On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”), which takes effect on April 2, 2020. The FFCRA’s provisions apply to small employers (those with fewer than 500 employees), and this legislation creates a Paid Leave structure and expands the Family and Medical Leave Act. The FFCRA’s provisions expire on December 31, 2020. Here is what you need to know.
Emergency Paid Sick Leave Provisions
Under the FFCRA, private employers with fewer than 500 employees and all public employers must provide full-time employees with 10 days (80 hours) of paid leave to all employees who need to miss work and are unable to telework because:
(1) they are subject to a government quarantine or isolation order related to COVID-19;
(2) they have been advised by healthcare providers to self-quarantine due to COVID-19;
(3) they are experiencing symptoms of COVID-19 and are seeking a medical diagnosis;
(4) they are caring for an individual subject to a quarantine order or self-quarantine;
(5) they are caring for children under the age of 18 without school or childcare because of the COVID-19 pandemic; or
(6) they are 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.
Note: Part-time employees are entitled to the number of hours of paid sick time equal to the number of hours they work, on average, over a two-week period.
Eligibility and Exemptions
All employees, regardless of the length of employment are eligible for the leave. Employers of employees who are healthcare providers or emergency responders may elect to exclude such employees from eligibility for paid leave. (Note: the Act doesn’t define the terms “healthcare provider” and “emergency responder”). Furthermore, the Department of Labor is empowered to exempt small businesses with fewer than 50 employees under certain circumstances.
Rate of Pay
This mandatory paid leave is in addition to any other paid leave already provided to such employees. Payments are capped at a maximum of $511/day ($5,110 in the aggregate) where the employee him or herself is ill or quarantined and $200/day ($2,000 in the aggregate) where the leave is necessary to care for a family member.
Furthermore, an employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time under the FFCRA.
Each quarter, employers subject to the requirement are entitled to a fully refundable tax credit equal to 100% of the qualified paid sick leave wages paid by the employer.
Emergency paid sick leave under the FFCRA prohibits employers from requiring employees to find a replacement employee to cover their shift when the employee is using emergency paid sick leave. Additionally, emergency paid sick leave does not need to be paid out on termination of employment and cannot be used intermittently.
Expansion of Family and Medical Leave Act
The FFCRA dramatically expands the Family and Medical Leave Act (“FMLA”) by providing, on a temporary basis, 12 weeks of job-protected paid leave to those employees who are unable to work (or telework) due to a need for leave to care for their son or daughter if the school or daycare has been closed or the childcare provider of the son or daughter is unavailable due to a public health emergency related to COVID-19.
Eligibility and Exemptions
To be eligible for this FMLA, an employee only has to have been employed for 30 calendar days, as opposed to the usual 12 month employment requirement. Again, this expansion of the FMLA applies to employers with fewer than 500 employees but, just as with emergency paid sick leave, exempts employers of employees who are healthcare providers or emergency responders. Furthermore, the Department of Labor also is permitted to exempt small businesses with fewer than 50 employees in certain circumstances. Note that recent Department of Labor guidance indicates that federal employees may not be entitled to this expanded FMLA.
Rate of Pay
After 10 days, employees are to be paid at a rate of at least 2/3 of the employee’s usual rate of pay for the number of hours he or she would usually be scheduled to work, capped at $200/day or $10,000 total per employee. The first 10 days of this FMLA may be unpaid, but the emplooyee can elect to use their accrued personal or sick leave during the first 10 days.
Generally, employers will be required to reinstate employees in the same manner as if they took traditional FMLA. For employers with 25 or fewer employees, however, the employer may not have to reinstate the employee who takes leave if the position held by the employee no longer exists due to economic conditions or other changes that were caused by the public health emergency. In this scenario, the employer must make reasonable efforts to restore the employee to an equivalent position with equal pay and benefits, and, if that is not possible, the employer must contact the employee over the following year if an equivalent position becomes available.
Employers subject to these requirements of expanded FMLA are entitled to receive a fully refundable tax credit equal to 100% of the qualified FMLA wages paid by the employer.
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