Families First Coronavirus Response Act Expands Emergency FMLA and Paid Sick Leave

On March 19, 2020 the Families First Coronavirus Response Act was passed and signed into law. This new law requires employers with less than 500 employees to provide paid sick leave and paid family leave in certain situations.  At the same time, the law also provides a refundable payroll tax credit to employers to cover 100% of the cost of wages.  This law becomes effective on April 2, 2020 and will remain in effect until December 31, 2020.

Amendments to the Emergency Family and Medical Leave Expansion Act (FMLA)

  • The law lowers the eligibility requirement to any employee who has been employed for at least 30 calendar days by the employer with respect to when leave is requested.
  • These employers are now required to provide up to 12 weeks of job protected leave to employees that are unable to work (or telework) in order to care for a child if the child’s school or day care is closed due to a public emergency (COVID-19).
    • The first 10 days are unpaid. During this 10-day period, however, an employee may elect to substitute any accrued paid leave (e.g., vacation or sick leave) to cover some or all the 10-day unpaid period.  This can include the 10 days of emergency sick leave also passed with the act.
    • After the 10-day period, the employer must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled.
    • Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA.
    • This paid leave benefit is capped at $200 per day and an aggregate of $10,000.
  • Employers with 25 or more employees will have the same obligation as under traditional FMLA to return any employee who has taken Emergency FMLA to the same or equivalent position upon the return to work.
      • Employers with less than 25 employees are generally excluded from this requirement if the employee’s position no longer exists following the Emergency FMLA leave due to an economic downtown or other circumstances caused by a public health emergency during the period of Emergency FMLA.
      • This exclusion is subject to the employer making reasonable attempts to return the employee to an equivalent position and requires an employer to make efforts to return the employee to work for up to a year following the employee’s leave.

     

Emergency Paid Sick Leave Act

    • These employers are now required to provide paid sick time if the employee is unable to work (or telework) for the following reasons:
      • 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 COVID–19 concerns.
      • The employee is experiencing symptoms of COVID–19 and is seeking a medical diagnosis.
      • The employee is caring for an individual 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.
      • The employee is caring for their child and is unable to work (or telework) in order to care for a child if the child’s school or day care is closed due to COVID-19.
    • Employers must offer two weeks (10 days) of paid sick leave for the above COVID-19-related reasons (regardless of the employee’s duration of employment prior to the leave).
      • Full-time employees will be entitled to up to 80 hours of paid sick leave.
      • Part-time employees will be entitled to their average number of hours worked for the six months prior to taking sick leave.
    • If the sick leave is for the employee who is sick or seeking a diagnosis, the benefit must replace all the employee’s wages up to a maximum benefit of $511 per day and $5,110 total.
    • If the sick leave is to care for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day and $2,000 total.

 

Payroll Tax Credit

  • There are a refundable tax credits for employers who are required to provide the above sick leave and emergency FMLA. These tax credits are allowed against the employer portion of Social Security taxes.
  • The paid sick leave credit offsets 100% of employer costs for providing mandated paid sick leave.
  • The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.

 

The Act does, however, include language allowing the Secretary of Labor to exclude healthcare providers and emergency responders from the definition of employees who are allowed to take such leave, and to exempt small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business.  Employers with less than 50 employees must apply for a hardship exemption in order to qualify.

PBO’s HR Consulting Team can help you manage through this and other COVID-19 related human resources challenges.

For more information on how PBO can assist you, contact Laura Nieman, PHR at Laura@pboadvisory.com or 858.935.4844

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