COVID-19 Update: Federal Paid Leave Requirements and the The Families First Coronavirus Response Act

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  • March 25, 2020

We at GSA National are staying on top of the developments related to COVID-19 and their impact on the business community.

Last week President Trump signed into law The Families First Coronavirus Response Act (H.R. 6201).  The act is designed to expand relief in response to the coronavirus disease (COVID-19) outbreak, including through access to free testing and medical services. It requires compliance by all group health plans, including self-insured plans. Note, the legislation provides for the waiver of deductibles, etc. not only for testing, but for items and services provided during healthcare provider and hospital visits. This act is effective immediately and will remain in effect through the “emergency period” to be declared by the Department of HHS.

While this act has extensive provisions in response to COVID-19, the following areas are important for employers to note:

EXPANDED FMLA

What is expanded?  The Emergency Family and Medical Leave Expansion Act amends the current Family and Medical Leave Act (FMLA), allowing leave for eligible employees who can’t work (or telework) because their minor child’s school or childcare service is closed due to a COVID-19 emergency declared by a federal, state or local authority.

Who is eligible?  Eligible employees include employees who work for an employer with fewer than 500 employees and who have been on the payroll for at least 30 calendar days.

Is this paid leave?  The first 10 days of this leave may be unpaid; however, employees may elect to substitute available paid time off, such as vacation, personal or sick leave, during this time.  After the initial 10 days, employers must pay eligible employees at least two-thirds of the employees’ regular rate of pay (as defined under the Fair Labor Standards Act) based on the number of hours the employees would otherwise have been scheduled to work. These paid-family-leave benefits are capped at $200 a day (or $10,000 total).

Are there exceptions?  An employee working for a health care provider or an emergency responder can be excluded from these requirements by his or her employer.  A small employer with fewer than 25 employees is not obligated to reinstate an employee at the end of his or her leave if the employee’s position has been eliminated due to economic conditions or other changes in operating conditions of the employer caused by COVID-19, and the employer is unable to reinstate the employee to an equivalent position.

What is the effective date?  The expanded FMLA provisions take effect not later than 15 days after enactment and expire on December 31, 2020.

PAID SICK LEAVE

Who is covered?  Employers with fewer than 500 employees and public agencies with at least one employee. How much leave is required?  Covered employers must provide full-time employees with up to 80 hours of paid sick leave if the employees are unable to work (or telework) due to COVID-19. Part-time employees are entitled to paid sick leave based on the number of hours the employees work, on average, over a two-week period.
What are the qualifying reasons for leave?Qualifying reasons for this paid sick leave include:

  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 either number 1 or 2 above.
  5. The employee is caring for his or her son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions.
  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.

Note:  A covered employer must provide to employees that it has employed for at least 30 days up to an additional 10 weeks of paid family leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

What are the pay requirements?  Paid sick leave must be paid at the employee’s regular rate of pay, or minimum wage, whichever is greater, for leave taken for reasons 1-3 above. An Employee taking leave for reasons 4-6 may be compensated at two-thirds of his or her regular rate of pay, or minimum wage, whichever is greater.

What if the employee has other paid leave available?  An employer may not require an employee to use other types of paid leave provided by the employer before the employee uses the paid sick time available under this law.

What is the effective date?  The-paid-sick leave provisions take effect not later than 15 days after enactment and expire on December 31, 2020.

 HEALTH INSURANCE

A group health plan must provide coverage without any cost-sharing requirements, such as deductibles, co-payments and co-insurance, or prior authorization or other medical management requirements, for:

  • The costs of a test to detect or diagnose the virus that causes COVID-19; or
  • Health care provider visits, including telehealth visits, urgent care and emergency room visits, that result in an order for or administration of a test to detect or diagnose the virus that causes COVID-19. 

TAX CREDITS FOR PAID SICK LEAVE AND PAID FMLA

A tax credit is created for each calendar quarter for an amount equal to 100 percent of the qualified sick leave wages and qualified family leave wages paid by an employer during the calendar quarter, including some costs associated with providing and maintaining a group health plan during such paid leaves.

SERVICE CONTRACT ACT IMPACT

The Service Contract Act (SCA) regulations provide that no benefit required by federal law is a fringe benefit under the SCA. Therefore, if an SCA employer has a site or office closure for any reason, include COVID-19 precautions, and provides employees with unpaid leave, the employer does not have a Health and Welfare (H&W) obligation for these unpaid hours.

If the employer provides paid leave, then the H&W obligation will depend on the Wage Determination (WD). If the employee is assigned to an Even-Numbered WD, there is no H&W obligation. An employer’s Health and Welfare (H&W) obligation under Even-Numbered WDs is only for all hours worked. If the employer provides paid leave for employees assigned to an Odd-Numbered WD, there is an employer H&W obligation for all hours paid capped at 40 hours per week.

SCA employers are encouraged to work closely with their Contracting Officers regarding any site closures and the impact on employee benefits. 

If you have questions or concerns about your organizations operations as they relate to these updates, contact us at customersupport@gsanational.com or call 1-800-250-2741.

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