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Lawmakers working on emergency paid time off legislation in light of virus

State and federal lawmakers have been busy crafting emergency legislation to provide paid time off for workers affected by the COVID-19 coronavirus pandemic. The the new legislation was not finalized by Wednesday afternoon so employers should stay informed on new developments that could impact their business.

Ibrahim Tariq

Ibrahim Tariq

“If there’s anything that I think is most important for employers, it’s that they should be … monitoring what’s happening both at the Congressional level … and at the state level,” said Tariq Ibrahim, an associate in the labor and employment group at Harris Beach PLLC.

The impact of the COVID-19 pandemic has been “a shockwave to all businesses,” he said.

Employers with 50 or more employees are already subject to the Family Medical Leave Act (FMLA), which grants 12 weeks of leave for a serious health condition. That leave also protects jobs. And employees who take leave under the FMLA are entitled to the restoration of their jobs when they return.

Proposed legislation that protects jobs at smaller companies is a big change that was not mandated by existing laws.

“The biggest thing that I’m seeing from businesses is a concern over how are we going to pay employees who take sick leave or family leave due to COVID-19 if we do not have a revenue stream coming in during this crisis,” Tariq said.

On Wednesday, Tariq explained the key points of state and federal legislation now under consideration.

The Senate is expected to take action this week on the Families First Coronavirus Response Act, which would implement sweeping changes to employer paid sick leave plans, family leave plans, and unemployment insurance eligibility.

Employees impacted by COVID-19 would get paid leave and unemployment benefits. Employers would get relief through federal tax credits.

The federal bill is expected to amend the FMLA to cover all private-sector employers with less than 500 workers for certain COVID-19 related reasons. Generally, the FMLA currently covers all private employers with 50 or more employees, and all public employers regardless of employee count.

Under the amended FMLA, all public employers would stay covered, while smaller private employers who were not previously covered would be covered for employee leave related to COVID-19.

As of Wednesday, it was not clear why the proposed bill did not cover employers with 500 or more employees. Congress may be considering separate legislation to cover those firms.

Under the most recent version of the Congressional bill, employers covered by the amended FMLA will be required to provide up to 12 weeks of job-protected leave for employees who need to care for a child under the age of 18 if the child’s school or place of care has closed due to the pandemic.

The first 10 days of leave taken to care for a child whose school has closed would be considered unpaid FMLA leave. But employees would be allowed to use accrued vacation or other accrued paid time off during this time.

Full-time employees would be entitled to their full pay for up to 80 hours (or the equivalent of two full weeks) for certain coronavirus-related leaves.

Part-time employees would be entitled to paid time equivalent to the average number of hours that they work in a two-week period.

After the first 10 days of coronavirus-related leave, employers would be required to pay employees two-thirds of the employee’s usual rate of pay per week.

Employees could elect to use accrued vacation or paid time off during that period. Pay would be capped at a maximum of $200 per day or a total of $10,000.

Employees who take leave under the FMLA are entitled to return to their position at the end of the leave. The amended FMLA also would entitle workers to return to their jobs when they return from coronavirus-related leave, with some exceptions for employers with less than 25 employees.

The Congressional bill also would create a new nationwide Paid Sick Leave Act covering all private employers with fewer than 500 employees and all public-sector employers.

Employers would have to provide paid sick time for employees who: (1) are self-isolating because the employee is diagnosed with coronavirus, (2) obtain a medical diagnosis if the employee is experiencing symptoms consistent with coronavirus, (3) have to comply with a quarantine order of their health provider or public official, (4) have to care or assist a family member who is self-isolating because the family member has been diagnosed with coronavirus, or is experiencing symptoms and needs a medical diagnosis, or (5) have to care for a child if the child’s school is closed.

Employers with existing paid sick leave policies will be required to provide any accrued sick time in addition to the paid sick time provided to employees under the Paid Sick Leave Act.

The bill also earmarks $1 billion in federal emergency grant money to the states for unemployment benefits. Of that $1 billion, $500 million is designated for additional funding for states to revamp their administrative procedures for applying for and paying out unemployment insurance benefits. The other $500 million would be reserved as emergency grant funding to states that experience a 10% increase in unemployment.

New York state has already taken action to relax eligibility rules for unemployment. Normally, laid-off workers had to wait seven days after their layoff to file for unemployment insurance. The state Department of Labor has waived the seven-day waiting period for those who are out of work due to COVID-19 closures or quarantines.

Employers should take special caution to mark any leave taken by employees during this period, as this leave time could have retroactive implications on employees’ leave under the Congressional bill.