What Employers Need to Know About the Families First Coronavirus Response Act

In response to the coronavirus of 2019 (COVID-19), President Trump signed the Families First Coronavirus Response Act, H.R. 6201, into law on March 18, 2020.  The Act provides various forms of relief including free COVID-19 testing, expanded food assistance and unemployment benefits, and requires employers to provide additional protections for healthcare workers.  Additional bills are pending and likely to be finalized and provide additional relief.

Significantly, the Act also requires employers with fewer than 500 employees to provide paid sick leave and expanded family leave for employees.  Employers with 500 or more employees are not subject to these requirements.

The key employment-related provisions of the bill are summarized below.  These provisions will become effective within 15 days (April 2, 2020) – employers must act promptly to ensure that their policies comply with these new requirements.

Emergency Paid Sick Leave

Under the Act, employers with fewer than 500 employees will be required to provide paid sick leave to any employee who is:

  • subject to a coronavirus quarantine or isolation order or who has been advised by a health care provider to self-quarantine due to coronavirus concerns;
  • experiencing symptoms of coronavirus and is seeking a medical diagnosis;
  • providing care for a family member who is self-isolating due to a diagnosis of coronavirus, experiencing symptoms of coronavirus and needs to obtain medical diagnosis or care, or quarantining due to exposure or exhibition of symptoms; or
  • caring for a child whose school or place of care is closed, or the child care provider of the child is unavailable, due to coronavirus.

Full-time and part-time employees are eligible for paid leave under the Act.  Full-time employees are to receive 80 hours of sick leave, and part-time workers are entitled to leave equal to the number of hours they work, on average, over a 2-week period.

The amount of pay employers are required to provide under the Act depends on the reason for an employee’s leave.  Employees taking leave for themselves must be paid at their regular rate up to a cap of $511 per day and a total $5,110.  Employees taking leave to care for a family member must be paid at two-thirds of their regular rate, with a cap of $200 per day and a total of $2,000.

Notably, the sick leave required under the Act must be provided in addition to any paid leave already provided by employers.  Employers cannot require a worker to use any other available paid leave before using the sick leave required under the Act.

Finally, employers will be required to post a new notice containing information regarding the emergency sick leave provisions of the Act.  The U.S. Department of Labor will create a model notice within the next week.

Emergency Family and Medical Leave Expansion

In addition to the new paid sick leave obligations, the Act amends the Family and Medical Leave Act (FMLA) and requires that employers with fewer than 500 workers must provide up to 12 weeks of family and medical (FML) leave for employees unable to work or telework because they have to care for a child if the child’s school or place of care has been closed, or if the child care provider of that child is unavailable due to a coronavirus emergency.  To be eligible for FML leave under the Act, employees must have been employed for at least 30 days.

Under this provision, the first 10 days of leave may be unpaid, although a worker may choose to use accrued vacation days or other available medical, sick or PTO leave for those days.  After the initial 10 days, workers on FMLA leave must be paid at two-thirds of their regular rate. The paid leave under this provision is capped at $200 per day and $10,000 in total.

In most cases, as required by the existing FMLA leave requirements, the new expanded FML leave under the Act is job-protected and an employer must return the employee to the same or equivalent position upon their return to work.  The Act, however, provides an exception for employers with less than 25 employees if (1) the employee’s job no longer exists due to economic conditions or other changes in the employer’s operating conditions caused by the coronavirus pandemic, and (2) the employer makes reasonable efforts to restore the employee to an equivalent position.

Potential Exemptions

Importantly, under the Act, the Secretary of Labor is authorized to issue regulations exempting: (1) certain health care providers and emergency responders from paid leave benefits, and (2) small businesses with fewer than 50 employees from the newly added paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a growing concern.”

