The federal government has passed the Families First Coronavirus Response Act, (FFCRA), signed into law by President Trump on March 18, 2020. Not only does the bill provide for a number of emergency measures to combat the spread of the COVID-19 virus outbreak, but it also makes a number of significant enactments relevant to most employers. The three most dramatic are (1) the new requirement for employers to provide employees affected by the outbreak with paid sick leave, (2) an expansion of the FMLA’s coverage and a requirement to pay paid FMLA leave, and (3) the creation of new tax credits to assist employers who pay these benefits. Please note, although the FFCRA is specific in its intent and direction, there remain many elements that are yet to be defined and clarified. We expect guidance from the Department of Labor as well as required postings. We will keep you updated as guidelines for the application of the FFCRA evolve.
It is important to note at the outset, that the relevant employer-based requirements (both the paid sick leave and FMLA expansion provisions) are limited to employers with fewer than 500 employees (for private employers). Please note that the practical application of its provisions are not yet clearly defined. The Department of Labor has the authority to promulgate rules that will affect the implementation of these provisions. At this point, these emergency provisions run from the effective date of the Act through December 31, 2020.
EMERGENCY PAID SICK LEAVE
A covered employer is required to provide to employees paid sick leave to the extent that an employee is unable to work relative to the COVID-19 outbreak due to:
A federal, state, or local quarantine or isolation order;
The employee has been advised by a health care provider to self-quarantine;
The employee is experiencing symptoms of the disease and is seeking a medical diagnosis;
The employee is caring for an individual subject to a quarantine or isolation;
The employee is caring for a son or daughter if a school or place of care has been closed due to the outbreak; or
The employee is experiencing a substantially similar circumstance.
The law provides a full-time employee an entitlement of up to eighty (80) hours of paid sick leave, and part-time employees the number of hour equivalent to two week period of work. The amount of the payment is calculated based upon the employee’s regular rate of pay or the minimum wage (whichever is greater) with a maximum of $511 per day if employee is affected directly by the virus, or based upon two-thirds (2/3) of the employee’s pay (up to a maximum of $200 per day) if caring for an individual so affected.
Paid sick leave is available for immediate use by employee, regardless of how long he or she may have been employed. Interestingly, the law also prohibits employers from requiring that employees use paid sick leave that the employer already provides before using the sick leave provided by the law. It also includes protections for employees using paid sick leave and prohibits discrimination or retaliation by employers. Lastly, it directs employers to post a notice of rights and update any existing handbooks to be in compliance with its provisions. Again, we anticipate the Department of Labor will issue a posting. We can assist with both postings and handbook updates as required by the FFCRA.
Next, the law makes a number of significant amendments to the Family Medical Leave Act. First, the Act enhances FMLA leave. Now, FMLA may also be used for a qualifying need due to a public health emergency relative to the COVID-19 outbreak. This has been defined to mean “the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”
Second, the law requires an employer to provide paid FMLA leave. Specifically, the first ten (10) days of COVID-19-related FMLA leave shall be unpaid (although an employee may elect to utilize any accrued PTO instead). Thereafter, the employer must provide paid leave to the employee for each day of leave taken afterwards. This leave is to be paid at the rate of no less than two-thirds (2/3) of the employee’s regular rate of pay (as determined under the FLSA), with a maximum amount of $200 per day. Please note, we await clarification as to the effective date, application and sequence of provisions of the FFCRA. We provide this summary to alert you to the law and the changes it may impose on your business and workforce. We encourage you to call us with your questions and allow us to assist you in the navigation of the FFCRA.
Third, the law relaxes the requirements for an employee to become eligible for FMLA leave in these circumstances. An employee may use FMLA leave after working for a period of only thirty (30) days. As noted above, a covered employer is expanded to include one employing fewer than five hundred (500) employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year, instead of fifty (50) or more employees. To account for this change, there is also a provision allowing for the issuance of regulations to exempt employers with fewer than 50 employees if the imposition of the law’s requirements “would jeopardize the viability of the business as an ongoing concern,” as well as health-care providers and emergency responders.
Fourth, similar to normal FMLA leave, an employer is required to protect the employee’s job while the individual is on protected leave. However, an exception has been made for employers with fewer than twenty-five (25) employees where the employee’s job is no longer in existence due to the outbreak. In this scenario, the employer is required to make reasonable efforts to restore the employee to a similar position over the course of the next year.
To assist employers in meeting the new obligations imposed upon them, the law provides tax credits. The provisions outline, in specific detail, criteria and restrictions for tax credit for the varying sections of the FFCRA. By way of example, there are tax credits assigned to the Emergency Paid Sick Leave and a different set for the enhanced FMLA provisions. We will, under separate article, summarize and update you on these requirements and the relief they provide. If you have immediate questions or concerns, please do not hesitate to contact us.
OTHER EMERGENCY MEASURES
The bill also provides a number of other temporary measures designed to help contain the Coronavirus and deal with its impact. Among these are:
- The provision of supplemental funds and the relaxation of rules to all states to continue to provide food assistance to children affected by school closures of 5 or more days, to purchase commodities for emergency distribution, and to support the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and other programs.
The provision of $1 billion dollars of additional money to the states for expanded unemployment compensation benefits.
Prohibiting health insurance carriers from requiring a co-payment or other cost sharing for testing related to the Coronavirus.
Increasing Medicaid payments to the states.
We will keep you updated as matters progress. Please feel free to contact us with any questions or concerns, or to address how this law may specifically impact your operations.