FMLA and Federal Sick Leave Amendments and Unemployment Summary Points

03.21.2020 Written by Kristopher N. Kazmierczak

March 21, 2020 — While we know and encourage that the top priority must be the health and safety of our clients and their employees and respective families, we also are aware that businesses are faced with newly developing challenges as a result of COVID-19. Please know that because the Firm invested in robust remote work technology our lawyers remain available to answer your legal questions and provide our support in all aspects of business, contract and employment.

FMLA AND FEDERAL SICK LEAVE AMENDMENTS AND UNEMPLOYMENT SUMMARY POINTS

Below is a summary of current unemployment and FMLA and Sick leave under new federal law amendments to go into effect April 2, 2020 and expire on December 31, 2020. The leave applies to all employers with less than 500 employees.

NOTICE and DISCLAIMER: A lot of things are in flux right now, so the points outlined may be modified and should serve only as a guideline, not legal advice to be relied upon in making decisions. If you have specific questions, please do not hesitate to contact us.

Executive Summary

Other than unemployment benefits, the amendments do not provide income continuation for employees displaced due to closing or limiting of business operations.

  1. FMLA type leave and protection is extended to employees who have worked 30 days.
    1. First 10 days unpaid (cannot require employee to take PTO first);
    2. Second 10 days paid at 2/3 of compensation;
    3. Qualifying reason is limited to an employee is who unable to work (or telework) due to a need for leave to care for a son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency;
    4. Does not apply to employee’s own condition;
    5. Note, certain types of employees are exempt, like health care providers and emergency responders.
  2. Sick Leave. Full time employees are entitled to 80 hours of paid leave for qualifying events to self-isolate or seek medical diagnosis or treatment following diagnosis or exhibition of symptoms, to follow health care or public official recommendation or orders, to care for family members who are self-isolating or seeking medical diagnosis or treatment, or to care for children following school closures or unavailability of childcare. Paid leave at 100% for self and 2/3 for all others.
  3. Indiana Unemployment Executive Order Initiatives
    1. Employees laid off or terminated due to COVID-19 may recover unemployment benefits, so long as not terminated under the previously recognized “just cause” standards;
    2. The Indiana Department of Workforce Development will allow individuals to continue to accrue unemployment eligibility if they take work leave because of COVID-19;
    3. Benefits will be paid to individuals who file their initial unemployment claims late;
    4. The Department of Workforce Development plans to seek federal authorization to provide unemployment benefits for those who are not otherwise eligible, such as individuals who have recently started a job;
    5. For employers, the state will not assess certain experience rate penalties because of employees who receive unemployment benefits because of COVID-19.

AMENDMENT TO FMLA – "PUBLIC HEALTH EMERGENCY LEAVE"

  • Covered Employers: Fewer than 500 employees
  • Eligible Employees:
    • worked at least 30 calendar days; AND
    • is unable to work or telework because the employee is required to care for son or daughter under 18 if school or place of care is closed due to COVID-19 related public health emergency
  • Unpaid and Paid Portions of Leave
    • Unpaid leave for initial 10 days. Employee may elect, but cannot be required, to take paid leave.
    • Employer may, but is not required, to provide paid leave for first 10 days, or full pay on and after the second ten day leave period.
    • Paid leave to be provided for each day of leave after 10th day. Pay at 2/3 of regular rate x number of hours they usually work up to maximum of $200/day and $10,000 in aggregate.
      • If varying schedule, determine average they have worked over 6 month period preceding leave including hours for which they took leave of any type OR if they didn't work over 6 months, determine "reasonable expectation of Employee at time of hiring".
    • Like other FMLA leave, up to 12 weeks of leave, or when condition has ended, whichever is earlier.
    • Notice to be provided by employee as soon as practicable.
      • Employee must be restored to position except for employers with less than 25 employees if: (a) position no longer exists due to economic conditions or other changes in operations that are caused by public health emergency; AND (b) employer makes reasonable effort to restore employee to equivalent position; AND (c) reasonable efforts fail; AND (d) employer makes reasonable effort to contact employee if equivalent position becomes available within 1 year of date on which qualifying need for leave ceases or 12 weeks after employee’s leave commences.
    • Employer to provide notice of available leave to employees upon employer learning of qualifying event.

Tax/Funding/Exemption Issues:

  • Each quarter, private sector employers are entitled to a fully refundable tax credit equal to 100% of paid FMLA wages under this section. The tax credit is applied against Social Security taxes, but employers are reimbursed if their costs exceed the taxes they would owe.
  • The amount of the tax credit is increased by the amount of expenses of the employer health care plan allocable to the sick leave.
  • Paid FMLA is not considered wages for Social Security tax purposes and for half of the Hospital Insurance Tax. For the other half of Hospital Insurance Tax, the applicable tax credit is increased to cover the cost of the payroll tax.
  • There is a similar tax credit against any self-employment taxes for individuals who are self-employed, but who would otherwise be qualified for paid FMLA if they were an employee of an employer.
  • Employees with less than 50 employees are exempt from civil actions brought by employees for violations of the amended FMLA leave.
  • Employers of employees who are health care providers or emergency responders may elect to exclude such employees from this paid amended FMLA leave.

