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March 18, 2020

President Signs COVID-19 Relief Bill into Law: What Employers Need to Know

Earlier today, the Senate passed H.R. 6201, the Families First Coronavirus Response Act by a vote of 90-8. Late this evening, the President signed it into law. In addition to addressing immediate public health issues, the legislation includes key provisions impacting employers. We summarize below critical provisions relating to paid sick leave, family medical leave and unemployment insurance. Our summary is based on the version of bill passed by the House over the weekend, as the Senate version has yet to be published. We will keep you updated on any developments.

Employers with Fewer than 500 Employees

The emergency leave provisions only apply to employers with fewer than 500 employees. The bill does not exempt small businesses with fewer than 50 employees. Businesses with fewer than 50 employees can only qualify for a narrow exemption if the Department of Labor determines that providing these benefits would jeopardize the viability of the business. Local, state and, in certain instances, federal government employees are also covered. Employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are also covered.

Emergency Paid Sick Leave

  • Employees Taking Sick Leave for their Own Illness. Full time employees are entitled to two weeks (80 hours) of fully paid time off (up to $511 per day) to self-quarantine, seek a diagnosis or preventive care, or receive treatment for COVID-19. Part-time employees are entitled to fully paid time off (up to $511 per day) for the typical number of hours that they work in a typical two-week period to self-quarantine to seek a diagnosis or preventive care, or receive treatment for COVID-19.
  • Employees Taking Sick Leave to Care for Family. Full-time and part-time employees are also entitled to two weeks (80 hours) paid time off at two-thirds of their regular pay (up to $200 per day) to care for a family member or to care for a child whose school has closed, or if their child care provider is unavailable due to COVID-19.
  • Other Key Terms. Employers will be required to post a notice informing employees of their rights to leave. The legislation expressly provides that it does not preempt existing state or local paid sick leave entitlements.

Emergency Paid Family Medical Leave

  • The legislation provides 12 weeks of job-protected paid Family and Medical Leave Act (FMLA) leave—of which the first 14 days may be unpaid—for full-time and part-time employees.
  • Employees may use accrued personal or sick leave during the first 14 days, but employers may not require employees to do so.
  • This leave benefit covers employees who have been working for at least 30 calendar days.
  • Among other uses, employees may use the leave to respond to quarantine requirements or recommendations, to care for family members who are responding to quarantine requirements or recommendations, and to care for a child whose school has been closed as a result of the COVID-19 pandemic.
  • After the first 14 days, employers must compensate employees in an amount that is not less than two-thirds of the employee’s regular rate of pay. These pay requirements apply to only the COVID-19-related leave reasons listed above.
  • Employer Reimbursement

    Employers initially front the cost of emergency paid sick leave and family medical leave but will be fully reimbursed through a refundable tax credit that counts against employers’ payroll tax.

    Unemployment Insurance

    The legislation provides $1 billion in emergency unemployment insurance (UI) relief to the states: $500 million for costs associated with increased administration of each state’s UI program and $500 million held in reserve to assist states with a 10 percent increase in unemployment. Besides the necessary increase in unemployment, in order to receive a portion of this grant money, states must temporarily relax certain UI eligibility requirements, such as waiting periods and work search requirements.

    Governor Pritzker announced preliminary plans for assistance for those who will need unemployment benefits. See information through the link HERE.

    Effective Date

    The new federal legislation will go into effect 15 days after the date of enactment and expire on December 31, 2020.

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