Paid Leave Under COVID-19 Response Act:
What CAAs Need to Know

On Wednesday, March 18, 2020, the President signed the Families First Coronavirus Response Act (the Act) into law. Effective April 2, 2020, the Act requires employers to provide up to two weeks of paid sick leave to employees forced to miss work for qualifying reasons due to the COVID-19 outbreak. The Act also expands the federal Family and Medical Leave Act (FMLA) by providing paid leave to employees who are unable to work or telework because they are caring for a minor child whose school or childcare provider is closed or unavailable due to a public health emergency. These provisions will remain in effect until December 31, 2020. Below is a summary of the new rules, as well as other notable provisions relevant to Community Action Agencies (CAAs).

Emergency Paid Sick Leave

Under the Act, public and private employers with fewer than 500 employees must provide each employee, regardless of how long the employee has worked for the employer, with paid sick time in the event that the employee is unable to work or telework due to one of the following 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 a quarantine order or is self-quarantining;

5. The employee is caring for a child whose school or childcare provider has been closed or is unavailable due to COVID-19 precautions; or

6. 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.

Full time employees are entitled to up to 80 hours of paid sick time, while part-time employees are entitled to the average number of hours they work over a 2-week period (Emergency Sick Leave). This leave is separate from any other leave the employer offers. Employers cannot require an employee to use other paid leave prior to using Emergency Sick Leave. Employers must also conspicuously post a notice, to be published by the Department of Labor by March 25, which will contain information about Emergency Sick Leave.

The compensation available to an employee utilizing Emergency Sick Leave depends on the employee’s regular rate of pay (as calculated under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207(e)), and the qualifying reason for their leave. The Act requires that an employee taking Emergency Sick Leave for reasons (1), (2), or (3) above be paid the greater of (i) their regular rate of pay, (ii) the current federal minimum wage, or (iii) their state or local minimum wage. Those taking leave for qualifying reasons (4), (5), or (6) must receive two-thirds of such amount. Emergency Sick Leave compensation is also capped at the following amounts for each employee: $511 per day for qualifying reasons (1), (2), and (3); and $200 per day for qualifying reasons (4), (5), and (6). 

An employee is entitled to the full amount of Emergency Sick Leave benefits beginning April 2, 2020. The benefits do not apply retroactively to any leave taken before then, and any unused Emergency Sick Leave expires on December 31, 2020.

An employer that fails to provide Emergency Sick Leave or that terminates, disciplines, or otherwise discriminates against any employee who takes Emergency Sick Leave, will be subject to the penalties described in the FLSA, 29 U.S.C. §§ 216 and 217.

The Act also grants the Secretary of Labor authority to issue regulations exempting small businesses with fewer than 50 employees from the obligation to provide leave for qualifying reason (5) above when providing such leave would jeopardize the viability of the business as a going concern.

Emergency Paid FMLA Leave

The Act also expands the federal Family and Medical Leave Act of 1993 (FMLA), 29 U.S.C. §§ 2601 et seq., by providing paid and job-protected leave for a new qualifying reason through December 31, 2020. 

Under the Act, eligible employees may now take FMLA leave if they are unable to work because they must care for a child under 18 due to school or daycare closures, or if a childcare provider is otherwise unavailable due to a public health emergency declared by a federal, state, or local official with respect to the COVID-19 outbreak (Emergency FMLA Leave). The following provisions only apply to Emergency FMLA Leave:

1. Paid and job-protected. An eligible employee may take up to 12 weeks of job-protected Emergency FMLA Leave due to the need to care for a child as described above. An employer is not required to pay an employee during the first 10 days of Emergency FMLA Leave, but an employee may elect to have the Emergency FMLA Leave run concurrently with any existing paid leave (i.e., accrued vacation, sick, or personal leave), including the new Emergency Sick Leave. After the initial 10 days, an employer must pay the employee for the remainder of the leave at a rate that is at least 2/3rds of the employee’s regular rate of pay, and for the number of hours the employee would otherwise be scheduled to work. Emergency FMLA Leave compensation is capped at $200 per day, per employee.
    

2. Applicable to public and private employers with fewer than 500 employees. The DOL may issue regulations to exclude health care providers and emergency responders from coverage, as well as small businesses with fewer than 50 employees if providing Emergency FMLA Leave would jeopardize the viability of their business. Small business employers should not assume that they are exempt from the expanded FMLA benefits before the DOL issues definitive guidance.
    

3. Available to any employee who has been employed for at least 30 days, regardless of the number of hours worked. This is a significant change from the current FMLA requirement that an employee must have worked at least 12 months and at least 1,250 hours during the 12-month period before the start of FMLA leave to qualify for FMLA benefits.
    

4. Notice of leave. If an employee’s need for qualifying Emergency FMLA Leave is foreseeable, the employee must provide the employer with notice, to the extent practicable. The FMLA certifications required for certain other qualifying reasons under 29 C.F.R. § 825.305 do not apply to Emergency FMLA Leave.
    

