Updated: March 19, 2020, 7:45 a.m. - The final version of this bill has passed the Senate and has been signed by President Trump. It differs significantly from the version detailed here. For the updated information, click here.
On Friday, the House of Representatives passed the Families First Coronavirus Response Act in an effort to give relief to individuals and businesses affected by COVID-19. We can expect that some form of the bill will pass the Senate in the coming days, perhaps with modifications (it’s currently being held in the House to correct some language), and that the president will sign it. The original version passed the House with overwhelming bipartisan support. When it does pass, it will significantly amend the Family Medical Leave Act (FMLA), significantly changing the rules for America’s small employers.
Specifically, the most important change in the Act is that all companies with fewer than 500 employees -- not the 50 employee floor that previous versions of FMLA maintained -- will be responsible for providing paid leave to employees affected by coronavirus/COVID-19. The bill does not make changes for larger businesses with more than 500 employees.
Here are the proposed changes to FMLA in the new Act:
- It amends the definition of employee to anyone who has been employed by an employer for at least 30 days.
- It changes the definition of employer from "50 or more employees" to "fewer than 500 employees."
- It expands the definition of parent to include foster and adoptive parents, step-parents, parents of a domestic partner, parental in-laws, guardians, and those who stood in loco parentis.
- It provides leave to provide care for a family member who is under a coronavirus-related quarantine.
- It provides leave to care for a minor son or daughter of an employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, related to coronavirus.
- It expands the definition of family member to include next of kin and grandparents.
- It provides that leave after the first 14 days of any coronavirus-related family leave is to be paid in an amount that is not less than two-thirds of an employee's regular rate of pay for the number of hours the employee otherwise would have worked.
- It requires job restoration following any such leave for any employee of an employer with 25 or more employees.
Not everything in the bill is employment-related. The bill also provides additional funding for children who lose school lunches, SNAP, veterans benefits, and more. The House produced this summary for easy reference.
FMLA has traditionally provided job protection with unpaid leave, but the Families First Coronavirus Response Act would provide 80 hours of paid coronavirus-based leave. As an employer, that means you would have to provide pay for any employee affected by coronavirus but not, say, cancer.
Here’s how it works:
- The first 14 days of leave may be unpaid, but an employee can choose to substitute accrued vacation leave, personal leave, or other medical or sick leave during the coronavirus-related leave. The employer cannot force an employee to use their accrued paid leave.
- After 14 days of unpaid leave, employers must pay FMLA leave for the reasons noted above at no less than two-thirds the employee's regular rate of pay for the number of hours the employee would have been normally scheduled.
To assist business owners with the expense of paying non-working employees, the bill provides tax credits for businesses that provide benefits for companies and self-employed individuals who are affected by coronavirus. It can cover up to 100% of qualified paid sick leave, for employers, and a 67% refundable tax credit for self-employed people caring for a child or family member. For the self-employed, the benefits are capped at either $200 per day or the average daily income rate, whichever is smaller.
These credits will help, but they won’t cover all costs completely. The Department of Labor does have the ability to exempt small businesses if they can show this would cause financial hardship. Remember also that BGW is here for you as the impact of coronavirus is felt throughout your business. Please continue to be in contact during this unprecedented time.
As of this writing, the bill is not yet the law, but we think it’s safe to say that some version of FMLA reform is coming. The Senate will need to hold hearings, and if they pass it with changes, it will have to go to a conference committee before heading to the president’s desk for approval. Still, expect changes sooner than later. We’ll keep you posted.