With the emergence and spread of the Coronavirus (COVID-19) throughout the world, our country’s full attention is on this pandemic on a daily, if not more frequent, basis. Employers attempt to quickly manage and deal with issues such as remote workforce, sick employees, and school closures. In the meantime, the Federal government signed into law on March 18th a new law called the “Families First Coronavirus Response Act” (FFCRA) in order to assist employees during this crisis, as well as provide certain tax relief to employers.
The FFCRA goes into effect on April 1, 2020, and creates obligations for many employers to provide temporary paid leave. The FFCRA contains two separate laws that provide for paid leave for qualifying employees: a new paid sick leave benefit – the Emergency Paid Sick Leave Act; and an expansion of Family and Medical Leave Act leave – the Emergency Family and Medical Leave Expansion Act.
Below are the main aspects of this new legislation:
Emergency Sick Leave
• Employers who have fewer than 500 workers and governmental entities are subject to the new law.
• Employees who are either full-time or part-time, qualify for paid sick time if the employee is unable to work (or unable to telework) due to one of the following reasons for leave because the employee:
1. is subject to a Federal, State or local quarantine or isolation order related to COVID–19;
2. has been advised by a health care provider to self-quarantine due to concerns related to COVID– 19;
3. is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
4. is caring for an individual who is subject an order described in (1) or self-quarantine as described in (2);
5. is caring for his or her child if the school or place of care of the child has been closed, or the childcare provider of such child is unavailable, for reasons related to COVID–19; or
6. 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.
• Full-time employees who are eligible are entitled to receive 80 hours of sick leave, and part-time employees are granted leave based on their average hours worked in a two-week period.
• Sick leave is available for immediate use regardless of how long the employee has been employed with the employer.
• Employees taking sick leave for themselves (i.e., 1-3 above) will be paid at their normal rate or the applicable state or federal minimum wage, whichever is greater.
• Workers taking time off to care for family members (i.e., 4-6 above) must be paid at 2/3 of the foregoing rate.
• Sick leave is capped at $511 per day and $5,110 in the aggregate for leave under 1 through 3 above, and capped at $200 per day and $2,000 in the aggregate for leave taken in 4 through 6 above.
• Wages paid by employers under the emergency sick leave provisions are not subject to the 6.2 percent social security payroll tax that employers typically pay on workers’ wages.
• Employers cannot require employees to utilize other paid leave before being able to utilize the new paid sick leave under this emergency program.
• Paid sick leave will not carry over to another year and will not be paid out to employees upon separation of employment.
• Employers may not discharge, discipline, or otherwise discriminate against any employee who takes paid sick leave under the FFCRA or files a complaint related to the FFCRA.
• There are certain exclusions, such as (i) employers may exclude an employee who is a health care provider or an emergency responder from paid sick leave benefits; and (ii) certain small businesses may be exempt if they employ fewer than 50 employees and “when the imposition of the requirements would jeopardize the viability of the business as a going concern.”
Emergency Family Leave
• Employers who have fewer than 500 workers and governmental entities are subject to the new law.
• Covered employers will have to provide up to 12 weeks of FMLA leave for employees who have been on the job for at least 30 days, and who are unable to work or telework because they have a bona fide need to care for a minor child when the school or child care provider is closed or unavailable, for reasons related to COVID-19.
• Leave under this section is included in (and not in addition to) the total FMLA leave entitlement of 12 weeks in a 12-month period. For example, if an employee has already taken 6 weeks of FMLA leave, that employee would be eligible for only another 6 weeks of expanded Family and Medical Leave.
• The first 10 days of this leave can be unpaid. However, employees can opt to use any other form of paid leave to be paid for this 10-day period, including the emergency paid sick leave above if not yet utilized.
• For the subsequent days of this leave, the employee will receive a benefit of 2/3 of their normal pay from their employer.
• The paid leave is capped at $200 per day and $10,000 in the aggregate.
• Generally, employees must be restored to their position that they held prior to the leave commencing.
• Wages paid under the emergency family leave provision will not be subject to the 6.2 percent social security payroll tax that employers typically pay on workers’ wages.
• There are certain exclusions, such as (i) employers may exclude an employee who is a health care provider or an emergency responder from paid leave benefits; and (ii) certain small businesses may be exempt if they employ fewer than 50 employees and “when the imposition of the requirements would jeopardize the viability of the business as a going concern.”
Employer Tax Credits
Employers will be able to obtain a dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. In addition, applicable tax credits extend to amounts paid or incurred to maintain health insurance coverage.
The federal Department of the Treasury will be authorized to issue guidance related to the credits. Also, the Department of the Treasury will have further information on its website related to tax credits.
Model Notice
The Department of Labor issued on March 25th its model notice that covered employers must post in their workplace regarding the FFCRA. You may access the notice at: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
The poster must be posted at a conspicuous place at the employer’s premises where notices to employees are customarily posted.
An FAQ is also available at: https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions
Additional U.S. Department of Labor Guidance
The U.S. Department of Labor Wage and Hour Division published its first round of guidance this week to provide information to employers and employees about how they will be able to take advantage of the protections and the relief offered by FFCRA.
There is a Fact Sheet for Employers and a Fact Sheet for Employees, along with a Questions and Answers document – to address important questions such as how to count the number of employees to determine coverage, small employer exceptions and how to calculate employee wages under the new law.
See the Department of Labor’s website: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave; https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave; https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
Further guidance is expected from the DOL/WHD in the coming days and weeks.
Contact Jennifer Frank with questions:
(605) 342-2592
jfrank@lynnjackson.com
909 Saint Joseph Street, Suite 800
Rapid City, SD 57701
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