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Analysis of COVID emergency law and what it means for employers

We are in the midst of a pandemic crisis that we have never experienced before. It is complicated by our governments lack of preparation and the dearth of testing methods to determine if a sick person has COVID or some other less serious disease.

On March 18, Congress passed the families first coronavirus response act. It includes several provisions that employers need to implement as soon as possible. It takes effect on April 2. This is a summary of those requirements.

1) Emergency FMLA Expansion Act; Congress amended the family medical leave act to cover people who cannot work because of the coronavirus. This includes people who cannot work because of their children’s schools were closed as well as people who are sick as well as people who are quarantined. In my opinion it covers anyone impacted by the coronavirus pandemic that cannot come to work.

2) Congress distinguished the coronavirus epidemic from other situations covered by the FMLA.
Specifically, the FMLA ordinarily only covers employees who have been with the company at least a year. However, this emergency expansion act covers anyone affected by the coronavirus who has been employed for at least 30 days. Another distinction between general FMLA coverage and COVID-related leave is that this law covers all Employers with 500 or less employees while FMLA coverage is for Employers of 50 or more. This means that very small employers are required to pay the same sick leave as large employers. The new law gives the secretary of labor the ability to exempt employers with less than 50 employees when doing so would jeopardize the viability of the business . Until the Secretary does so, all employers should assume they are obligated to comply.

3) The law requires employers to pay sick leave to employees out of work due to any COVID related absence ( including the reasons described in 1 above) as follows: a) first 10 days, no obligation to pay; b) after 10 days, pay 2/3rds of normal pay but in no event more than $200 per day; c) it is employee’s choice whether they get paid any accrued unused leave during the 10 day waiting period or go unpaid; employers cannot require exhaustion of accrued leave and vacation before getting this mandated pay; and d) the obligation to make these payments continues week to week until the Employee has been paid $10,000.

4) The law requires Employers to hold the position for the Employee and reinstate them to work when they are able to return but it does afford more flexibility to employers with less than 25 employees. For those smaller employers there is an exception to reinstatement if the job was eliminated due to the economic impact of the coronavirus. Even then, employers must make reasonable efforts to Restore the employee to an equivalent position and it must keep the employee on a recall list for one year after the earlier of the date on which the public health emergency concludes or 12 weeks after the date on which the employee started leave.

5) Congress does not expect employers to pay this out of their own pocket. Rather, these mandated benefits are to be reimbursed 100% to the employer through tax credits. Specifically, the employer will get a credit on its Social Security match up to 100% of the cost of paying the leave. If there is insufficient Social Security match to fund the full payments, the law allows the employer to get a refund from the IRS. This reimbursement method applies to both the FMLA expansion act and the emergency paid sick leave act described below.

6) This legislation included the Emergency Paid Sick Leave Act which also guarantees sick pay for employees who cannot work due to COVID-related absences but is limited to 80 hours pay for full-time employees and the average number of hours worked per week by part-time employees in the 2 week period.

7) This law prohibits employers from requiring employees to find a replacement in order to get paid sick leave and it also forbids Employers from requiring the use of existing accrued leave before taking the Emergency Paid Sick Leave.