5. Job restoration. Employers with 25 or more employees are required to follow existing FMLA requirements with respect to reinstating an employee who takes Emergency FMLA Leave to the same or an equivalent position after returning to work. Employers with fewer than 25 employees are exempt from this requirement if all of the following conditions are met: (i) the employee’s original position no longer exists due to economic conditions or other changes in operating conditions caused by the COVID-19 public health emergency; (ii) the employer makes reasonable efforts to restore the employee to an equivalent position, with equivalent employment benefits, pay, and other terms and conditions of employment; and (iii) the employer makes a reasonable attempt to contact the employee within one year following the end of the employee’s leave if an equivalent position becomes available.
    

6. Effective date and expiration. Employers must provide Emergency FMLA Leave benefits beginning on April 2, 2020, and the benefits do not apply retroactively to any leave taken before then. The Emergency FMLA Leave benefits expire on December 31, 2020.

Other than the provisions noted above, all of the existing rules that apply to FMLA leave also apply to Emergency FMLA Leave. For example, employers do not have to provide Emergency FMLA Leave to an employee who has already exhausted his or her 12-week bank of FMLA leave for the current administrative year. See the FMLA regulations at 29 C.F.R. Part 825.

Paying for Emergency Sick Leave and Emergency FMLA

Employers may claim a refundable credit against their share of Federal Insurance Contributions Act (FICA) payroll tax liability for the full amount of Emergency Sick Leave and Emergency FMLA Leave for each calendar quarter in which the benefits are paid. Generally, amounts that an employer pays to provide and maintain a group health plan may be allocated pro rata to Emergency Sick Leave or Emergency FMLA Leave wages and included in the employer’s claimed credits. 

Total claimed credits cannot exceed the caps on paid Emergency Sick Leave and Emergency FMLA Leave described above. Further, only employers required to provide paid Emergency Sick Leave and Emergency FMLA Leave under the Act are entitled to the credit. While public employers (i.e., federal, state, and local governments) must provide both benefits, they are not entitled to claim the credits.

If the amount an employer pays in Emergency Sick Leave or Emergency FMLA Leave exceeds its FICA tax liability in any calendar quarter, the excess paid for leave will be refunded.

The Act directs the Secretary of Treasury to issue regulations or other guidance as necessary to implement the payroll tax credits.

A CAA may charge the cost of paying Emergency Sick Leave and Emergency FMLA to its federal grants without amending its leave policies. The Uniform Guidance provides that fringe benefits required by law are allowable costs. 2 C.F.R. § 200.431(a). The CAA should continue to equitably allocate the cost of such leave to its federal awards. Any subsequent credit allowed against the CAA’s FICA and Medicare tax liability would be an applicable credit under the Uniform Guidance and must be credited to the federal award either as a cost reduction or a cash refund, as appropriate. 2 C.F.R. § 200.406(a). 

We encourage CAAs to work closely with their finance departments and payroll service providers to ensure that they are complying with these new provisions and receiving the full amount of the credit.

Other Provisions of the Act

In addition to the provisions applicable to employers, the Act also:

• Provides $500 million in supplemental appropriations for Women, Infants, and Children (WIC); 

• Provides $400 million in supplemental appropriations for the Commodities Assistance Program;

• Provides $100 million in supplemental appropriations for nutrition assistance to Puerto Rico, the Northern Mariana Islands and American Samoa;

• Provides $250 million and a waiver of state matching requirements for activities such as home-delivered and congregate nutrition services under the Older Americans Act of 1965;

• Authorizes the United States Department of Agriculture (USDA) to approve state plans to provide families that have children receiving free or reduced school lunch with electronic benefit transfer (EBT) cards to purchase food during a qualifying school closure;

• Allows states to request waivers from the USDA to provide emergency Supplemental Nutrition Assistance Program (SNAP) benefits to eligible households up to the maximum monthly amount; 

• Suspends time limits on SNAP eligibility for unemployed and underemployed individuals during the public health emergency declaration period;

• Mandates free COVID-19 testing, i.e., group health plans and insurers must fully cover the costs of diagnostic testing and related services; and

• Provides $1 billion for emergency grants to states for unemployment insurance payments and benefits processing, contingent upon states’ demonstrations of steps taken to increase accessibility of unemployment compensation.

For additional COVID-19 information, FAQs, and guidance from funding sources and the national partners, please visit CAPLAW’s Coronavirus Updates for the Community Action Network page. 

If you have additional questions, please feel free to contact CAPLAW for assistance.

This News Flash is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Grant Award Number 90ET0467-03. Any opinion, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.

The contents of this news flash are intended to convey general information only and do not constitute legal advice. Any communication through this publication or through CAPLAW’s website does not constitute or create an attorney-client relationship. If you need legal advice, please contact CAPLAW or another attorney directly.