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Congress Passes Paid Leave Law: What Employers Need to Know

by Terah Moxley 

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act, which temporarily expands the Family and Medical Leave Act (FMLA) and calls for up to 80 hours of paid sick leave during the COVID-19 pandemic. This Act goes into effect on April 2, and both provisions offer leave benefits through the end of 2020. The Act also provides tax credits to employers that pay these benefits.

Covered Employers

Both provisions apply to private employers with fewer than 500 employees and to most public sector employers regardless of size. Thus, employers that have been below the usual 50-employee FMLA threshold now have to grapple with administering the FMLA under this temporary expansion. However, both provisions offer a possible exemption for small businesses with fewer than 50 employees if compliance would jeopardize the company’s viability. It is unclear at this point how this exemption will work, and the possible exemption under the paid sick leave provision is limited.

The FMLA expansion provides some additional relief for small companies. First, only employers covered by the “old” FMLA are subject to penalties in a suit brought by an employee for a violation of the leave entitlement granted by the expansion. Second, employers must typically restore an employee who used FMLA leave to the employee’s same position (or one that is substantially equivalent) on return from leave. However, the expansion offers relief from this requirement for employers with fewer than 25 employees under certain circumstances.

Covered Employees

The two leave provisions differ on the class of covered employees, but the status of both full-time and part-time employees is addressed. The FMLA expansion applies to employees who have been on the job at least 30 days (as opposed to one year under the standard FMLA). On the other hand, the paid sick leave benefits must be made available to employees immediately regardless of how long they have worked for the employer. Under both provisions, employers may exclude certain health care providers and emergency responders from these leave benefits.

Reasons Leave May Be Used

Employees may use the emergency paid sick leave when they are unable to work (even from home) for a number of reasons, including a need to comply with an isolation or quarantine order, caring for an individual under such an order, self-care when seeking a diagnosis when experiencing symptoms of COVID-19, or caring for their child whose school or daycare is closed due to the pandemic. The FMLA expansion is more narrow, offering up to 12 weeks of job-protected, partially paid leave only when an eligible employee cannot work (even from home) because the employee must care for the employee’s child (under 18 years old) when the child’s school or daycare is closed due to COVID-19.

Amount of Paid Leave

How much do employers have to pay out? Under the paid sick leave provision, covered employers must provide 80 hours of paid leave for full-time employees and paid leave for part-time employees equal to the average number of hours the part-time employee works over a two-week period. Generally, this leave must be paid at the employee’s regular rate of pay. However, if the employee requires leave to care for another individual (including the employee’s child in the case of school closure), the leave can be paid at two-thirds the employee’s regular rate of pay. The new law places the following caps on the amount that must be paid: 

  • $511 per day and $5,110 overall for leave needed for self-care; or
  • $200 per day and $2,000 overall for leave needed to care for another.

One important note, this emergency paid sick leave is in addition to leave already offered under an employer’s existing policy or leave that is mandated under local law, like the Dallas Paid Sick Leave Ordinance enacted in 2019 (for which enforcement begins on April 1, 2020).

Under the FMLA expansion, the first 10 days of leave may consist of unpaid leave, but an employee may elect to substitute any accrued paid leave during that time. After the first 10 days, an employer must provide paid leave of at least two-thirds of the employee’s regular rate of pay for the remainder of the leave period, subject to a $200 per day cap and a $10,000 cap overall.

While our collective “new normal” continues to change at a rapid pace, employers should carefully review their existing policies and implement new policies and procedures to comply with these new leave requirements, which both have anti-discrimination and anti-retaliation provisions. The Department of Labor should be issuing regulations to aid in the interpretation of these provisions, but the timing on what that will happen is unclear.

Terah Moxley is partner at Estes Thorne & Carr PLLC. She is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and can be reached at tmoxley@estesthornecarr.com.