(1) Emergency Paid Sick Leave Act:

On March 18, 2020, President Trump signed into law the Emergency Paid Sick Leave Act. 

What Benefits Does The Act Require Employers To Provide?

Employers who have fewer than 500 employees and who are subject to the Fair Labor Standards Act (which includes most employers) are required to provide every employee (no matter how long they have been employed) with two weeks of paid sick leave that can be used when the employee is unable to work for any of the following 6 reasons:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
     
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
     
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
     
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2);
     
  5. The employee is caring for his/her son or daughter1 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; or

1 “son or daughter” means a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is either under 18 years of age, or 18 years of age or older and incapable of self-care because of a mental or physical disability.

  1. 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.

Employees will be immediately eligible for this leave once the Act goes into effect.

After the first workday that an employee receives paid sick time under the Act, the employer can require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.

The Act states that, if the reasons for the employee’s paid sick leave ends, then the employers’ obligation to pay paid sick leave under the Act ends at the start of the employee’s next scheduled shift

Calculating the Two-Weeks of Paid Sick Leave

For full-time employees, two weeks of paid sick leave automatically equates to and is capped at 80 hours.

For part-time employees, two weeks of paid sick leave equates to the average number of hours that the employee works over a 2-week period

For part-time employees with varying or irregular schedules where the employer cannot easily determine a 2-week average, the employer must use the average number of hours the employee was scheduled per day over the 6-month period preceding the date on which the employee takes the paid sick time, including hours for which the employee took leave of any type.

For part-time employees with varying or irregular schedules who did not work over the entire 6-month period preceding the date on which the employee takes the paid sick time, the employer must use the employee’s reasonable expectation (at the time of hiring) of the average number of hours per day that the employee would normally be scheduled to work.

The quantity of paid sick leave hours to be allotted each day is based on the number of hours the employee would otherwise normally be scheduled to work (or for part-time employees, the number of hours described above).  For example, if a full-time employee normally works four 10-hour shifts each week under an Alternative Work Schedule, then a day’s use of paid sick leave under the Act should be for 10 hours.

The minimum amount of compensation for paid sick leave hours is the highest rate of the following three standards:

  1. The employee’s “regular rate of pay” as determined under Fair Labor Standards Act
    • Note: this rate may be different than the California version of the “regular rate of pay” our advisories have discussed in the past, as California and Federal rules calculate this amount differently. 
  2. The federal minimum wage rate, which is currently $7.25/hour.
  3. The minimum wage rate in effect for the employee in the applicable State or locality, whichever is greater, in which the employee is employed.  California’s minimum wage is currently $12.00/hour for employers with 25 or less employees, and $13.00/hour for employers with 26 or more employees.  Many cities impose higher minimum wages, which would take priority under this new Act.

One exception applies for these rates: when an employee is using sick leave under (4), (5), or (6) of the six permissible sick leave reasons, the employee’s required compensation rate may be reduced to only two-thirds of the amount described above(For example, if an employee is using sick leave under (4) of the six permissible sick leave reasons, and their applicable minimum wage rate is $13.00/hour, the employer can reduce their paid sick leave compensation under this Act to $8.67/hour).

Caps on Paid Sick Leave Compensation

The Act places monetary caps on compensation for certain uses of paid sick leave.

For employees using sick leave under (1), (2), or (3) of the six permissible sick leave reasons, employers can cap payments at $511 per day and $5,110 in the aggregate. 

For employees using sick leave under (4), (5), or (6) of the six permissible sick leave reasons, employers can cap payments at $200 per day and $2,000 in the aggregate.

Order of Operations With Other Leave Benefits

An employer may not require an employee to use other paid leave provided by the employer before the employee uses the paid sick time under the Act.  If the employee is seeking to take leave for any of the six permissible sick leave reasons, they must use the paid sick leave under the Act first, before any other paid sick leave, vacation/PTO, or other similar benefits the employer might make available.

