The Families First Coronavirus Response Act (“FFCRA”) was enacted into law on March 18, 2020. There are two separate sections of the FFCRA that apply to private employers with fewer than 500 employees and to public entities employing 1 or more employees.
The law provides unpaid and paid family leave and additional paid sick time to eligible employees who are unable to work because they are dealing with health or family matters related to the COVID-19 public health emergency.
For employers wondering how they are going to pay for these additional emergency benefits, the legislation provides employers with a payroll tax credit for payments made to employees under these provisions. We are awaiting final guidance on the specifics of these payroll tax credits, including whether they will be immediately available to employers.
The emergency family leave and sick time benefits become effective on April 2, 2020, and will expire on December 31, 2020. Below is a description of each of these temporary emergency benefits.
The Emergency Family and Medical Leave Expansion Act
Expansion of FMLA to Include Unpaid and Paid Leave Needed for Child Care
The Emergency Family and Medical Leave Expansion Act expands the Family and Medical Leave Act (“FMLA”) to enable employees who have at least 30 days of tenure with a covered employer to take up to 12 weeks of leave “because of a qualifying need related to a public health emergency.” This is defined to mean that the employee requesting the leave is unable to work (or telework) due to a need to care for the employee’s minor child whose school or place of care has been closed or whose care provider is unavailable due to a public health emergency related to COVID-19 that is declared by a federal, state or local authority. Employees will be able to request this type of leave starting on April 2, 2020.
The leave provided to eligible employees is unpaid for the first 10 days; however, the employee may elect to substitute any accrued paid time (vacation, personal days, medical or sick time) available to the employee during these 10 days. Thereafter, each day of leave taken must be paid calculated at 2/3 the employee’s regular rate of pay as determined by the Fair Labor Standards Act, multiplied by the number of hours the employee would normally be scheduled to work, subject to a per-employee cap of $200 per day and $10,000 in the aggregate. If the employee’s hours are variable or the employee has not worked for the employer for more than 6 months, the law provides for a special method of calculation based on average daily hours worked in the last 6 months, or, for new employees, anticipated daily hours of work (“Alternative Rate Calculation”).
Employee Notice and Return of Employees to Same or Equivalent Position
If need for leave is foreseeable, the employee is to provide the employer with such notice as is practicable as to the need for leave.
Like all FMLA leave, this leave is job-protected, meaning that employees are to be returned to their same positions or equivalent positions after the leave. However, the Act does include some leeway for small employers employing fewer than 25 employees if the position that the employee held prior to leave no longer exists due to economic conditions or changes in the operating conditions of the employer affecting employment and caused by the public health emergency. However, in this circumstance, the employer must make reasonable efforts to return the employee to an equivalent position, or, if none is then available, to make contact with the employee during a 1-year period, if an equivalent position becomes available during that time.
There are special rules for employers that are signatory to a multiemployer bargaining agreement or that participate in and make contributions to a multiemployer fund, plan or program. In these situations, the rules allow the employer to make contributions of the amounts that would otherwise be payable to the multiemployer fund, plan or program which would in turn make the required payments to the employees.
Exceptions for Employers with Fewer than 50 Employees
Employers with fewer than 50 employees are covered by this new expansion of the FMLA through December 31, 2020, but are not subject to other state and federal FMLA provisions. The law enables the Secretary of Labor to issue regulations that exempt small businesses with fewer than 50 employees from having to provide this paid leave when imposition of such requirements would jeopardize the viability of the business as a going concern. This would be a discretionary determination based on the particular facts. We will be awaiting further word from the Secretary of Labor regarding application of this important exception.
Exceptions for Health Care Providers
With respect to health care entities, the law provides that employers of individuals who are health care providers or emergency responders may elect to exclude such employees from the application of the FMLA amendments. The law also enables the Secretary of Labor to issue regulations that exclude certain health care providers and emergency responders as employees eligible to take this type of leave. Once again, we will be awaiting further word on this important detail.
