On April 1, 2020 two new federal employment laws will go into effect that will have profound implications for all employers: the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”). These two laws were passed to protect workers in light of the current ravages of COVID-19. But the burden that each will have upon employers is onerous and must be accounted for. This blog will discuss the operative portions of each law.
The EPSLA requires all employers to provide two weeks (up to 80 hours) of paid sick leave to all employees who are unable to work for reasons related to COVID-19, including but not limited to, the sickness of the employee from COVID-19, caring for a family member who has COVID-19, and complying with government-issued shutdown orders. An affirmative diagnosis of COVID-19 is not required for the employee to take advantage of EPLSA leave. Mere exhibition of the symptoms is enough. Employees taking advantage of the EPSLA are entitled to their full compensation during the two-week period, unless they are caring for a child or family member affected by COVID-19. In those cases, employees are only entitled to two-thirds of their regular pay.
Critically, the leave allowed by EPSLA is expressly in addition to any paid leave that employers otherwise provide their employees. Employers are further barred from altering their paid leave policies to avoid EPSLA obligations while EPSLA is in effect.
Part-time employees are entitled to paid sick leave under the EPSLA, as well. The paid benefits to which they are entitled are equal to the average number of hours that the part-time employee works over a two-week period.
Lastly, all employees are entitled to EPSLA benefits, regardless of how long they have worked for the employer.
The EFMLEA is an expansion of the Family and Medical Leave Act of 1993 (“FMLA”). The EFMLEA allows employees to take leave for the same reasons set forth in the EPSLA.
FMLA mandates that larger employers provide 12 weeks of unpaid leave for qualified employees. Notably, FMLA only applied to employers that have more than 50 employees.
In contrast, EFMLEA applies to employers with fewer than 500 employees and protects any employee who has been employed with the employer for at least 30 calendar days. Employers subject to EMFLEA are required to provide covered employees with 14 days of unpaid leave – which would be covered by EPLSA – and then a further 10 weeks of paid leave at 2/3 of the employee’s compensation. The compensation is determined by (1) two-thirds of the employee’s regular rate of pay under Section 7(e) of the Fair Labor Standards Act of 1938, and (2) the number of hours that the employee would otherwise normally be scheduled to work. The EMFLEA provides additional guidance in more complicated employment situations.
The EFMLEA gives the Department of Labor the authority to create further regulations that would exempt small businesses with fewer than 50 employees from the requirements of the EMFLEA “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” These regulations have not been enacted as of the time of the drafting of this article.
What Should Employers Do?
Both the EPLSA and the EFMLEA will automatically expire at the end of this year. But, this is little consolation for employers who, at a time when they are seeing massive drops in revenue, are now faced with massive new federally-imposed liabilities. Failure to comply with these laws is not an option given the heavy, punitive sanctions that can be brought against non-compliant employers, which can include fines, punitive damages, attorney fees, and even imprisonment. Instead, employers must aggressively prepare to finance these obligations. Critically, all amounts that lawyers pay to employees under both the EPLSA and EMFLEA give rise to a fully refundable tax credit. Presuming that employers can survive until they do their taxes, they will be fully compensated for all amounts paid. Consequently, the primary goal of every employer should be to maintain liquidity until the laws sunset. Employers must also review their employee handbooks to ensure that they are compliant with these new laws.
The attorneys at Cantafio Nagel & Song PLLC stand ready to assist all businesses and employers with making it through this difficult time. If you have questions about the EPLSA, EFMLEA, or your employee handbook (especially if you don’t have one!), give us a call today.