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Families First Coronavirus Response Act
The Families First Coronavirus Response Act was signed into law on March 18, 2020. This Response Act contains two particularly important provisions for employers: the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. These two acts are separate acts but share many similarities. The United States Department of Labor has provided preliminary guidance (https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave) and is expected to issue further regulations in the coming days on these new emergency provisions. Both the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act become effective 15 days after being signed into law, which sets the current effective date as of April 2, 2020. Below is a summary of the most relevant portions of these two Acts.
Emergency Paid Sick Leave Act
Which employers does the Emergency Paid Sick Leave Act apply to?
The Emergency Paid Sick Leave Act applies to all employers with 500 or fewer employees, subject to very limited exceptions, discussed below.
Which employees qualify for paid sick leave under the Emergency Paid Sick Leave Act?
Paid sick leave must be provided by covered employers to those who are 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 an order as described in subparagraph (1) or has been advised as described in paragraph (2).
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
There is no waiting period for employees to be eligible for paid sick leave under this Act. An employee becomes entitled to such leave on his or her first day of employment. An employer cannot require an employee to use other paid leave provided by the employer before the employee uses the paid sick leave.
How many hours of sick leave pay must be provided under the Emergency Paid Sick Leave Act?
Full-time employees are entitled to 80 hours of paid sick leave (i.e. 2 weeks). Part-time employees are entitled to a number of hours equal to the number of hours that such employee works, on average, over a 2-week period.
Paid sick leave will stop, beginning with the employee’s next work shift immediately following the termination of the need for paid sick leave.
How much sick leave pay must be provided to an employee taking leave under this Act?
The amount of sick leave pay is calculated based on the employee’s normal rate of compensation and the number of hours the employee would otherwise be scheduled to work. Leave under reasons 1-3 above is paid at an employee’s daily rate of pay, with a max cap of $511 per day ($5,110 in the aggregate). Leave under reasons 4-6 above is paid at 2/3 of an employee’s daily rate of pay, with a max cap of $200 per day ($2,000 in the aggregate). As an additional note, employees qualifying for leave under reason 5 will also qualify for leave under the Emergency Family and Medical Leave Expansion Act, discussed in detail below, and will likely be eligible for an additional ten weeks of paid leave.
Other employer requirements under this Emergency Paid Sick Leave Act
An employer may not discharge, discipline or discriminate against any employee who takes leave in accordance with this Act. Employers must post a notice provided by the Department of Labor on the premises of the employer where notices to employees are generally posted. It is expected that the notice will be released by March 25, 2020 by the Department of Labor.
Is there an exemption from the emergency paid sick leave requirements?
A very limited exemption exists. The Secretary of Labor has authority to issue regulations which may exempt small business with fewer than 50 employees from providing emergency paid sick leave for leave under reason 5 above (caring for a child because school or child care is unavailable because of COVID-19 precautions) if providing such leave would jeopardize the viability of the small business as a going concern. There are no exemptions for providing paid sick leave under reasons 1-4 or 6. As of March 23, 2020, the Secretary of Labor has not yet issued regulations or guidelines for qualifying for this exemption.
An employer of health care providers and emergency responders may elect to exclude such employees from eligibility for the paid sick leave under this Act.
Emergency Family and Medical Leave Expansion Act
Which employers does the Emergency Family and Medical Leave Expansion Act apply to?
The Emergency Family and Medical Leave Expansion Act applies to all employers with 500 or fewer employees, subject to very limited exceptions, discussed below.
Which employees qualify for leave under the Emergency Family and Medical Leave Expansion Act?
Leave must be provided under Emergency Family and Medical Leave Expansion Act to employees with children under 18 whose schools or places of care have closed or the normal child care provider is unavailable because of the public health emergency (i.e. COVID-19). To be eligible, an employee must have been employed for at least 30 calendar days by the employer. If the necessity for leave under this Act is foreseeable, an employee shall provide the employer with such notice of leave as is practicable.
How much leave must an employer provide to an eligible employee under the Emergency Family and Medical Leave Expansion Act?
The Employer must provide an eligible employee with up to 12 weeks of leave under the Emergency Family and Medical Leave Expansion Act (which may overlap with leave under the Emergency Paid Sick Leave Act).
Is leave under the Emergency Family and Medical Leave Expansion Act paid leave?
If an employee qualifies for leave under the Emergency Family and Medical Leave Expansion Act, then the employee also qualifies for paid leave under reason 5 of the Emergency Paid Sick Leave Act. Thus, for the first 10 days of such qualifying leave under, the employee is paid at their qualifying rate under the Emergency Paid Sick Leave Act (2/3 regular rate of pay, capped at $200 per day). After the first 10 days of leave and the need for leave under the Emergency Family and Medical Leave Expansion Act still exists, paid leave continues to be paid at 2/3 of the employee’s regular rate of pay, capped at $200 per day. The total aggregate amount paid to an employee taking leave qualifying under reason 5 of the Emergency Paid Sick Leave Act and under the Emergency Family and Medical Leave Expansion Act is $12,000 ($2,000 for sick leave and $10,000 for family leave).
What are the requirements after the employee returns from leave under the Emergency Family and Medical Leave Expansion Act?
The traditional requirements under the standard Family and Medical Leave Act apply to employees returning to work: the employer must restore the employee to the same or equivalent position upon return.
Provided, however, employers with fewer than 25 employees may be excepted from this requirement if all the following conditions apply:
- The position held by the employee when they leave began is no longer available due to economic conditions or other changes in operating conditions that were caused by the public health emergency during the period of leave.
- The employer makes reasonable efforts to find an equivalent position to the position the employee held when the leave began.
- If the employer is unable to restore to an equivalent position, the employer must make reasonable efforts to contact the employee and restore the employee to an equivalent position if an equivalent position becomes available within a one year period beginning on the earlier of the date on which the reason for the leave to public health emergency end or 12 weeks after the date on which the public health emergency begins.
Is there an exemption from the Emergency Family and Medical Leave Expansion Act requirements?
The Secretary of Labor has authority to issue regulations which may exempt small business with fewer than 50 employees from providing leave under the Emergency Family and Medical Leave Expansion Act if providing such leave would jeopardize the viability of the small business as a going concern. As of March 23, 2020, the Secretary of Labor has not yet issued regulations or guidelines for qualifying for this exemption.
An employer of health care providers and emergency responders may elect to exclude such employees from eligibility for the paid sick leave under this Act.
How is the United States Government helping businesses pay for leave under Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion Acts?
Leave payments paid by an employer under both the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act qualify as refundable tax credits against payroll taxes payable by the employer. Employers are entitled to a refundable tax credit equal to 100% of the required qualified leave paid under the Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion Acts. If the amount paid to employees is greater than the employer’s payroll taxes, the employer will be reimbursed for the amount of the overpayment. The amount of the tax credits are capped at the same levels as the cap of payable leave under the Acts. The IRS has stated that where a refund is payable, it will endeavor to send such refund as quickly as possible.
Initial guidance by the IRS on these tax credits has been posted here: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus
Additional regulations are anticipated in the coming days.
Can AWD LAW® help me?
AWD LAW® attorney John Carlson has been closely following these new legal developments. Please contact him if you have questions or concerns about complying. John can be reached at [email protected] or at (928) 774-1478.