Eric J. Uhl / March 21, 2020
On March 18, 2020, the President signed the Families First Coronavirus Response Act (“FFCRA”). The FFCRA goes into effect 15 days after passage, on April 2, 2020. Included in the FFCRA are several provisions that apply to employers, including expanded FMLA protections and paid sick leave requirements for employees affected by COVID-19. The new law require the Department of Labor to issue model notices for employers to post to provide employees with information about the paid leave entitlements.
Emergency Family and Medical Leave Expansion Act
The FFCRA includes expanded employer coverage and employee eligibility under the new Emergency Family and Medical Leave Expansion Act (“Emergency FML Act”). The Emergency FML Act expands protections under the Family and Medical Leave Act (“FMLA”) on a temporary basis, through December 31, 2020.
Covered Employers and Eligible Employees. The expanded protections under the Emergency FMLA Act apply to employers with fewer than 500 employees (as opposed to the existing coverage for employers with 50 or more employees). Employees who have worked for an employer for at least 30 days are eligible to receive the emergency family and medical leave.
Covered Leave. Under the Emergency FML Act, an eligible employee may take up to 12 weeks of leave—if they are unable to work or telework—to care for the employee’s child (under 18 years of age) if: (1) the child’s school or place of care is closed, or (2) the childcare provider is unavailable, due to COVID-19.
Unpaid and Paid Leave. The first 10 days of covered emergency leave is unpaid. During this 10-day unpaid leave period, an employee may elect to use accrued PTO to cover some or all of the unpaid leave. However, there is no provision that would allow an employer to require an employee to use PTO during the 10-day unpaid leave period.
For covered leave after the initial 10-day period, employers must pay employees at 2/3 the employee’s regular rate of pay for the number of hours the employee would normally be scheduled to work for the work week. Employees who do not work a regular work week are entitled to paid leave based on the average number of hours the employee worked for the six months prior to taking the emergency leave, or if the employee worked fewer than six months, the average number of hours the employee is scheduled to work. The paid leave entitlement is limited to $200 per day, and $10,000 in the aggregate, for each employee.
Job Protection. Under the Emergency FML Act, employers have the same requirement as under the existing FMLA to return employees to the same or equivalent position after expiration of the emergency leave. However, the new law includes an exception for employers with under 25 employees if the employee’s job was eliminated due to an economic downturn or other reasons related to the outbreak.
Expected Regulations. The new law states that the Secretary of Labor may issue regulations to exclude certain healthcare providers and emergency responders from the definition of employees who are eligible to take the new expanded leave. In addition, the Secretary of Labor may also exempt small businesses with fewer than 50 employees if the required leave would jeopardize the viability of the business.
Emergency Paid Sick Leave Act
The FFCRA also includes the Emergency Paid Sick Leave Act (“EPSLA”) to provide paid sick leave to employees under specified circumstances related to COVID-19. As with the Emergency FML Act, this new sick leave provision is scheduled to end on December 31, 2020.
Reasons for Sick Leave. The EPSLA requires a covered employer to provide paid sick leave to an employee if the employee is:
- subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- advised by a health care provider to self-quarantine due to COVID-19 concerns;
- experiencing COVID-19 symptoms and seeking medical diagnosis;
- caring for an individual (not just family members) subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
- caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to COVID-19; or
- experiencing any other substantially similar condition as specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Covered Employers and Eligible Employees. The EPSLA applies to employers with fewer than 500 employees. All employees are eligible, regardless of how long they have been employed. However, the new law includes an exception for employers who are healthcare providers or emergency responders.
Amount of Paid Leave. The EPSLA requires covered employers to provide full-time employees with 80 hours of paid sick leave, and part-time employees with the number of hours that is equal to the number of hours worked over a 2 week period. Employers are required to pay employees (1) at the employee’s regular rate of pay for qualifying reasons 1, 2, and 3 above; and (2) at 2/3 the employee’s regular rate of pay for qualifying reasons 4, 5, or 6 above. The EPSLA limits paid sick leave to $511 per day, $5,110 total, for each employee for qualifying reasons 1, 2, and 3, and limits paid sick leave to $200 per day, $2,000 total, for each employee for qualifying reasons 4, 5, and 6. Note that employees may elect to use emergency paid sick leave during the 10-day unpaid leave period under the Emergency FML Act.
No Carryover. The emergency paid sick leave does not carry over to the following year, and it is in addition to any paid sick leave currently provided to employees.
Tax Credits For Paid Sick And Paid Family And Medical Leave
The FFCRA provides for refundable tax credits for employers required to provide the emergency paid sick leave under the EPSLA and emergency family and medical leave under the Emergency FML Act. The tax credits are allowed against the employer’s portion of Social Security taxes. Employers will be reimbursed if their costs exceed the taxes they would owe.
Under this provision, employers are entitled to a refundable tax credit equal to 100% of the qualified paid sick leave payments made for each calendar quarter under the EPSLA. The qualified paid sick leave payments are capped at $511 per day (or $200 per day if the leave is for caring for a family member or child), for up to 10 days per employee in each calendar quarter.
For paid emergency family and medical leave under the Emergency FML Act, employers are entitled to a refundable tax credit equal to 100% of the qualified family and medical leave payments made for each calendar quarter. The qualified family and medical leave payments are capped at $200 per day for each individual, up to $10,000 total per calendar quarter. Only employers who are required to offer paid leave under the Emergency FML Act and EPSLA are eligible to receive the credits.
Please contact us if you have any questions about these new laws or any other issues during this difficult period of time.
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