Employer Tax Credits

The Act provides for a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA.  Specifically, employers will be entitled to a refundable tax credit equal to 100 percent of qualified sick or family leave wages required by the Act.  These tax credits will be allowed against the employer portion of Social Security taxes; however, if the credit exceeds the employer’s total Social Security taxes for all employees for any calendar quarter, the excess credit will be refundable to the employer.

Next Steps for Employers


Promptly review the Act, which is available here.  Employers need to assess which provisions are applicable to them and determine how to comply.  There will be new regulations and additional legislation in the near future, so it is essential to stay on top of these developments.  We are closely monitoring these matters and will provide updates.

 

Please contact either John Clifford at FortneyScott (jclifford@fortneyscott.com) or your FortneyScott attorney on how these changes affect your company’s compliance obligations.

FS Lunch & Learn: Coronavirus and the Workplace

Coronavirus:  It’s coming to your business. How will it impact your workers and workplace?  Understanding your employment law obligations is essential for working through this evolving emergency.  Join us on March 12 at 12:00 noon (Eastern) for a timely Lunch & Learn webinar to discuss responding to this outbreak.

In the webinar, we will address the following key considerations:

  • Employee health and safety in the event of a local outbreak, including obligations under the OSH Act
  • Re-evaluating your policies, including sick leave, PTO, and telecommuting
  • Complying with Federal and state leave and accommodation obligations, e.g., ADA, FMLA
  • Avoiding harassment and stigmatization
  • Understanding your collective bargaining obligations
  • Addressing employee travel and business plans
  • Establishing and implementing a communications protocol

Join FortneyScott attorneys, David Fortney, Burton Fishman, and Nita Beecher for a complimentary webinar.  CLICK HERE to register.

Agencies to Post All Guidances by February 28

Pursuant to an Executive Order  “Promoting the Rule of Law Through Improved Agency Guidance Documents,” issued by Pres. Trump four months ago, all federal agencies must post all their Guidances – of any kind—on a searchable website by February 28. Because of the breadth of the EO, “Guidances” can include a wide variety of writings beyond what are commonly regarded as statements of an agency’s policies or practices,  e.g., letters, adjudication decisions, or even press releases. The Department of Labor stated it will meet the deadline.

The Office of Information and Regulatory Affairs, a small agency within OMB that will oversee this effort, has told agencies that all guidance documents must be machine readable and able to be indexed and searched by commonly used commercial search engines. Most significantly, and in keeping with the most important aspect of the EO, OIRA reminded agencies that they must include a clearly visible note stating that guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract.

NLRB Issues Joint-Employer Regulation

On February 25, 2020, the National Labor Relations Board (“NLRB”) issued its long-awaited Joint–Employer Regulation. The rule adopted anticipated standards, mandating that to be a joint-employer, a business must “possess and exercise . . . substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees.” Further, the NLRB defines those essential terms as: “wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.” The new rule will deeply reduce the liability of franchisers and other large users of contracted workers for unfair labor practices and significantly limit opportunities for company-wide union organizing.

New Nominations to EEOC and NLRB

President Trump is expected to nominate DC lawyer, Andrea Lucas, and re-nominate Labor Department official, Keith Sonderling, for Republican seats on the Equal Employment Opportunity Commission, and civil rights attorney, Jocelyn Samuels, for a Democratic seat.  This will return the Commission to full membership.

The White House will also name former NLRB member Lauren McFerran (D) and current member Marvin Kaplan (R) for new, five-year terms on the NLRB.

These nominations will retain Republican majorities on both independent bodies but do not appear intended to affect the high-level of partisan discord on them.

The EEOC’s Component 2 Has Been Closed

The Equal Employment Opportunity Commission’s initial attempt at a uniform collection of race and gender pay data from U.S. businesses has been closed by Judge Tanya S. Chutkan of the U.S. District Court for the District of Columbia. The Judge’s Order was issued today, February 10, 2020. Nearly 90% of employers have submitted data to the EEOC.

