COVID-19 and the “Families First Coronavirus Response Act”: what US employers should know

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2020-04-02

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US Public Law 116-127, the “Families First Coronavirus Response Act,” went into effect on April 1, 2020.  The Act, which is federal law, provides employees of private employers with fewer than 500 employees and some public employees with paid sick leave, free COVID-19 testing, expanded food assistance and unemployment benefits, and increased Medicaid funding. Employers may claim benefits paid to employees as tax credits.  Below, we summarize aspects of the Act of particular interest to US employers. Following our summary, we answer questions about employee rights to paid and unpaid leave due to illness or childcare under the Act and other federal and state laws; whether an employer may terminate an employee on public health emergency leave; an employer’s legal obligation to protect its employees from COVID-19 in the workplace; and what the law requires when an employee tests positive for COVID-19.

Emergency Paid Sick Leave 

Pursuant to Division E of the Act, referred to as the “Emergency Paid Sick Leave Act,” a full- time employee who has been employed at least 30 days is entitled to up to 80 hours of paid sick time, available immediately, if the employee is unable to work (including “tele-work”) because he or she:

  • Is subject to a federal, state, or local quarantine or isolation order related to COVID-19; or
  • Is experiencing COVID-19 symptoms and is seeking a medical diagnosis; or
  • Has been advised by a health-care provider to self-quarantine; or
  • Is caring for an individual who is subject to governmental or self-quarantine; or
  • Is experiencing a “substantially similar circumstance” related to COVID-19, as specified by the Department of Health and Human Services.

Qualified part time employees are entitled to emergency paid sick leave for the number of hours the part-time employee would work during an average two-week period. 

An employee may collect emergency paid sick leave before he or she uses other paid leave (that is, an employer cannot make an employee use vacation or sick time before the employer will pay emergency paid sick leave).  The employer is not required to pay an employee for unused emergency paid sick time if the employee resigns, retires or is terminated (an employer need not continue to employ an employee who is on emergency paid sick leave).  However, under the Emergency Paid Sick Leave Act, an employer may not retaliate against any employee who takes emergency paid sick leave.  

Employees taking emergency paid sick leave are to be paid their regular rate of pay, up to $511 per day and $5,110 in the aggregate (over a 2 week period).

Public Health Emergency Leave to Care for a Child

Employers of fewer than 500 workers must provide up to 12 weeks paid leave through December 31, 2020 to a full time employee who cannot work because the school or child-care provider of that employee’s child is, as a result of the health emergency, closed.  A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that 12 week period. Leave is available immediately (previous employment for a specified period of time is not a precondition). A business with fewer than 50 employees may claim an exemption if providing leave would jeopardize the viability of the business.

An employee taking leave to care for a child shall be paid at two-thirds his or her “regular rate of pay” or two-thirds of the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave). Employers need not pay an employee for the first ten days of public health emergency leave (the employee may, but need not, use accrued paid leave during that ten day period).

Holding Open the Job of an Employee on Public Health Emergency Leave

Employers are generally required to restore an employee’s former position, or to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment, following the use of public health emergency leave. An employer that (1) has fewer than 25 workers, and (2) has made reasonable efforts to retain the employee’s position, but the position no longer exists due to economic conditions caused by the public health emergency, is exempt. 

Employers may not discharge, discipline, or otherwise discriminate against any employee who takes paid sick leave under the Families First Coronavirus Response Act or files a complaint or institutes a proceeding under or related to the Act.

Tax Credits for Employers

Covered employers may take a credit against payroll taxes for 100% of the employer-paid qualified sick leave wages paid each quarter, subject to the dollar limits and time period caps.  Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. 

Coverage for Testing with no Deductible

Division F, Health Provisions, of the Act requires private health insurers to cover testing for COVID-19 without a deductible, coinsurance or copay for the duration of the public health emergency.  Medicare, Medicaid and the Children’s Health Insurance Program are also required to pay for 100% of COVID-19 testing

Common Questions:

Q:       Are employees who can’t work because of a state stay-at-home order entitled to paid sick leave under the Act?

A:       Yes, so long as the employee is unable to perform his or her job due to the stay at home order. Employees who are well and able to work remotely are not entitled to paid sick leave.

Q:       Can an employer subject to the Act fire an employee who is on emergency paid sick leave or public health emergency leave?

A:       Unclear. Employers may not discharge any employee who takes leave under the Act and files a complaint or institutes a “proceeding” to enforce the Act (i.e., the Act does not stop an employer from firing an employee who takes leave and has not filed a complaint or “proceeding”). The Act also requires employers with more than 25 employees to restore the employee to his or her former position, or to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment, following the use of emergency leave. Employers of 25 or fewer are exempt if the employee’s position no longer exists due to economic conditions caused by the public health emergency and it has made “reasonable efforts” to restore the employee to an equivalent position.

Congress appears to have anticipated that some employers might fire employees because they took leave, using a business downturn as an excuse. Only employers of 25 or fewer employees may eliminate the position of a “leave employee” for “economic conditions.” What if a company of 26 employees cannot afford to restore the “leave employee” to his or her former position: the company has reduced its workforce in order to survive? What if the company has, during the period of leave, closed its doors due to those economic conditions? Can an employer terminate an employee the day after he or she returns from emergency leave for economic reasons? Will a business that has closed its doors and is winding up affairs owe employees on leave the pay they would have earned had the business not closed?

Some employers, anticipating the financial burden of paying leave and holding the position of the employee on leave, reduced their workforce before the Act took effect. Others are forced to decide whether to terminate employees who have not requested but may request emergency leave.   

Q:       Does an employee have to provide a doctor’s note to claim sick leave under the emergency leave act?

