As I write this, the past month feels like we’ve all been thrown down a bizarre rabbit hole, and we’re trying to make sense of the incomprehensible. For management, trying to understand the complicated web of recent emergency leave laws only adds to the chaos. One thing for sure: There’s no shortage of acronyms.
Below I’ll try to summarize the key points of the “alphabet soup” recently enacted by Congress. The emergency leave laws are convoluted, so I apologize in advance if the explanation seems complex. Boiled down to their essence, though, the emergency laws will require most employers to provide paid leave to employees for COVID-19-related reasons, although some reimbursement for the paid leave should be available in the form of tax credits.
There are many scenarios under which an employee could be entitled to federal emergency paid sick or family leave under the recent laws, as well as under similar state laws. Below are just a few examples:
- A shutdown order that prevents employees from working if they are unable to telework
- A shutdown or quarantine order relating to schools or daycare centers that now requires employees to care for their children, making them unable to telework
- An actual or suspected diagnosis of COVID-19 for the employee or the employee’s family member
- An employee is advised by a healthcare provider to self-quarantine
With that in mind, let me identify the recent laws that we’re talking about. The Families First Coronavirus Response Act (FFCRA) went into effect on March 18. That law contained an Emergency Paid Sick Leave Act and an Emergency Family and Medical Leave Expansion Act.
Twelve days later, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was enacted, which modifies federal leave laws (including the ones that were just passed).
Collectively, these laws require covered employers (certain public employers, and private employers with fewer than 500 employees) to give their employees paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. Under certain circumstances, a private employer with fewer than 50 employees may be excluded from the provisions of the emergency leave laws. (If you need details about the exclusions, just e-mail me.)
The leave provisions are temporary. They expire on December 31, 2020. They generally require covered employers to provide eligible employees with the following:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined by law, or experiencing COVID-19 symptoms and seeking a medical diagnosis.
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work, due to the need to care for someone subject to quarantine, or to care for a child whose school has been closed for reasons related to COVID-19.
The CARES Act expanded family and medical leave to certain employees who were laid off or terminated after March 1, 2020, but who are re-employed by the same employer before December 31, 2020.
Emergency Paid Sick Leave Act
Under the Emergency Paid Sick Leave Act, which I’ll call PSL, covered private employers must provide eligible full-time employees up to two weeks (up to 80 hours) of paid sick leave. The leave must be paid at an employee’s full pay, up to a specified cap. PSL applies regardless of how long the employee has worked for the covered employer. (Exclusions apply for employees who are health care providers and emergency responders).
An employee is eligible for such paid sick leave when the employee is unable to work, including unable to telework, because the employee is: (1) quarantined due to a Federal, State, or local government quarantine or isolation order related to COVID-19; (2) self-quarantined based on the advice of a health care provider due to concerns related to COVID-19; or (3) experiencing COVID-19 symptoms and seeking a medical diagnosis. An employee who takes paid leave for any of these reasons must be paid at the greater of the employee's regular rate of pay or the applicable federal, state, or local minimum wage, up to $511 daily and $5,110 in total over the entire two-week period.
PSL also requires employers to provide two weeks (up to 80 hours) of paid sick leave at partial pay, up to a specified cap, when the employee is unable to work because he or she is caring for someone who is subject to quarantine order, who is self-quarantined, or who is caring for a child whose school or place of care is closed, among other reasons. An employee who takes paid sick leave for any of these qualifying reasons under PSL is entitled to be paid two-thirds of the greater of either (A) the employee's regular rate of pay or (B) the applicable federal, state, or local minimum wage. The cap is $200 daily and $2,000 total over the entire two-week period.
Part-time employees are generally entitled to paid sick leave up to the average number of hours worked over a two-week period. In other words, an employer must generally calculate hours of leave based on the number of hours the employee is normally scheduled to work.
Significantly, an employer may not require an employee to use other paid leave provided by the employer, including under any established Paid-Time Off policy, before the employee uses the paid sick leave permitted under PSL. There are also notice posting requirements that covered employers must follow.