Emergency Paid Sick Leave Act
Additional Paid Sick Time and When It Can Be Used
A separate section of the FFCRA requires covered employers to provide emergency paid sick time to employees for use when the employee is unable to work (or to telework) due to a need for leave because of any of the following 6 reasons:
- The employee is subject to a quarantine or isolation order related to COVID-19 issued by federal, state or local authority.
- 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 is seeking a medical diagnosis.
- The employee is caring for an individual who is subject to a federal, state or local order to quarantine or isolate related to COVID-19 or who has been advised to do so by a health care provider.
- The employee is caring for their child whose school or daycare has been closed or whose daycare provider 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 Secretaries of the Treasury and Labor.
Amount of Paid Sick Time
The amount of paid sick time that is available is limited. Full-time employees receive 80 hours of paid sick time, and part-time employees receive sick time equal to the number of hours worked on average over a 2-week period. The amount that is payable to an employee for each day of emergency sick time is calculated based on the employee’s regular rate of pay as determined under the Fair Labor Standards Act or the applicable federal, state or local minimum wage rate, whichever is higher, multiplied by the number of hours that the employee would otherwise be normally scheduled to work. When the employee works variable hours or is an employee with less than 6 months of tenure, then the Alternative Rate Calculation is used, as described above.
The sick time payable to the employee is subject to a cap depending on the reason for the use of this time. If sick time is used for the employee’s own health circumstances, as noted under 1, 2 or 3 above, then it is paid at the full rate, but is capped at $511 per day or an aggregate of $5,110. If the employee is using the sick time for the reasons noted under 4, 5, or 6 above, then it is paid at 2/3 of employee’s regular rate or 2/3 of the applicable minimum wage, whichever is greater, up to a cap of $200 per day or an aggregate of $2,000. By April 2, the Secretary of Labor is to issue guidelines to assist employers in calculating the amount of paid sick time available to eligible employees. As this pandemic progresses, state and local stay-in-place orders, which are being issued currently in some areas, could prompt the use of paid sick time under scenario 1 above.
Timing of Paid Sick Time and Rules Applicable to Usage
The right to use paid sick time ends on the next regularly scheduled work shift immediately following the termination of the need to take this type of leave. The employee is eligible to use paid sick time immediately regardless of how long the employee has been employed by the employer. The employer cannot require the employee to find an employee to cover their shift as a condition for using the paid sick time. It is up to the employee to determine whether to use paid sick time before other types of paid leave available. The employer cannot dictate any sequence for use of the paid sick time but can require the employee to follow reasonable notice procedures after the first day that sick time is used. Paid sick time does not carry over into next year and employers are not required to pay out unused sick time on the employee’s separation from employment. Nothing in the law diminishes an employee’s rights under any existing law, collective bargaining agreement, or under the employer’s existing policies.
Exceptions for Employers of Fewer than 50 Employees
Like the family leave provisions, this section also provides for regulations to be issued to exempt small businesses with fewer than 50 employees from having to provide the paid sick time when imposition of these requirements would jeopardize the viability of the business as a going concern. These regulations have not been issued yet.
Exceptions for Health Care Providers
This section of the law also provides the Secretary of Labor with authority to issue regulations for good cause to exclude certain health care providers and emergency responders from the definition of “employee” under the paid sick time provisions, including by allowing the employer of health care providers and emergency responders to opt out. We are also awaiting these regulations.
Payroll Tax Credits
The government will provide relief to employers for payments made to employees under both the paid sick time and the paid family leave provisions by way of credit that can be taken against the employer’s share of payroll taxes owed on the wages paid to all employees on a quarterly basis.
Credits for paid family leave cannot exceed $200 per day or $10,000 per employee. Credit for additional paid sick time cannot exceed $511 per employee per day, is limited to 10 days, and is in effect for wages paid through December 2020. If the amount of the credit payable to the employer exceeds taxes to be paid, then the law provides that the excess shall be treated as an overpayment and subject to refund. We are awaiting details on the application of the payroll tax credit as well.
We’re Here to Help
If you have questions regarding the FFRCA or any other employment matter arising in connection with the COVID-19 pandemic, please reach out to us. We continue to work remotely and are available to help with your questions and needs. Stay safe and be well during these unprecedented times.
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