The House of Representatives of the U.S. Congress passed on March 14, 2020, a bill entitled the Families First Coronavirus Response Act  (H.R. 6201) which, in addition to public health relief measures, provides covered employees with sick and medical leave benefits as part of the federal government’s response to the coronavirus 2019 (“COVID-19”) pandemic outbreak.

It is important to note that this bill is not final and that it will probably be modified as it makes its way through the U.S. Senate floor.  This newsletter is only intended to provide information on the bill’s current status.

Emergency Family and Medical Leave Expansion Act

The bill comprising the Families First Coronavirus Response Act  (H.R. 6201) (“FFCRA” or the “Act”) requires that employers with fewer than 500 employees provide its employees up to twelve (12) weeks of leave under the Family and Medical Leave Act (FMLA)(“Emergency FMLA Leave”).  This benefit would be available to employees who have been on the employer’s payroll for 30 days.  Eligible employees may use the Emergency FMLA leave for any of the following qualifying reasons:

• when the physical presence of the employee on the job would jeopardize the health of others because of exposure to COVID-19 or because the employee exhibits symptoms of COVID-19;
• when the employee is unable to perform the functions of the position remotely;
• to care for a family member whose presence in the community would jeopardize the health of other individuals because they have been exposed to coronavirus or exhibit symptoms of the virus; and
• to care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a coronavirus.

The first fourteen (14) 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 fourteen (14) days of unpaid leave, employers must continue to provide Emergency FMLA Leave paid at least two-thirds (2/3) of the employee’s regular rate of pay.  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.

If the bill is approved, the Secretary of Labor has the authority to issue regulations to exempt small businesses with fewer than 50 employees when the imposition of these requirements would jeopardize the viability of the business as a going concern.

The Emergency FMLA Leave takes effect no later than 15 days after enactment of the bill and has a duration of one (1) year as of its enactment.

Emergency Paid Sick Leave Act

Under this section of the FFRCA, employers with fewer than 500 employees must provide employees fourteen (14) days of paid sick leave (“Emergency Sick Leave”), to be paid at two-thirds the employee’s regular rate of pay. Full-time employees are entitled to eighty (80) hours of leave. Part-time employees are entitled to the typical number of hours they usually work on average in a typical two-week period.  This Emergency Sick Leave should be available to the employees for immediate use for the purposes listed below regardless of how long the employee has been employed with the employer. The Emergency Sick Leave is available to employees that:

• have a diagnosis of COVID-19;
• that are quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official, to prevent the spread of COVID-19;
• are caring for another person who has COVID-19 or who is under a quarantine related to COVID-19; or
• are caring for a child or other individual who is unable to care for themselves due to the COVID-19-related closing of their school, childcare facility, or other care program.

The bill 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.

With respect to employers that already provided its employees paid sick days before the enactment of this Act, the Emergency Sick Leave shall be made available in addition to the statutory sick time provided under Puerto Rico’s Law No. 180-1998 (which regulates the accrual, use and payment of vacation and sick time for non-exempt employees) or any other paid sick time the employer was already offering to employees. Employers cannot modify or eliminate its pre-existing paid sick leave benefit after the enactment of the Act.  An employee 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.

Further, 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.

The 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

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) of the Internal Revenue Code (the employer portion of Social Security taxes). Several caps and restrictions apply.
• 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) (the employer portion of Social Security taxes).  Several caps and restrictions apply.

Several provisions of the bill are unclear.  For instance, the bill is not clear about the interplay between the Emergency FMLA Leave, regular FMLA leave, the Emergency Sick Leave, and the sick leave benefits provided under Law No. 180.  Further, it is not clear if there is a maximum amount of paid Emergency FMLA Leave an employer is required to provide after the expiration of the initial unpaid fourteen (14) day Emergency FMLA Leave.

O’Neill & Borges will continue to monitor this bill as it makes its way through the Senate.  Because this bill has not become law, the information provided above may change at any moment.

We will keep updating the information.

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