The Order ends what had a been a controversial and chaotic process – known as Component 2 of the EEO-1 – which required employers to submit aggregated compensation data to the EEOC. The stated goal was to address the “pay gap” for women and minorities, but debate continues as to the efficacy of the data and the ability of the agency to put the data to a meaningful use. Questions about the security of the data have not ceased.

The EEOC must file a final status report on February 14, 2020 and must retain all the submissions as required by federal law governing records retention. However, both EEOC and OMB are pursuing their appeals, challenging Judge Chutkan’s decisions requiring that the agency continue collecting data beyond its original period.

House Passes Sweeping Pro-Labor Bill

The Democratic majority in the House of Representatives passed the most far-reaching reform of U.S. labor laws since the 1930’s: The Protecting the Right to Organize Act (the “PRO Act”) (HR 2474). In what is clearly designed as a “template” for what a Democratic Administration would enact, the PRO Act includes provisions intended to assist unions in organizing, winning, and securing a labor agreement.

The main provisions of the PRO Act would:

  • Allow “card-check” certifications in which unions need only collect signatures from a majority of workers to form a unit and bypass the current secret-ballot process;
  • Curtail employers’ power to dissuade workers from forming unions;
  • Subject businesses to fines if they suppress worker organizing;
  • Allow “secondary” boycotts, in which workers disrupt their employer’s operations by interfering with suppliers, clients, and other related firms;
  • Outlaw “right-to-work” laws, which let union-represented workers withhold dues, in 27 states (Passed on 2/6/20);
  • Prohibiting lockouts; and
  • Allow workers to circumvent the NLRB and go to federal courts to adjudicate labor disputes.

This controversial Bill split the normally partisan House, with members of both parties voting for and against it. The Bill has little chance of passing the Senate and the President has already announced he would veto the Bill should it make it to his desk.

OFCCP Director Leen to be Nominated for OPM Inspector General

In an unanticipated move, President Donald J. Trump announced on Monday, February 3, 2020 his intent to nominate Craig E. Leen as Inspector General for the Office of Personnel Management (OPM). Leen has been Director of the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) since December of 2018. Leen came to OFCCP as a Senior Advisor in November of 2017 and became Acting Director of the agency in July of 2018, and was named as Director thereafter.

Prior to his work at OFCCP, Mr. Leen was the City Attorney of Coral Gables, Florida. This story is developing and FS will update as more information is available.

DOL Joint-Employer Rule: What Employers Need to Know

Wednesday, February 5, 2020
Noon – 1:00 p.m. EST

The Department of Labor has issued its Rule on Joint Employer status, setting out the government’s position on this controversial issue.

Join subject-matter experts Nita Beecher and Burt Fishman from FortneyScott for a free, hour-long webinar as they discuss what employers need to know about the new Rule, including:

  • The 4 criteria to determine Joint Employer status;
  • The role of “reserved rights”;
  • The decrease of liability on franchisors and “the gig economy”;
  • Additional Joint Employer rules on the horizon; and
  • The next steps from Congress and the States in this volatile debate.

Register for this complimentary webinar here.

 

Department of Labor Issues Final Joint Employment Rule

On Monday, January 13, 2020 the Department of Labor issued its joint employment rule which will be effective on March 16, 2020. The rule adopts a four-part test for assessing whether a company is the joint employer of another company’s employees. The test – which reflects the rule prior to the Obama Administration – considers whether the alleged joint employer hires or fires; supervises or controls work schedules; sets pay rates; and, maintains employment records. According to DOL, the fact that the alleged joint employer has the right or ability to exercise any of the four factors is relevant but not conclusive. Instead, whether the employer actually uses the authority is more relevant to determining joint employment status. The rule thus establishes stiff criteria before franchisers and their franchisees will be found jointly liable for compliance with federal wage and hour laws.

FortneyScott is reviewing the final rule which is scheduled to be published on January 16, 2020 and will provide a more detailed analysis soon. Contact your FortneyScott lawyer for more information.