3.19.20 | Client Alert – COVID-19 Update
Last Saturday, the U.S. House of Representatives passed the Families First Coronavirus Response Act, which provides amendments to the Family Medical Leave Act in order to help combat the significant financial hardships that American workers will face in the wake of their efforts to combat the spread of Coronavirus (COVID-19) which, as of this writing, has killed over 163 Americans and has infected over 10,900.
The efforts by the state, municipal and local governments to slow the spread of the COVID-19 virus include the mandatory shuttering of bars, restaurants, and gyms. Five northern California counties, plus the city of San Francisco, and the city of Hoboken in New Jersey have issued ‘shelter in place’ orders.
U.S. Secretary of the Treasury, Steve Mnuchin, recently warned that job losses as a result of these efforts may result in an unemployment rate of up to 20 percent, a rate of joblessness not seen since the Great Depression of 1929-1939. This poses a significant challenge to the U.S. economy given some estimates indicate that roughly a quarter of American workers do not have access to paid sick leave, and nearly 80% of workers live paycheck to paycheck.
In order to prevent a wholesale collapse in aggregate demand, the administration, working closely with the House and Senate leadership, has spent the past week hammering out legislation that would provide provision for sick leave where there currently is none, while at the same time putting money in the hands of consumers.
The initial bill that was passed by the House on Saturday and was overwhelmingly passed by the Senate on Wednesday evening.
Here is what we know so far:
H.R.6201, The Families First Coronavirus Response Act was introduced to the House by Rockland county Democrat Nita Lowey on March 11, and passed the House by a wide margin (363 – 40 with 1 member voting Present) on March 14. The Senate passed the bill on the night of March 18, by a lopsided vote of 90-8.
The legislation seeks to provide paid sick leave and free coronavirus testing, expand food assistance and unemployment benefits, and requires employers to provide additional protections for health care workers.
It is important to note that the Bill will have significant effects on mid-sized businesses across the country as loopholes were carved out for businesses with fewer than 50 employees and for corporations with more than 500 employees.
Division E, Section 5102 of the bill, known as the “Emergency Paid Sick Leave Act,” lays out the details of the proposed paid sick leave package. According to the text of the legislation, full-time employees will be entitled to 80 hours of paid sick leave, while part-time employees are eligible to claim the number of hours equal to the total hours that the employee works, on average, over a 2-week period.
Employers must provide paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- The employee is caring for an individual who is subject to (1) and (2) above
- The employee is caring for a child due to the school or place of care of the child has been closed, or the child care provider is unavailable, due to COVID-19 precautions
The legislation must come into effect no later than 15 days after it is signed into law and will expire on December 31, 2020.
Visit Berdon’s COVID-19 Information Center for more tips to help you, your family and your business navigate through the complexities of the COVID-19 pandemic.