A:       The Act does not condition leave on providing a doctor’s note, but contemplates a medical diagnosis of illness: employees eligible for paid sick leave are those who are experiencing COVID-19 symptoms and are seeking a medical diagnosis or have been advised by a health-care provider to self-quarantine. As a practical matter, it is likely to be difficult for an employee to obtain a doctor’s note before sick leave will begin. It would be reasonable for an employer to ask an employee who requests paid sick leave to state, in writing, the reason why leave is requested; and the name of the health provider who has advised self-quarantine, or who the employee will seek a medical diagnosis from, if either is the stated reason.

Q:      Do companies that employ 500 or more persons (and are therefore not subject to the Act) required to provide extended sick leave (in excess of days allowed by company policy)? Must those companies pay extended sick leave?

A:       Companies that employ 500 or more persons are subject to the federal Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq. (known as “the FMLA”). Under the FMLA, an employee may take up to 12 weeks of unpaid, job-protected leave, with continuation of group health insurance coverage, for specified family and medical reasons; among them, a “serious health condition” (an illness, injury, impairment, or physical or mental condition that involves inpatient care or continuing treatment by a health care provider) that makes the employee unable to perform the essential functions of his or her job; or caring for a spouse, child or parent with a serious health condition. The employee must have been employed for 12 months (need not be consecutive) prior to the start of leave and have worked no fewer than 1,250 hours during the 12 month period. Other conditions of eligibility may apply.

In addition, state law or city regulation may entitle an employee to paid or unpaid leave. For example, under the New York City “Safe and Sick Leave Law,” employers of 5 or more must provide employees with up to 40 hours of paid leave, at the employee’s regular hourly rate, for the employee’s personal care and treatment, or for the care and treatment of a family member.

An employer should review the laws of the state and city in which a particular employee works.  Local laws may provide benefits in addition to those under the FMLA or the Families First Coronavirus Response Act.  

Q:       Does an employer have to pay an employee who is able to work from home, but there is not enough work for them to do?

A:       No. If the employee is “at will” (is employed at the employer’s discretion), the employment relationship may be terminated for any non-discriminatory or non-protected reason (that is, an employee cannot be terminated based on a protected characteristic such as age, race, gender, etc.; and state law may prohibit discharge when the employee has complained to a government agency about a condition of employment, work the employee was directed to perform that the employee reasonably believed was illegal, or for other reasons). However, an employer is not obligated to pay or to continue to employ an employee when there is not enough work for the employee to do.

Q:       Can an employer require an employee to use paid time off (“PTO”) if the employee is at home and not working?

A:       Yes, so long as the reason the employee is not working is something other than illness caused by COVID-19. Under the Families First Coronavirus Response Act, an employee who is unable to work due to having contracted the virus, or is experiencing COVID-19 symptoms and is seeking a medical diagnosis, is entitled to 80 hours of paid sick time, available immediately, if the employee is unable to work (including “tele-work”). If the employee is home and not working because he or she is caring for a child whose school or child-care is closed/unavailable, the employee may, but need not, use PTO during the initial ten days of public health emergency leave (the employee may, but need not, use accrued paid leave during that ten day period).

Q:       Must an employer allow its employees to work from home if the work can be done from home?

A:       There is no such legal requirement.

Q:       What must an employer do to protect its employees from COVID-19 in the workplace? What if an employee tests positive for COVID-19?

A:       Under the Occupational Safety and Health Act of 1970, commonly known as “OSHA,” an employer must provide a workplace free of known health and safety hazards. 

The U.S. Centers for Disease Control and Prevention has developed interim guidance for businesses and employers to plan for and respond to COVID-19. The interim guidance is intended to help prevent workplace exposures to acute respiratory illnesses, including COVID-19. The guidance also addresses considerations that may help employers prepare for more widespread, community outbreaks of COVID-19, in the event that this kind of transmission begins to occur. The guidance is intended for non-healthcare settings.

There is no specific OSHA standard covering COVID-19. However, some OSHA requirements may apply to preventing occupational exposure to COVID-19. Among the most relevant are:

  • OSHA's Personal Protective Equipment standards (in general industry, 29 CFR 1910 Subpart I), require using gloves, eye and face protection, and respiratory protection.                                                                                  
  • When respirators are necessary to protect workers, employers must implement a comprehensive respiratory protection program in accordance with the Respiratory Protection standard (29 CFR 1910.134).

There are OSHA recordkeeping requirements (29 CFR Part 1904) which mandate covered employers record certain work-related injuries and illnesses on their OSHA 300 log. COVID-19 can be a recordable illness if a worker is infected as a result of performing their work-related duties. However, employers are only responsible for recording cases of COVID-19 if particular conditions, listed on the Department of Labor website, are met.

In the case of an employee who is suspected of, or has tested positive for, COVID-19, the US Department of Labor recommends that persons suspected of having COVID-19 should immediately be isolated to a location away from co-workers, customers, and other visitors. The Department advises that because the transmissibility of COVID-19 from contaminated environmental surfaces and objects is not fully understood, employers should carefully evaluate whether work areas occupied by people suspected to have the virus may have been contaminated and may need to be decontaminated. The Department of Labor further advises that outside of healthcare and death care facilities, there is typically no need to perform special cleaning or decontamination of work environments when a person suspected of having the virus has been present, unless those environments are visibly contaminated with blood or other body fluids. 

Each state may have its own rules (mandatory) or guidelines (recommended) for prevention of disease transmission. For example, the California Division of Occupational Safety and Health (Cal/OSHA) Aerosol Transmissible Diseases (ATD) standard is aimed at preventing worker illness from infectious diseases that can be transmitted by inhaling air that contains viruses (including COVID-19), bacteria or other disease-causing organisms. While the Cal/OSHA ATD standard is only mandatory for certain healthcare employers in California, it may provide useful guidance for protecting other workers exposed to COVID-19.