EMERGENCY PAID SICK LEAVE ACT

Covered Employers: Fewer than 500 employees

Eligible Employees: The Emergency Paid Sick Leave Act requires all covered employers to provide immediately-available, paid sick leave time to all employees, regardless of how long they have been employed by the employer.

Summary of Qualifying Events for Sick Leave

  • The Sick Leave Act provides leave for several reasons arising out of the Coronavirus pandemic, including (a) subject to Federal, State or local quarantine or isolation related to COVID-19, (b) to self-isolate or seek medical diagnosis or treatment following diagnosis or exhibition of symptoms, (c) to follow health care or public official recommendation or orders, (d) to care for family members who are self-isolating or seeking medical diagnosis or treatment, or (e) to care for children following school closures or unavailability of childcare.

Qualifications

  • To qualify for Sick Leave, an employee must have a qualifying need related to a Coronavirus-related emergency declared by a federal, state, or local authority. A “qualifying need” is a need by the employee:
    • to comply with a recommendation or order by a public official or a health care provider on the basis that the physical presence of the employee would jeopardize the health of others either because of exposure of the employee to coronavirus or because of the employee’s exhibition of symptoms of coronavirus, and the employee is unable to both perform the functions of the position and simultaneously comply with the recommendation or order; or
    • to care for a family member with respect to whom a public official or a health care provider makes a determination that the presence of the family member in the community would jeopardize the health of others either because of exposure of the family member to coronavirus or exhibition by the family member of symptoms of coronavirus; or
    • to care for the minor child of the employee if the child’s elementary or secondary school or place of care has been closed or the child care provider is unavailable due to a coronavirus-related emergency declared by a federal, state, or local authority.
    • “family member” is defined to include not just an employee’s spouse, parent, or minor child, but also to any person who is next of kin, a grandchild or grandparent, or a child of the employee and who (a) is a pregnant woman; (b) is a senior citizen; (c) is an individual with a disability; or (d) has access or functional needs. The definition of “parent” is broadened to include parents of the employee’s spouse or domestic partner.

Number of Sick Leave Hours Provided

  • Full-time employees are entitled to 80 hours of paid sick leave, and part-time employees are entitled to sick leave equivalent to those hours the employee works, on average, over a 2-week period for the reasons summarized under subparagraphs (a) through (d) above.
  • For subparagraph (e), full-time employees are eligible for up to 12 weeks of leave (2 paid sick leave followed by 10 weeks paid of FMLA) at 40 hours per week. Part-time employees are eligible for leave at the numbers of hours employee is normally scheduled to work.
  • Where the employee takes leave for his or her own self-isolation, medical diagnosis, or treatment, (subparagraphs (a) through (c)) the employee is entitled to paid leave at 100% of his or her regular rate of pay. However, where leave is taken to care for a family member or child (subparagraphs (d) through (e)), employers only are required to provide leave at two-thirds the employee’s regular rate of pay.
  • This Sick Leave is in addition to an employer’s existing paid sick leave policies. Employers may not change current policy to avoid this result.
  • Additionally, employers are prohibited from requiring that employees use employer-provided vacation time, sick time, or other paid time off before using paid sick leave under the Sick Leave Act.

Dollar Amounts

  • Capped at $511 per day and $5,110 in the aggregate for reasons in subparagraphs (a) through (c).
  • Capped at $200 per day and $2,000 in aggregate for reasons in subparagraphs (d) through (e) – taking care another, childcare issues, etc.
  • Notice is required to be posted by employer.
  • Where leave is foreseeable, an employee should provide notice of leave to the employer as is practicable.
  • After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving paid sick time.

Notice

  • Notice is required to be posted by employer.
  • Where leave is foreseeable, an employee should provide notice of leave to the employer as is practicable.
  • After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving paid sick time.

Tax Credit

  • Provides for a payroll tax credit for the Sick Leave Act

UNEMPLOYMENT

  • An individual receiving paid sick leave or paid family leave is still receiving pay. Thus, generally speaking, the individual is not “unemployed,” so the individual is ineligible for unemployment insurance.
  • The Indiana Department of Workforce Development (DWD) will host two live webinars for Hoosiers impacted by the COVID-19 crisis on March 24 and 25 at 10:30. Details on DWD’s website.
  • The state will interpret Indiana’s unemployment laws to the broadest extent possible to cover Hoosiers who are out of work because of COVID-19.
  • The DWD provides a FAQ on its website, a few of the helpful tips include:
Q: If an employee decides to remain at home because of COVID-19 with no directive from a medical professional or from the employer to do so, is the employee eligible for unemployment insurance (UI) benefits?
A: In most cases, no. However, the facts of each circumstance are important. You can file and DWD will evaluate your claim.
Q: If an employee is not working due to COVID-19 and is receiving sick pay or other leave pay from an employer, is he eligible for unemployment insurance (UI) benefits?
A: No, individuals receiving sick pay or other leave pay are not eligible for unemployment insurance (UI) benefits. However, the facts of each circumstance are important. The DWD encourages employee to still file and DWD will evaluate the claim.
  • The maximum amount of benefits is $390 per week.

For more information on FMLA or other questions related to COVID-19 and its impact on your business, contact:

Kristopher N. Kazmierczak

email Kris

Direct: 317-615-4230

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