On March 18, 2020, the Senate voted to approve, and President Trump signed, the Families First Coronavirus Response Act (the Act). The Act is substantively the same as the version approved by the House of Representatives on March 16, 2020, is effective no later than 15 days after the date of the enactment, and sunsets on December 31, 2020. The Act contains two important paid leave provisions: the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. Additionally, it provides a Tax Credit to Employers providing paid leave under the Act. The DOL has since released four sets of FAQs on the Families First Coronavirus Response Act clarifying responsibilities and rights under the FFCRA.
The Emergency Family and Medical Leave Expansion Act
As previously communicated, the Act amends the FMLA to allow employees of employers with fewer than 500 employees and government employers to take up to 12-weeks of job-protected leave for a “qualifying need related to a public health emergency.”
A “public emergency” is defined as an emergency with respect to COVID-19 as declared by a Federal, State, or local authority. A “qualifying need” means an employee is unable to work, telework, or care for their child(ren) under 18 years old whose school or childcare provider has closed or is unavailable due to a public health emergency. This definition is slightly more limited than that passed under the version approved by the House.
Employers who are health care providers or emergency responders are not required to provide this type of FMLA leave and the Secretary of Labor has the authority to exempt employers with fewer than 50 employees if the provision of this paid FMLA leave “would jeopardize the viability of the business as a going concern.” Employers are generally required to reinstate employees after their FMLA leave period ends, but there are exceptions in the Act for employers with fewer than 25 employees experiencing significant economic hardship.
The first 10 days of leave may be unpaid or taken as accrued leave under the employer’s paid leave policies. After the initial 10-day period, the employer must provide paid leave based on an amount that is not less than 2/3rds of the employee’s regular rate of pay and the number of hours the employee is normally scheduled to work. There is a cap of $200 per day and $10,000 in the aggregate for this paid leave.
One important fact to note is that under the FMLA, employees must have been employed for at least 12-months prior to the period of leave for FMLA eligibility. The Act reduces this requirement to 30-calendar days for these events.
The Emergency Paid Sick Leave Act
The Act requires employers (except health care providers or emergency responders) with fewer than 500 employees to provide paid sick leave to employees in the following circumstances:
- 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 (1) is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is caring for a son or daughter whose school or place of care is closed, or the child care provider is unavailable, due COVID-19 precautions; or
- 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.
It is important to note that the paid sick leave is to be provided to employees, regardless of length of employment with the employer. Full-time employees are entitled to 80 hours of paid leave and part-time employees are entitled to the average number of hours the employee works over a 2-week period. Paid leave ends with the next scheduled work shift following the period of leave.
If the employee is sick, the rate of pay is the higher of the employee’s regular rate or minimum wage with a maximum of $511 per day and $5,110 per employee in the aggregate. If the sick leave is for “any other substantially similar condition” or to care for a family member or child who is sick, the required sick pay is 2/3rds of the regular rate of pay with a maximum of $200 per day and $2,000 per employee in the aggregate.
Notably, there is no requirement to exhaust any accrued paid leave under the employer’s paid leave policy prior to receiving paid sick leave. Additionally, employers may not discharge, discipline, or discriminate against employees taking leave or filing complaints about the employer’s failure to provide the leave.
Paid Leave Tax Credits
The Act provides refundable tax credits to employers providing paid leave. The credits apply against the employer position of Social Security Taxes and are equal to 100% of the “qualifying” amount of sick and FMLA leave up to the maximum amounts provided above. Employers will also receive a tax credit equal to the employer’s cost to maintain the group health plan benefits for employees receiving paid leave under the Act. However, employers may not take a deduction for the amount received in a tax credit.
BASIC FMLA Administration
BASIC is perfectly situated to help employers with the complexities of the Families First Coronavirus Response Act. Our case managers help employers navigate the new regulations, drastically reducing employer administration time. BASIC mails all necessary paperwork to employees, certifies leave requests and tracks leave hours for “E” FMLA, Emergency Paid Sick Leave, and FMLA. Request an FMLA Administration proposal today and reduce your noncompliance risks.
COVID-19 HR Updates
Authored by Catherine Rische | JD, LLM, Compliance Officer
Catherine (Cat) Rische is the Senior Compliance Officer here at BASIC. She has extensive experience working with employers and ERISA plan sponsors as an employee benefits attorney. Her umbrella of experience includes, but is not limited to, strategic benefit design, and technical legal compliance under ERISA, COBRA, HIPAA, ACA, LMRA, FMLA, and MHPAEA.