Employers advised to read, analyze new Families First Coronavirus Response Act

Employers, already reeling from the economic impact of the coronavirus and related shutdowns, are now looking at what will happen with the Families First Coronavirus Response Act, which was passed March 18 and goes into effect April 2.

Employment law attorneys who are reading through the act, consulting with clients and watching the situation unfold say that businesses of all sizes will see an impact. Some of these lawyers are advising clients to document all employee-related actions, establish policies regarding remote work and other coronavirus-related issues and to stay in touch with them on this rapidly changing situation.

Larry Grudzien, an Oak Park, Ill.-based attorney with an expertise in employment law, said employees and employers are both scrambling right now to understand what’s happening. Grudzien said he expects the impact to continue for months down the road and for there to be massive amount of litigation as a result.

“I’ve never seen layoffs come this quickly. Between when the act was passed and when it becomes effective, businesses have laid off all kinds of people, and that’s going to continue,” Grudzien said.

Grudzien said he sees two main issues: People who are laid off will not have coverages they need, such as medical insurance. Secondly, employers have to decide how to handle situations where a worker may have been exposed to the virus and whether they should allow this person to come back to work or whether they should shut down the office, factory or facilities as a whole.

Grudzien said his phone has been ringing off the hook since the act was passed. He has received hundreds of emails daily. Moreover, he had an employment law seminar set up for next week, and more than 1,000 people have signed up to attend. That shows how much people and employers are seeking information, direction and leadership in this space, Grudzien said.

“(Employers and leaders) need to be straight with people – this likely is going to get worse before it gets better. … It is better to over prepare than under prepare,” Grudzien said. Moreover, “this crisis exposes the problem with employer-based healthcare. If everyone was working like they were two weeks ago, we’d still be ok.”

Also on Thursday, University of Michigan economists reported that they expect a U.S. recession caused by the coronavirus, though a rapidly evolving, uncertain situation makes drawing firm conclusions difficult.

In an interim update to the U.S. and Michigan Economic Outlook for 2020-2022 released Thursday, the economists say COVID-19 has caused “substantial economic disruptions” since the last outlook for the U.S. and Michigan economies was released in February. That report assumed “relatively limited disruption to the real economy,” but added that “fast-moving events the past few weeks have invalidated that assumption.”

Here are some key points to the Families First Coronavirus Response Act:
• The Families First Coronavirus Response Act (“the law”) provides two leaves, Paid Sick Leave and Paid Public Health Emergency Leave Under the Family and Medical Leave Act. The law only applies to employers with fewer than 500 employees. Part-time employees are included in this count to assess coverage. Further, the below provisions can also be affected by specific state and local laws.

• Paid Sick Leave: Employers with fewer than 500 employees will be required to provide full-time employees with two weeks (80 hours) of paid sick leave for the following reasons: To self-isolate because of a diagnosis of COVID-19, or to comply with a recommendation or order to quarantine due to exposure or exhibition of symptoms; to obtain a medical diagnosis or care if the employee is experiencing symptoms of the coronavirus; to care for a family member who is self-isolating due to a diagnosis of coronavirus, experiencing symptoms of coronavirus and needs to obtain medical diagnosis or care, or quarantining due to exposure or exhibition of symptoms; or to care for a child whose school has closed, or childcare provider is unavailable, due to the coronavirus.

• Employers must compensate employees for any paid sick time they take at their regular rates of pay (unless the leave is being used to care for a family member or child, in which case the employee is only entitled to two-thirds of his or her regular rate of pay). The sick leave is available for immediate use by employees, regardless of length of employment.

• Additionally, part-time employees are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a 2-week period.

• Employers who already provide paid leave to employees on the day before the law is enacted must provide this paid leave in addition to any paid leave already provided-and may not change their paid leave policies on or after the date of enactment to avoid compliance. Finally, employers cannot require employees to utilize other paid leave before using the paid leave provided by this bill.

Paid Public Health Emergency Leave Under the Family and Medical Leave Act
• Employees of employers with fewer than 500 employees can be provided with the right to take up to 12 weeks of public health emergency leave under the Family and Medical Leave Act (“FMLA”).

• Ten of these 12 weeks are to be paid at a rate of no less than two-thirds of the employee’s usual rate of pay (FMLA leave for all other purposes remains unpaid.) The first two weeks will be paid by Paid Sick Leave above.

• To be eligible for paid leave, employees must have been on the employer’s payroll for 30 days and may use emergency FMLA leave for the following reasons: To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; to care for a family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; and to care for a child of an employee if the child’s school or place of care has been closed.

• The first two weeks of leave may be unpaid; the employee may choose to substitute accrued paid time off or other medical or sick leave during this period, but an employer cannot require an employee to do so. After the first two weeks of unpaid leave, employers must continue paid FMLA leave at a rate of no less than two-thirds of the employee’s usual rate of pay.

• As with traditional FMLA leave, this leave is job-protected and an employer must return the employee to the same or equivalent position upon their return to work. This new law outlines an exception for employers with less than 25 employees if the employee’s job no longer exists due to the coronavirus pandemic, which requires employers to make reasonable efforts to restore the employee to an equivalent position over a one-year period.

• The Secretary of Labor has the authority to issue regulations exempting: (1) certain health care providers and emergency responders from taking leave under the bill; and (2) small business with fewer than 50 employees from the requirements of the bill if it would jeopardize the viability of the business.

For a copy of the law, click here.