March 20, 2020
President Trump has signed the Families First Coronavirus Response Act (H.R. 6201), which mandates employers with fewer than 500 employees (including many franchisees) provide nearly all employees with emergency paid sick and family leave benefits to use if they are impacted by COVID-19.
See a policy brief of the legislation by the HR Policy Association here.
There are questions regarding how to determine whether a covered employer has fewer than 500 employees depending on the corporate structure of the company, which will have to be resolved by the U.S. Department of Labor's implementing regulations. One potential issue is whether a large corporation's subsidiary with fewer than 500 employees would be covered.
An HR Policy-developed proposal to replace the complicated and unprecedented employer paid leave mandates with expanded unemployment benefits received 50 bipartisan votes, but not the 60 votes needed to amend the measure.
The new law requires employers with fewer than 500 employees to:
A payroll tax credit, up to certain dollar amounts, will help offset the cost of the mandated benefits for small employers.
Both leave mandates are effective April 2, 2020, and sunset on December 31, 2020.
A survey of HR Policy members found 28% are planning to voluntarily provide these paid leave benefits even though they are not eligible for the tax credit, and another 38% are considering it and are likely to provide them.
Outlook: Many details and questions will have to be worked out through rulemaking, which the U.S. Department of Labor will begin to work on immediately. It is possible this sets a precedent for the next Congress and a new administration to apply these leave requirements to all employers, if the current Congress has not already done so by then.