MARCH 18 UPDATE:
Negotiations are continuing on a Federal relief bill. Updated reasons for leave under the Sick Leave Act are now:
- the employee is subject to a Federal, State, or local quarantine or isolation order
- the employee has been advised by a health care provider to self-quarantine
- the employee is experiencing symptoms of COVID-19
- the employee is caring for an individual who is either been ordered to isolate or self-quarantine
- the employee’s child’s school has shut down
Beginning over the past weekend and continuing into late Monday night, the U.S. House of Representatives passed and then amended emergency legislation in response to the COVID-19 coronavirus pandemic. The Senate is expected to take action on the bill, the Families First Coronavirus Response Act, this week, but the governmental response remains fluid. Employers should carefully monitor legislative updates in the coming days.
If signed into law, the bill will implement sweeping nationwide changes to employer paid sick leave plans, family leave plans, and unemployment insurance eligibility. Employees impacted by the coronavirus would be entitled to paid leave and unemployment benefits. Employers would receive relief for coronavirus-related paid leave through Federal tax credits.
Expanded Coverage of the FMLA for Family Leave Due to School Closures
The bill would amend the FMLA to cover all private-sector employers with less than 500 workers for certain COVID-19 related reasons. Generally, the FMLA’s current employer threshold covers all private employers with 50 or more employees, and all public employers regardless of employee count. Under this amendment to the FMLA, all public employers would remain covered employers, while smaller private employers who were not previously subject to the FMLA would become covered employers for employee leave related to COVID-19.
It is unclear at this time why the bill exempts employers with 500 or more employees. Congress may be contemplating separate legislation that would cover those entities.
Under the most recent version of the Congressional bill, employers covered by the amended FMLA will be required to provide up to 12 weeks of job-protected leave for employees who need to care for a child under the age of 18 if that child’s school or place of care has closed due to the pandemic.
Earlier versions of the House bill also provided protected FMLA leave for two additional reasons: (1) if an employee needed to provide care for a family member exhibiting coronavirus symptoms or had been ordered to quarantine, and (2) if the employee themselves was exhibiting symptoms or was ordered to quarantine. Those provisions were removed by the House late Monday night. It is possible that the Senate or another House bill will revisit these particular reasons for leave under the FMLA.
The first ten days of leave taken to care for a child whose school has closed would be considered unpaid FMLA leave. However, employees would be allowed to use their accrued vacation and/or PTO leave during this time. More importantly, and as explained below in the section on the new Emergency Paid Sick Leave Act, full-time employees would be entitled to their full pay for up to 80 hours (two full working weeks, assuming 40-hour work weeks) for certain coronavirus-related leaves.
After the first ten days of leave, employers would be required to pay employees on coronavirus-related FMLA leave two-thirds of the employee’s usual rate of pay per week. Employees could, if they choose, elect to use accrued vacation and/or PTO time during that period. Pay would be capped at a maximum of $200 per day, and $10,000 in the aggregate.
A hallmark of the FMLA is its job-protection guarantees to employees. Employees who take leave pursuant to the FMLA are entitled to restoration to their position at the conclusion of the leave. The amended FMLA confirms that job restoration would be required for employees taking coronavirus-related FMLA leave, with some exceptions for employers with less than 25 employees.
Emergency Paid Sick Leave Act
The Congressional bill also enacts a new nationwide “Paid Sick Leave Act,” covering all private employers with fewer than 500 employees, as well as all public-sector employers. Covered employers would be required to provide “Paid Sick Time” for employees who:
- are self-isolating because the employee is diagnosed with coronavirus
- obtain a medical diagnosis if the employee is experiencing symptoms consistent with coronavirus
- have to comply with a quarantine order of their health provider or public official
- have to care or assist a family member who is self-isolating because the family member has been diagnosed with coronavirus, or, is experiencing symptoms and needs to obtain a medical diagnosis; or
- have to care for a child if the child’s school has closed.
Full-time employees would be entitled to 80 hours of leave, while part-time employees would be entitled to paid time equivalent to the average number of hours that they work in a 2-week period.
Employers with existing paid sick leave policies will be required to provide any accrued sick time in addition to the Paid Sick Time afforded to employees under the Paid Sick Leave Act.
Emergency Funding for Unemployment Insurance Benefits
The bill earmarks $1 billion in Federal emergency grant money to the states for use in unemployment benefits. Of that $1 billion, $500 million is designated for additional funding for states to immediately revamp their administrative procedures for applying-for and paying-out unemployment insurance benefits; the other $500 million would be reserved as emergency grant funding to states that experience a 10% increase in unemployment.
With temporary layoffs approaching quickly, New York State has already taken action to relax their eligibility rules regarding unemployment. Traditionally, laid-off employees were required to wait 7 days after their layoff to file for unemployment insurance; at this time though, the N.Y. State Department of Labor has waived the 7-day waiting period for those “who are out of work due to Coronavirus (COVID-19) closures or quarantines.”
Next Steps and Planning for Employers in New York State
The Federal bill will likely be voted on by the Senate in the coming week.
With the situation evolving rapidly, many employees may have already requested or made use of their employers’ existing PTO or vacation policies. Employers should take special caution to mark any leave taken by employees during this period, as this leave time could have retroactive implications on employees’ leave under the Congressional bill.
Apart from Federal action, employers in New York State should also carefully monitor developments at the state level. The New York State Legislature and Governor Cuomo are expected to take action on a statewide paid leave sick leave plan in the coming week.
Employers should also watch for guidance on the interaction of the amended FMLA and new Emergency Paid Sick Leave Act with the New York State Paid Family Leave Law (“PFL”), which covers virtually all private employers in the state. PFL similarly grants employees with paid, job-protected leave from work to care for a family member with a serious health condition. It does not, at this time, provide leave for employees to care for family members who have simply quarantined and are not in fact sick, nor does it cover leave taken for an employee’s own serious health condition. That too may be taken up by the State Legislature in the coming days.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.