Paid Sick Leave At the End of Employment and after December 31, 2020

Unused paid sick leave does not get paid out to employees at the end of their employment – they either use it or lose it.  Similarly, paid sick leave under the Act does not carry over from one year to the next.

Notice Posting Requirements

As long as the Act applies to an employer, they must post a Secretary-of-Labor-approved notice in a conspicuous place on the premises where notices to employees are customarily posted.

The Act orders the Secretary of Labor to provide employers with a model notice by March 25, 2020, for them to use and adapt. 

Employment Under Multi-Employer Bargaining Agreements

Employers who are signatories to a multiemployer collective bargaining agreement may, consistent with its bargaining obligations and its collective bargaining agreement, fulfill its obligations under this Act by making contributions to a multiemployer fund, plan, or program based on the hours of paid sick time each of its employees is entitled to under this Act while working under the multiemployer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement and for the six permissible sick leave reasons.

Employees who work under a multiemployer collective bargaining agreement into which their employers make these contributions may secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement for the six permissible sick leave reasons.

What does the new law prohibit?

The Act prohibits employers from requiring, as a condition of providing paid sick time under this Act, that the employee using the leave search for or find a replacement to cover the hours during which the employee is using paid sick time.  However, the Act does not prohibit an employer from requesting the employee assist in this operation voluntarily.

The Act also prohibits employers from discharging, disciplining, or in any other manner discriminating against any employee who (1) takes leave in accordance with this Act, or who (2) has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act (including a proceeding that seeks enforcement of this Act), or has testified or is about to testify in any such proceeding.

What Are The Consequences Of Failing To Abide By The New Law?

Failure to provide paid sick leave under the Act is tantamount to failing to pay minimum wages under the Fair Labor Standards Act.  This can subject an employer to civil penalties, injunctive relief, and damages including unpaid wages, liquidated damages (generally referred to as “double damages”), attorneys’ fees and costs, as well as potential criminal liability, including fines up to $10,000 and imprisonment of up to six months.

Similarly, discharging, disciplining, or in any other manner discriminating against employees in violation of the Act is tantamount to similar violations under the FLSA and, in addition to the potential civil and criminal liability discussed above, can entitle an impacted employee to reinstatement, promotion, and the payment of wages lost, and an additional equal amount as liquidated damages.

(2)  Emergency Family Medical Leave Expansion Act:

On March 18, 2020, President Trump also signed into law the Emergency Family Medical Leave Expansion Act, which extends FMLA protections to employees under certain conditions.  The Act takes effect on April 2, 2020, and expires on December 31, 2020.

Who Does The Act Apply To?

The Act applies to any employer who has employed fewer than 500 employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.  The only current exception is that employers of health care providers or emergency responders may elect to exclude such employees from the provisions of the Act.

Only employees who have been employed for at least 30 calendar days may take leave under this Act.

What Benefits Does The Act Require Employers To Provide?

Eligible employees may take up to 12 weeks of paid, job-protected leave when they are unable to work (or telework) due to a need for leave to care for their son or daughter under 18 years of age if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, if either is due to an emergency with respect to COVID–19 declared by a Federal, State, or local authority.

The first 10 days of this leave can be unpaid, although an employee may elect to substitute accrued vacation leave, personal leave, or medical or sick leave for this initial unpaid leave period if they desire. 

After the initial 10-day period, the employer must pay the employee for any addition qualifying leave taken under the Act at a rate of not less than two-thirds of the employee’s “regular rate of pay” (as determined under Fair Labor Standards Act) for an amount of hours the employee would otherwise normally be scheduled to work. 

For employees with varying or irregular schedules where the employer cannot easily determine this amount of hours number, the employer must use the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type. 

For employees with varying or irregular schedules who did not work over the entire 6-month period preceding the date on which the employee takes the paid sick time, the employer must use the employee’s reasonable expectation (at the time of hiring) of the average number of hours per day that the employee would normally be scheduled to work.

Compensation for the paid leave required under this Act is capped at $200 per day, and $10,000 in the aggregate.

