Expanded Employee Benefits due to COVID-19: What California Employers Need to Know

On March 18, 2020, President Trump signed a wide ranging expansion of employee benefits into law in response to the COVID-19 outbreak. Affected employers must be prepared to implement the Act’s leave programs on or before April 2, 2020.

Expansion of FMLA Leave

The Act amends the Family and Medical Leave Act (“FMLA”) to provide for as many as 12 weeks of job-protected leave for employees who are unable to work (or telework) because they must:

  • Care for a son or daughter under 18 years of age if the school or place of care for the child has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency. 

Covered Employers:  Private employers with fewer than 500 employees, and most public employers.  For smaller employers, this bill could introduce FMLA coverage to their workplace.  There is language allowing regulations to exclude emergency responders and/or businesses with less than 50 employees where the requirements would jeopardize that business as a going concern.  But at this time, no such exclusions apply.

Employee Eligibility:  An employee who has been employed for at least 30 calendar days.  Note that this is a much lower threshold than the 12 month/1,250 hour tenure requirement that otherwise applies to FMLA leave.

Job Restoration:  The FMLA’s job restoration requirements generally apply, with limited flexibility for employers with fewer than 25 employees.

Paid Leave Requirement:  Unlike FMLA leave under the 1992 Act, leave lasting longer than 10 days must be paid at two-thirds an employee’s regular rate of pay.  In more detail:

  • The first 10 days of leave may be unpaid. During this unpaid 10 day period, an employee may elect, but cannot be required, to substitute any accrued vacation leave, personal leave, or medical or sick leave for the unpaid leave.
  • After 10 days of leave have been taken, the employer must provide paid leave. Paid leave must be an amount that is not less than two-thirds an employee’s regular rate of pay for the number of hours the employee would otherwise be normally scheduled to work; provided, however, that such paid leave is capped at $200/day.  Paid leave must continue until the qualifying condition no longer exists, or after twelve weeks of leave have been taken.  Finally, there is a $10,000 cap on the aggregate amount of paid leave paid to an employee.

Effective Date:  April 2, 2020.

Sunset:  The paid family leave requirement expires on December 31, 2020.

Emergency Sick Leave

Complementing the FMLA amendment, the Act requires emergency sick leave for employees who cannot work for any of the following reasons:

A. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

B. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

C. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;

D. The employee is caring for an individual who is either (1) subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

E. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions;

F. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Covered Employers:  Private employers with fewer than 500 employees, and most public employers.  There is language allowing regulations to exclude emergency responders and/or businesses with less than 50 employees where the requirements would jeopardize that business as a going concern.  But at this time, no such exclusions apply.

Employee Eligibility:  The full allotment of paid sick time provided for by the Act must be available for immediate use by an employee, regardless of how long the employee has been employed by the employer.

Allotment of Sick Leave:  For full-time employees, 80 hours.  For part-time hours, emergency sick leave is the number of hours an employee works, on average, over a 2-week period.

No Carryover:  Emergency paid sick time provided by the Act does not carry over from one year to the next.

No Payout at Termination:  Paid sick time not used at the time of an employee’s termination, resignation, or retirement does not need to be paid out to the employee.

May be Used Before Other Paid Leave:  Employers may not require an employee to use other paid leave provided by the employer to the employee before the employee uses paid sick time provided for by the Act.

Pay Rate:  Paid sick leave must be paid as follows:

  • At the employee’s regular rate, subject to a maximum of $511 per day and $5,110 in the aggregate for qualifying conditions (A), (B), or (C) described above.
  • At two-thirds the employee’s regular rate, subject to a maximum of $200 per day and $2,000 in the aggregate for qualifying conditions (D), (E), or (F) described above.

Effective Date:  The Act takes effect April 2, 2020. 

Penalties:  A non-complying employer will be in violation of the FLSA.

Sunset:  The emergency paid sick leave requirement expires on December 31, 2020.

Cost Mitigation: Tax Credits

To help offset the cost of paid leave, the Act provides for credits against quarterly payroll taxes imposed on the employer in an amount equal to 100 percent of the qualified family leave wages and paid sick leave wages paid by an employer, subject to the requirements of forthcoming Treasury Department regulations.

Key Takeaway

If you are an employer with fewer than 500 employees, you are likely going to be required to provide paid leave to employees who are unable to work because of certain circumstances relating to the Coronavirus pandemic.  Employers should be prepared to implement these requirements in short order.  If you have any questions related to the expanded employee benefits and how to implement them quickly, contact Employment Law attorney Jerry Pearson at jpearson@youngwooldridge.com.

 

By | 2020-03-21T16:28:03+00:00 March 21st, 2020|Business Law, Employment Law, Jerry Pearson, Young Wooldridge|Comments Off on Expanded Employee Benefits due to COVID-19: What California Employers Need to Know
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