On 3/18/20, the U.S. Senate approved and President Donald Trump signed the Families First Coronavirus Response Act (H.R. 6201) which, in addition to public health measures, provides covered employees emergency paid sick leave and an emergency paid leave under the Family and Medical Leave Act (FMLA) as part of the government’s response to the COVID-19 outbreak. This Act takes effect no later than April 2, 2020.

Following a brief summary of the Families First Coronavirus Response Act (HR 6201) (“FFCRA”or the “Act”).

Covered Private Employers

The paid leaves provided under the Act apply to employers with fewer than 500 employees. The Act allows the US Department of Labor to issue regulations to exempt employers with fewer than 50 employees when compliance with this Act would jeopardize the viability of their business.

Emergency Family and Medical Leave Expansion Act (Division C, Sections 3101-3106)

Covered employers must provide up to twelve (12) weeks of job-protected leave under the FMLA to employees that cannot work or telework for a “qualifying need related to a public health emergency” (“Emergency FMLA Leave”). Unlike the original bill, the only qualifying need that would require the employer to provide this Emergency FMLA Leave is the closure of the employee’s child’s school or place of care, or the childcare provider is unavailable, due to a coronavirus. This benefit would be available to employees who have been on the employer’s payroll for 30 days. Employees who are health care providers or emergency responders may be excluded from this benefit.

The first ten (10) days of leave may be unpaid. If the employee so chooses, he or she may opt to substitute the unpaid period of the leave with accrued sick and vacation leave, or any other paid leave during this period. However, employers may not require an employee to substitute their Emergency FMLA leave for a paid leave.

After ten (10) days of unpaid leave, employers must provide paid leave to the employee for the remaining ten (10) weeks. The leave must be paid at least two-thirds (2/3) of the employee’s regular rate of pay for the number of hours the employee would have been regularly scheduled to work. This benefit is capped at $200 per day and $10,000 in the aggregate.

Employers have the obligation of reinstating the employee to the same or equivalent position upon their return to work. Employers that have fewer than twenty-five (25) employees will be exempted from this requirement if, subject to certain conditions, the employee’s position does not exist after returning from Emergency FMLA Leave due to an economic downturn or other operating conditions that affect employment caused by a public health emergency during the period of leave.

The special paid leave will be available to employees until December 31, 2020.

Emergency Paid Sick Leave Act (Division E, Sections 5101 to 5111)

Covered employers must provide full-time employees eighty (80) hours of paid sick leave (“Emergency Sick Leave”), to be paid at two-thirds the employee’s regular rate of pay to an employee that is unable to work or telework because:

(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 because of COVID-19;

(3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;

(4) the employee is caring for an individual subject or advised to quarantine or self-isolate;

(5) the employee is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions; or

(6) the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Part-time employees are entitled to the typical number of hours they usually work on average in a typical two-week period. Unlike the Emergency FMLA Leave, the Emergency Sick Leave should be available to the employees for immediate use for the purposes listed above regardless of how long the employee has been employed with the employer.

The Act limits the employer’s obligation to pay this emergency paid sick leave to $511 per day when the leave is taken for reasons (1), (2) and (3) above; and $200 per day when the leave is taken for reasons (4), (5) and (6).

Like the expanded FMLA leave, employees who are health care providers or emergency responders may be excluded from this benefit.

The Act also requires that employees be reinstated in their employment upon completion of the Emergency Sick Leave and prohibits employers from retaliating against employees that have taken this leave. Failure to pay this required sick leave will be treated as a failure to pay minimum wages under the Fair Labor Standards Act.

Like the Emergency FMLA Leave, the Emergency Sick Leave will be available to employees until December 31, 2020.

Must these paid leaves be provided in addition to paid leaves the employer currently offers?

With respect to employers that already provided their employees paid sick days in compliance with Commonwealth Law No. 180-1998 (which regulates the accrual, use and payment of sick and vacation time), the Emergency Sick Leave shall be made available in addition to the statutory sick time provided under Law 180 (12 twelve days per year) or any other paid sick time the employer was already offering to employees. Employees may choose to use the Emergency Sick Leave before using any sick time they had accrued under Law No. 180 or any other employer policy. The employer may not require an employee to use their regular paid sick time before using the Emergency Sick Leave.

Can the employer ask the employee taking leave to seek a replacement to cover for him or her while on leave?

Employers may not require, as a condition of taking the Emergency Sick Leave, that the employee find a replacement to cover the hours during which the employee will be using the Emergency Sick Leave.

Do any unused portions of these leaves carry over to the next year?

No. Unused Emergency Sick Leave does not carry over from year to year. The requirements of this Act will expire on December 31, 2020.

Tax Credits for Emergency Paid Sick Leave and Emergency FMLA Leave (Division G, Sections 7001 to 7005)

The portion of the bill provides for a series of refundable tax credits for employers providing paid Emergency Sick Leave or paid Emergency FMLA Leave. Specifically, the bill provides for:

• A refundable tax credit equal to 100 percent of qualified paid sick leave wages required to be paid by the Emergency Paid Sick Leave Act. The tax credit is allowed against the tax imposed by section 3111(a) or Section 3221(a) of the Internal Revenue Code (the employer portion of Social Security taxes). Self-employed individuals may claim a similar credit against taxes imposed by Subtitle A of the U.S. Internal Revenue Code of 1986. Several restrictions apply to the application and amount of this credit.

• A refundable tax credit equal to 100 percent of qualified family leave wages required to be paid by the Emergency Family and Medical Leave Expansion Act. The tax credit is allowed against the tax imposed by section 3111(a) or 3221(a) (the employer portion of Social Security taxes). Self-employed individuals may claim a similar credit against taxes imposed by Subtitle A of the U.S. Internal Revenue Code of 1986. Several restrictions apply to the application and amount of this credit.

• A refund will be paid to possessions of the United States with mirror code tax systems with respect to their loss of revenues in connection with the application of the credit to self-employed individuals. Possessions of the United States that do not have mirror code tax systems (such as Puerto Rico) will receive amounts estimated by the Secretary of the Treasury equal to the aggregate benefits that would have been provided to their residents by reason of the credits allowed to qualifying self-employed individuals.

Our attorneys are available to assist you regarding any questions you may regarding this Act or its implementation.

By: José F. Benítez, Esq.
Member, Labor and Employment Department
O’Neill & Borges LLC

Note: Because of the general nature and informative purpose of this newsletter, nothing herein should be considered as legal advice or a legal opinion. For further information about the contents of this newsletter, or should you need further assistance in connection with these matters, please contact any of the attorneys of the firm’s Labor & Employment Group.