Emergency Family and Medical Leave Expansion Act
I’ll call this the “Emergency Leave Expansion” law. Emergency Leave Expansion is a type of FMLA leave that’s available for certain eligible employees between April 1, 2020, and December 31, 2020. Under Emergency Leave, covered employers (those private employers with fewer than 500 employees) must permit eligible employees to take up to twelve weeks of expanded family and medical leave, ten of which must be paid at partial pay, up to a specified cap, for reasons related to COVID-19. The qualifying reasons for such leave are a need “to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”
Emergency Leave Expansion applies to employees of covered employers if such employees have been employed by the same employer for at least 30 calendar days. Further, the Act includes employees who (A) were laid off or otherwise terminated by the employer on or after March 1, 2020, (B) had been employed by that employer for at least 30 of the prior 60 calendar days, and (C) were later rehired or otherwise reemployed by the same employer. (Exclusions apply for employees who are health care providers and emergency responders).
Of the total twelve weeks of leave, the first two weeks (usually ten workdays) of this leave under Emergency Leave Expansion are unpaid. However, the employee may substitute paid sick leave under PSL (discussed above) or paid leave that the employee has under the employer’s pre-existing PTO policy for these two weeks of unpaid leave. The following period of up to ten weeks of expanded family and medical leave must be paid leave under Emergency Leave Expansion at two-thirds the employee's regular rate of pay.
For each day of leave, the employee receives pay based on the number of hours the employee would otherwise be normally scheduled to work. Special rules may apply to employees with varying schedules. An eligible employee may choose to use, or an employer may require that an employee use, such expanded family and medical leave concurrently with any leave offered under the employer's existing leave policies that would be available for the employee to take to care for his or her child, such as vacation or personal leave, or paid time off. The total Emergency Leave Expansion payment per employee for this ten-week period (that follows the initial two-week unpaid leave period) is capped at $200 per day and $10,000 in the aggregate, for a total of no more than $12,000 when combined with two weeks of paid leave taken under PSL. In other words, an employee may be eligible for leave under both Emergency Leave Expansion and PSL, but only for a total of twelve weeks of paid leave. If an employee takes paid sick leave under PSL during the first two weeks of unpaid expanded family and medical leave, that employee will not receive more than $200 per day or $12,000 for the twelve weeks that include both paid sick leave and expanded family and medical leave. (Seriously, could they have made this any more complicated?)
Under Emergency Leave Expansion, if the need for expanded family and medical leave is foreseeable, employees must provide employers with notice of the leave as soon as practicable. Emergency Leave Expansion defines conditions under which employees who take leave are entitled to be restored to their positions. However, employers with fewer than twenty-five employees are exempted from this requirement under certain circumstances. The FMLA's general prohibitions on interference with rights and discrimination, and the FMLA's enforcement provisions, apply for purposes of Emergency Leave Expansion. The one exception is that an employee's right to file a lawsuit directly against an employer does not extend to employers who were not previously covered by the FMLA.
Some good news for management: Covered private employers are eligible for reimbursement of all qualifying paid sick leave wages and family and medical leave wages paid to an employee who takes leave under either the PSL or Emergency Leave Expansion, or both, up to per diem and aggregate caps. Employers are also eligible for reimbursement of allocable costs related to the maintenance of health care coverage under any group health plan while the employee is on emergency leave. These reimbursements are through tax credits as administered by the Department of the Treasury. (Check with your accountant.)
Importantly, where the FFCRA and COVID-19-related state laws overlap, the federal law applies. However, to the extent the applicable state law gives employees additional benefits beyond what the federal law permits, the state law applies.
New Jersey Amendments to Paid Leave Entitlements in Addition to FFCRA Leave
On March 25, 2020, New Jersey Governor Phil Murphy signed S2304, amending the New Jersey Earned Sick Leave Law, the New Jersey Family Leave Act, and the New Jersey Temporary Disability Benefits Law. The amendments expand an employee’s ability to take leave and collect temporary disability benefits during epidemic-related emergencies.
An employee can use accrued Earned Sick Leave for COVID-related reasons, such as testing positive for the disease or having to care for a child for reasons related to the pandemic. As you may know, as of October 2018, New Jersey employers were required to provide full-time, part-time, and temporary employees with up to 40 hours of earned sick leave per year to care for themselves or a loved one. An employer’s PTO policy must allow an employee to use all the PTO for reasons covered by the new Earned Sick Leave Law. Also, an employee may be entitled to benefits under New Jersey’s Family Leave Insurance law. Finally, if an employee exhausts all of his or her sick leave and still cannot return to work, the employee may apply for unemployment or temporary disability insurance. Some New Jersey workers will also be eligible for job-protected medical leave under the FMLA.
If you feel dizzy after reading all this: Don’t worry, it’s a natural reaction. Be patient, work with your counsel, your HR people, and your accountant, and remember that every day that passes brings us one day closer to the end of this situation.
Stay safe and healthy.