Last week, the federal government passed the Families First Coronavirus Response Act (FFCRA), which includes the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA). At the same time, states are passing their own paid leave laws, often with slightly wider applicability than the federal law.
The federal law takes effect on April 2nd and applies to employers with 500 or less employees, with certain carve-outs for employers with 50 or less employees if complying with the law would threaten the viability of their business. By contrast, the New York law takes effect immediately and applies to all employers, with varying requirements depending on employer size.
The Emergency Paid Sick Leave Act
This EPSLA is the more widely-applicable of the two federal laws. It provides paid leave to employees who cannot work (and cannot work remotely) in one of six situations:
The employee is subject to a government-ordered quarantine or isolation due to coronavirus;
The employee is subject to a healthcare provider-ordered self-quarantine due to coronavirus;
The employee is experiencing symptoms of coronavirus and is seeking a medical diagnosis;
The employee is caring for an individual who is subject to a government- or healthcare provider-
The employee is caring for a child whose school or childcare facility closed due to coronavirus; or
The employee is experiencing any other similar condition as may be specified in the future by certain federal officials.
Full time employees receive up to 80 hours of paid leave, and part time employees are eligible for the average number of hours they work in a two week period. If an employee is subject to quarantine or has symptoms of coronavirus, the leave is paid at 100% of the employee’s salary with a limit of $511 per day and $5,110 total. If an employee takes leave to care for others, the leave is paid at 2/3 of the employee’s salary with a cap of $200 per day and $2,000 total.
Employers may not require employees to use accrued paid time off prior to using EPSLA leave. EPSLA leave casts a wide net and is available to all employees, regardless of how long they have worked for their employer. The Department of Labor has provided this poster, which employers must post to make their employees aware of these benefits.
The Emergency Family and Medical Leave Expansion Act
The existing Family and Medical Leave Act (FMLA) provides employees with job-protected unpaid leave for certain medical and family reasons. The new law expands the FMLA to provide paid leave for employees who are unable to work (and unable to work remotely) specifically because their child’s school or childcare facility closed due to coronavirus.
The first ten days of leave are unpaid under the EFMLEA, but employees would receive paid leave during that time period under the EPSLA (or by using their accrued paid time off). Following the first two weeks, employees receive an additional 10 weeks of paid leave at 2/3 of their regular salary with a cap of $200 per day and $10,000 total. Unlike the EPSLA, which applies to all employees, the EFMLEA only applies to employees who have been working for 30 days or more.
When an employee returns to work from leave, the employee must be restored to their prior position. However, employers with 25 or fewer employees are exempt from this requirement if: their former position no longer exists due to economic conditions or changes caused by a public health emergency; the employer makes reasonable efforts to restore the employee to an equivalent position; and the employer meets certain other requirements enumerated in the law.
The EFMLEA provides that the Department of Labor can issue regulations to exempt small businesses with 50 or fewer employees if complying with the law would “jeopardize the viability of the business as a going concern.” Employers meet this requirement if they do not employ 50 or more employees for each working day of 20 or more workweeks. The Department of Labor has not yet issued regulations for this exemption.
Reimbursement of Employer Expenses
Regardless of whether employers must pay for EFMLEA or EPSLA leave, the IRS explains that “employers receive 100% reimbursement for paid leave pursuant to the Act” through a payroll tax credit, which is designed to “immediately and fully reimburse [employers], dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.”
If payroll taxes are not sufficient to cover the cost of leave, employers can request an advance from the IRS, which the IRS plans to process within two weeks. The IRS gives the following example: “If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.” More information on IRS reimbursement and payroll tax advances is available at this link.
New York Law
Many states are also moving quickly to manage the unprecedented challenges posed by coronavirus. New York’s new law applies to all employers in the state, without the federal exceptions for smaller and larger employers. Also, New York’s law provides unlimited leave until the quarantine ends, while the federal laws provide two weeks of leave in most situations, and 12 weeks of leave for parents who cannot work because they are caring for children due to school and childcare closures.
Under New York’s law, employees who are unable to work (and unable to work remotely) due to government-ordered quarantine or isolation receive job-protected sick leave and benefits, the details of which depend on the size of the employer as of January 1, 2020:
Ten or fewer employees and a net income under $1 million: Employees receive unpaid sick leave until the quarantine/isolation ends. They are also eligible for paid New York family leave and disability benefits.
Ten or fewer employees and a net income over $1 million: Employees receive at least five days of paid sick leave followed by unpaid sick leave until the quarantine/isolation ends. After the five days of sick leave, employees are eligible for paid New York family leave and disability benefits..
11-99 employees: Employees receive at least five days of paid sick leave followed by unpaid leave until the quarantine/isolation ends. After the five days of sick leave, they are eligible for paid New York family leave and disability benefits..
100 or more employees and public employers: Employees receive at least 14 days of paid sick leave followed by unpaid leave until the quarantine/isolation ends. Presumably, they are then eligible for paid New York family leave and disability benefits. However, unlike the sections for smaller employers, these two sections do not mention family leave or disability.
New York’s paid leave is provided in addition to accrued paid time off; employees do not need to use their sick leave first. The act does not apply to employees who are asymptomatic and able to work remotely while under quarantine.
The law also modifies New York workers’ compensation and family leave laws so that they apply when employees cannot work due to the quarantine or lose their childcare due to the quarantine. Family leave is capped at $840.70/week and disability leave is capped at $2,043.92/week. Note that the maximum weekly disability benefit may be lower than the cap: It’s calculated as the difference between the maximum weekly family leave benefit and the employee’s total average weekly salary.
The New York law does not apply to the extent that federal law provides the same or greater benefits to employees. However, if the New York law provides greater benefits, then New York employees are entitled to the difference between federal benefits and what they would receive under New York law.
We expect more states to pass paid leave laws in the coming days and weeks, and we are also waiting on an imminent third coronavirus relief law from the federal government. Employers should watch the changing landscape closely.