Overlap with the Emergency Paid Sick Leave Act

Both the Emergency Paid Sick Leave Act and the Emergency Family Medical Leave Expansion Act have language that applies to employees needing to take care for his/her son or daughter if the school or place of care of the employee’s son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19.  Under such circumstances, the employee could be entitled to the benefits of one or both of these Acts at the same time, and employers should be careful to apply both appropriately.

Job Restoration

Employers with fewer than 25 employees are excluded from the obligation to return an employee taking leave under this Act to the same or equivalent position upon the return to work if:

  1. the employee’s position no longer exists following the leave due to economic conditions or other changes in operating conditions of the employer which both: i) affect the position; and ii) were caused by an emergency with respect to COVID–19 declared by a Federal, State, or local authority;
     
  2. The employer made reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment; and
     
  3. the employer continues to make reasonable efforts to contact the employee if such an equivalent position becomes available within the 1-year period beginning the date the leave concluded, or a date 12 weeks after the start of the employee’s leave, whichever is earlier.

Protection from Civil Liability arising from Employee-Initiated Lawsuits

Employers under this new Act (as defined by the fewer-than-500-employees language) will not be liable for civil damages in an employee-initiated lawsuit for violating these new rules if the employer does not also meet the “normal” definition of an employer under the old FMLA language (those who employ 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year).  This protection does not extend to actions filed by the Secretary of Labor, however.

What Should Employers Do Now?

Employers should take immediate action to determine whether the Emergency Paid Sick Leave Act and/or the Emergency Family Medical Leave Expansion Act applies to them, and if so, plan ahead for the potential financial consequences of its workforce requesting paid leave starting as early as April 2, 2020.

  • Evaluate whether the fewer-than-500-employees criterion is met.  The Emergency Paid Sick Leave Act does not designate a period within which to evaluate the 500-employee count.  Accordingly, if at any point when this Act is in effect (between April 2, 2020, and December 31, 2020), an employer’s employee count drops beneath 500, the Act and all of its obligations will apply.  Conversely, if the employer’s employee count rises above 500, the Act will not apply to them.  In contrast, the Emergency Family Medical Leave Expansion Act applies only to an employer who has employed fewer than 500 employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year, subject to the exception discussed above
  • Evaluate whether the joint employer rules require compliance.  The Emergency Paid Sick Leave Act not only obligates employers, but also those “acting directly or indirectly in the interest of an employer in relation to an employee.”  This language generally refers to joint employment under the FLSA for which the Department of Labor recently provided new guidance to help companies evaluate whether they fall within the scope of this language, while each Federal Circuit Court of Appeals has slightly different rules for evaluating this issue.  If an employer is unsure whether they meet the standard of a joint employer, they should consult with an attorney for guidance.
  • If the Emergency Paid Sick Leave Act applies, get ready to post a Notice of the Emergency Paid Sick Leave Act. By Wednesday, March 25, the Secretary of Labor should have a model notice available for employers to use and adapt.  As long as the Act applies to an employer, they must post the Secretary of Labor’s notice in a conspicuous place on the premises where notices to employees are customarily posted.
  • When higher-paid employees begin to use sick leave under the Emergency Paid Sick Leave Act, designate the reason for which they are taking the leave. For full-time employees earning higher hourly rates, understanding which provision they are taking paid sick leave under can save money.  The Emergency Paid Sick Leave Act limits an employer’s requirement for paid leave to $511 per day (or $5,110 in the aggregate) where leave is taken under the first, second, and third reasons noted above, and $200 per day ($2,000 in the aggregate) where leave is taken under the fourth, fifth, and sixth reasons, as noted above. 

Employers will be navigating uncharted waters with the new Emergency Paid Sick Leave Act and the Emergency Family Medical Leave Expansion Act.  If you have questions regarding compliance with these Acts, or any other issue related to employment law, please contact one of our attorneys.

Shareholders Associates
Eric C. Bellafronto Ernest M. Malaspina Shirley Jackson
Karin M. Cogbill Richard M. Noack Sean Bothamley
Jennifer Coleman Daniel F. Pyne III