave:
Language in the revised Act pertaining to the payment of emergency sick and family leave time is confusing. It is unknown if an employer who compensates an employee above the daily maximum rate in the Act will be eligible for a tax credit equal to at least the daily maximum rate, or if the tax credit is lost. Language addressing this was removed from the original House bill.
To play it safe, until the DOL issues its regulations, employers should not exceed the compensation amounts for paid sick and paid family leave cited in the Acts ($511 per day or $200 per day, depending on the reason for the leave).
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Emergency Unemployment Insurance Benefits
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Last week, the
U.S. Department of Labor
i
mplemented new guidance for states offering unemployment insurance (UI) to assist Americans affected by COVID-19. The guidance permits significant flexibility for states to
amend their laws
to provide UI benefits in multiple situations related to COVID-19.
Federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. In addition, states are now allowed to pay benefits when:
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An employer temporarily ceases operations
due to COVID-19, preventing employees from coming to work.
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A
n individual is quarantined
with the expectation of returning to work after the quarantine is over.
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An individual leaves employment
due to a risk of exposure or infection or to care for a family member.
In addition to these changes, the
Emergency Unemployment Insurance Stabilization and Access Act of 2020 (part of the Families First Coronavirus Response Act)
provides states with emergency funding and requires the following:
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Employers must provide notification
of the availability of unemployment compensation to employees at the time of separation. The Department of Labor will be providing model language for this notification.
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To receive the funding,
states must demonstrate that they have taken or will take steps to ease eligibility requirements and access to unemployment compensation for claimants, including
waiving work search requirements and the waiting week, and non-charging employers directly impacted by COVID-19 due to an illness in the workplace or direction from a public health office to isolate or quarantine workers
.
Many states have already amended their unemployment insurance practices to provide benefits to employees who have been negatively impacted by COVID-19 mitigation efforts. For example, in
Florida
,
individuals who may be eligible for unemployment compensation include:
—
Those who are quarantined
by a medical professional or a government agency.
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Those who are laid off or sent home
without pay for an extended period by their employer due to COVID-19 concerns.
—
Those who are caring for an immediate family member
who is diagnosed with COVID-19.
Check your state UI agency website for the latest information about benefits eligibility for any employees impacted by COVID-19 mitigation efforts (e.g., layoffs, furloughs, reduction of work hours, and extended leaves).
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Financial Assistance on Deck
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After passing the
Families First Coronavirus Response Act
late yesterday, the Senate began crafting a third coronavirus bill that could include direct payments to individual Americans and
small businesses affected by government containment policies
.
This financial assistance bill could cost in excess of $1 trillion and is expected to be finalized by early next week. Small business owners with cash flow challenges and concerns about providing the newly required paid sick leave benefits are anxiously awaiting passage of the third bill.
Our hope is that Congress will move quickly to approve payments that provide critically needed support to individuals and businesses.
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As a client of our firm, if you have questions about HR practices or solutions, state or federal employment regulations, or any other HR need, call or email our office for assistance.
Seawright & Associates
(407) 645-2433
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Jean Seawright
(407) 645-2433 x 14
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Jean Martin
(407) 645-2433 x 12
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The information in this bulletin and in any attachments is for general purposes only. Please speak with a Seawright & Associates consultant about your specific needs before taking any action. Seawright & Associates does not engage in the practice of law. Information in this bulletin is not intended to be legal advice. Should you wish to have a legal opinion, we recommend that you speak with a qualified attorney.
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