Coronavirus Legislation Would Require Employers to Provide Paid Leave
In an attempt to address the effect of the COVID-19 pandemic on the nation’s workforce, the US House of Representatives passed legislation over the weekend addressing the COVID-19 pandemic. This legislation, which the Senate is expected to consider this week, has two key employment law impacts. Chambliss is monitoring the progress of this legislation and will provide further updates based on changes, if any, resulting from the Senate’s review. The proposed legislation is not final as of today.
Emergency Family and Medical Leave Expansion Act
First, the legislation would amend the Family and Medical Leave Act to provide up to 12 weeks of FMLA leave for employees of employers with fewer than 500 employees (the FMLA currently applies only to employers with 50 or more employees). Any employee who has been employed at least 30 days could use the leave for COVID-19 related reasons, including quarantine requirements/recommendations for themselves or a family member, or to care for a child whose school has been closed because of a public health emergency. Although the first two weeks of the leave could be unpaid (more on that below), the remaining leave would be paid at a rate that is at least two-thirds of the employee’s regular rate of pay. And employees could choose to substitute paid leave for the portion of leave that otherwise would be unpaid.
Emergency Paid Sick Leave Act
Second, the proposed legislation would require employers with fewer than 500 employees to provide full-time employees with 80 hours of paid sick leave for certain specific reasons related to COVID-19 (e.g., self-isolation, medical care, quarantine, child care, etc.). Part-time workers would also be entitled to paid leave based on their average normal work schedule. This paid leave would be in addition to employers’ existing paid leave policies, and employers would not be able to modify existing policies on or after the date on which the law becomes effective to avoid the additional paid sick leave.
Tax Credit for Paid Sick and Paid Family Leave
Employers extending COVID-19 related paid leave as required under the legislation would be eligible for tax credits covering, in part, the cost of the qualifying leave. The bill caps the amount of qualified leave wages taken for each employee at $511 per day. The credit would offset $200 per day of wages for employees who must care for a loved one or whose child is home because of a school or daycare closing. Other provisions may further limit the tax credit for some employers.
Since the tax credit will not provide immediate funding, the Treasury Department stated over the weekend that it would permit covered employers to use cash deposited with the IRS to pay sick leave wages and may provide other means of advancing funds to small businesses to cover these costs.
For many, the determination of whether the company employs fewer than 500 employees might be simple. But other organizations may be comprised of multiple entities that in the aggregate exceed the 500-employee threshold (even if none of the companies individually employs more than 500 employees). The proposed legislation does not directly address how to compute the number of employees in such situations. As a result, if the 500-employee threshold remains in the final legislation, the computation of the number of employees in an organization will be an important consideration for some employers.
As currently drafted, the law would become effective 15 days after final passage and would remain in effect through December 31, 2020.
This brief summary addresses the primary portions of the proposed legislation, but doesn’t detail the myriad legal implications that are sure to result. And, of course, there could very well be changes to the legislation after consideration by the Senate.
We are continuing to monitor this legislation and other legal implications of the COVID-19 pandemic. Please contact Justin Furrow, Jim Catanzaro, or your relationship attorney if you have questions or need additional information.
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The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings, and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. In some cases, the underlying legal information is changing quickly in light of the COVID-19 pandemic. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship. Please contact your legal counsel for advice regarding specific situations.