How Emergency Paid Sick Leave Works Under the Families First Act

May 11, 2020
Brandon S. Harter

As Pennsylvania’s stay-at-home restrictions slowly lift, many employers will be welcoming back employees temporarily laid off since March. So let’s go through the unique employment law requirements created by one of Congress’s first COVID-19 responses, the Families First First Coronovirus Response Act. (We’ll call it the “Families First Act,” for short.)

What is the Families First Act?

The Families First Act is one of several stimulus bills passed by Congress in response to COVID-19. For most private employers, it has two main components. First, it created a special category of paid time off known as “emergency paid sick leave.” Second, it expanded the FMLA program because of COVID-19. Both of these programs are temporary and will expire at the end of 2020.

Small and medium-sized businesses need to comply with the Families First Act rules, which apply to every employer with 500 or fewer employees.

So even if you do not have to worry about FMLA leave normally, you must be mindful of the Families First Act’s expanded FMLA requirements. You can seek a limited exemption if you are a small business (i.e., less than 50 employees) but talk to your attorney about the specific requirements.

What are the rules for Emergency Paid Sick Leave?

The Families First Act obligates all employers to offer paid emergency sick leave for COVID-19-related events. Here are a few things you should remember:

Every employee qualifies

Every employee on your payroll after April 1, 2020 qualifies for emergency paid sick leave. Even if they were back in the office for one day, you need to give them paid leave.

This rule does not apply, however, to employees laid off before April 1. So be careful about when you are ready to bring employees back.

Leave is based on hours worked

The Families First Act bases emergency paid sick leave on the average number of hours the employee would have worked in a two week period pre-COVID-19. For example, a part-time employee who usually worked 25 hours per week would get 50 hours of emergency paid sick leave.

Leave can only be used for specific events

Employees can only use this emergency sick leave for specific events. The ones you will generally run into are:

  • The employee cannot work because of a governmental shutdown order (more on that in the next bullet below because this one is complicated!);
  • The employee cannot work because they are sick with COVID-19, are seeking treatment, or are caring for someone with COVID-19; and
  • The employee needs to stay home to be the primary caregiver for a son or daughter whose school or daycare is shut down due to COVID-19.

The COVID-19 shutdown order must be the cause

One of the most complicated questions is whether a COVID-19 shutdown order is what causes the employee not to have work vs. a simple lack of work. Emergency paid sick leave only applies to the former.

  • For example, if you would have tasks for an employee to do, but they cannot do them without being in your office (which the order shut down), then they can use the leave.
  • But if you do not need the employee because business is down, then they cannot use the leave. So if you employ a server as a restaurant and you have no customers to serve, it is the lack of business, not the shutdown order, which keeps the employee from working.

This distinction is a hard line to draw in many cases. Here’s another way to look at it. Ask yourself:

  • Does the order keep this particular person from working? If yes, the leave applies.
  • Is the global effect of the order eliminating business keeping this particular person from working? If yes, the leave does not apply.

Leave must be paid

An employee using emergency paid sick leave must, as you’d expect from the name, be paid during the time off. You cannot force the employee to use other types of leave first.

Any unused leave will expire at the end of 2020. However, this act will not require employers to pay employees for unused emergency leave even if their policies normally call for the payment of unused paid time off at the end of employment.

Employers must post notice about Emergency Paid Leave

Employers must post a notice about this leave in the breakroom. With many offices closed, you should also distribute this notice electronically, including to employees as they come back to work. You can use the Department of Labor’s poster located on their website.

What about the expanded FMLA Leave?

Employees are generally meant to use FMLA leave so that they can seek medical care that will make them unable to work or to allow an employee to care for a family member. The Families First Act, however, adds a new, unique bucket of leave.

Here are the things to remember about this FMLA expansion of leave:

There’s a 30-Day employment requirement

Like with normal FMLA leave, an employee needs to be with you for 30 days before being eligible for expanded FMLA leave. But this look back period does count the time before COVID-19, even if the employee was temporarily furloughed and then brought back.

It’s only for Primary Caregivers

The only reason an employee can use expanded FMLA leave is to be the primary caregiver for a son or daughter whose school or daycare is closed due to COVID-19.

Employees will be partially paid after the first 2 weeks

While normally FMLA leave is unpaid, expanded FMLA is a little different. The first two weeks are unpaid (because they will probably be paid using emergency paid sick leave as discussed above). After that, they are eligible for two-thirds of their normal wages for up to 12 weeks.

Employees can use it concurrently with other leave

An employee can use other leave time concurrently with their expanded FMLA. For example, they can use paid time off so they receive their full pay rather than partial pay. But these times will run simultaneously, not with paid time off being used first and then 12 weeks of expanded leave after that.

How do I pay for all this?

So how do you, as the employer, pay for all this extra time off? The Families First Act addresses this through the form of payroll tax credits. If you document when employees take this leave, you can use that to reduce the employer portion of your payroll taxes. Talk to your payroll provider and accountant to make sure you are doing this correctly. You may owe penalties if you fail to remit taxes appropriately.

You can also pay for this time using other stimulus programs, such as the Payroll Protection Program (commonly called PPP loans). Learn more about those loans by clicking on this post here at the Lancaster Law Blog.

The Families First Act and its supporting regulations are a whole new world that can be difficult to navigate. If you have specific questions, contact your lawyer today. While our physical offices remain closed, our attorneys and staff remain ready to help by video conference, phone, and email.

Brandon Harter is a litigator and technology guru at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from William & Mary Law School and advises clients on issues of Civil Litigation & Dispute ResolutionMunicipal Law, and chairs the firm’s Tech Law Group.