As many of you already know, last night, Trump signed into law the Families First Coronavirus Response Act (FFCRA). Among other things, FFCRA (1) expands the requirements of the Family and Medical Leave Act to small businesses with less than 500 employees to require unpaid and paid leave to employees under certain conditions – referred to as the Emergency Family and Medical Leave Expansion Act within the FFCRA; and (2) requires small businesses with less than 500 employees to also provide paid sick leave benefits to employees for up to two weeks – referred to as the Emergency Paid Sick Leave Act within the FFCRA.
We are providing a summary of key questions below and will keep you apprised of additional information and guidance as it becomes available.
When Does the Act go into Effect?
The requirements of the FFCRA go into effect 15 days after its enactment – or April 1, 2020 – and will remain in effect through December 31, 2020.
What Businesses Are Covered?
Generally, small businesses with less than 500 employees are required to comply with the FFCRA.
Are there any Exclusions?
There are three (3) primary exclusions for small businesses. The FFCRA states that:
- The Secretary of Labor can issue regulations for good cause to exclude certain health care providers and emergency responders from the requirements to provide paid leave required by the Emergency Family and Medical Leave Expansion Act.
- The Secretary of Labor can also issue regulations for good cause to exclude a small business with less than 50 employees from the Emergency Family and Medical Leave Expansion Act “when the imposition of such requirements would jeopardize the viability of the business as a going concern”. It is currently unclear whether this exemption also applies to the Emergency Paid Sick Leave Act as well.
- Small businesses with less than 25 employees are not required to restore an employee to their position following leave taken under the Emergency Family and Medical Leave Expansion Act.
NOTE: As soon as we obtain any guidance from the DOL on the exclusions listed above, we will update you.
Will the Federal Government Reimburse Businesses?
Employers will receive reimbursements in the form of a credit against taxes that are paid each calendar quarter equal to 100% percent of qualified paid benefits provided to employees. The credit is allowed against the employer portion of social security taxes. The Act also provides that if the credit exceeds the employer’s total liability for social security taxes for any calendar quarter, the excess is refundable to the employer.
The credit is subject to certain caps (summarized below):
- For paid sick leave under the Emergency Paid Sick Leave Act, the credit is capped at $511/day for sick leave paid to employees who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation and $200/day for sick leave paid to employees who are caring for a family member or for a child whose school or place of care has been closed.
- For paid leave provided under the Emergency Family and Medical Leave Expansion Act, the tax credit is capped at $200 per day and $10,000 in the aggregate for all calendar quarters.
What are the New Leave Requirements?
Emergency Family and Medical Leave Expansion Act
Employees who have worked for the business for 30 days or more (regardless of the number of hours worked) are eligible for up to 12 weeks of job-protected leave if the employee is unable to work (or telework) because they must care for a son or daughter due to the child’s primary or secondary school (or child care facility) being closed or unavailable because of a public health emergency declared due to COVID-19.
- The first 10 days of leave are unpaid, but the Act allows employees to choose to substitute accrued paid leave provided by the employer (including Emergency Paid Sick Leave). Employers cannot require substitution of other paid leave.
- After the first 10 days, the employee may take up to an additional 10 weeks of paid leave. The paid leave during these 10 weeks must be provided at least 2/3rds of the employee’s regular rate of pay for the number of hours the employee would otherwise be scheduled to work. However, this is capped at a maximum of $200/day and $10,000 total.
Emergency Paid Sick Leave Act
Employers must provide all employees with paid sick time if the employee is unable to work (or telework) due to the following:
- The employee has been advised by a health care provider to self-quarantine due to COVID-19;
- The employee must comply with a government quarantine order related to COVID-19;
- The employee is seeking a medical diagnosis of COVID-19 and is experiencing symptoms;
- The employee is caring for an individual subject to a quarantine, isolation order or has been advised to self-quarantine related to COVID-19;
- The employee is caring for a child whose school or child care facility has been closed or is unavailable due to COVID-19 precautions; and
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.
Full-time employees are eligible to take up to 80 hours of pack sick leave; part-time employees are provided with a pro-rated amount. Payment is made as follows:
- Employees must be paid their regular rate of pay for leave taken due to the reasons 1-3 listed above: 1 (self-quarantine), 2 (government order) and 3 (medical diagnosis). This is capped at $511/day and $5,110 in the aggregate.
- Employees must be paid at 2/3rds of their regular rate for leave taken due to the reasons 4-6 listed above: 4 (caring for an individual), 5 (caring for a child), and 6 (other government-specified conditions). This is capped at $200/day and $2,000 in the aggregate.
This paid sick leave is provided above and beyond the employer’s sick leave or PTO policy (if applicable) and any other paid sick leave required by law.
Do Businesses Have to Notify Employees of Their Rights under the FFCRA?
Yes, the FFCRA requires that all employees post a notice in a conspicuous place for all employees regarding their rights under the Act. For employers with remote staff – and given our current environment of remote working for many – we would advise that you post the notice at your office (if applicable) and email the notice to all staff. NOTE: The FFCRA requires that the Department of Labor prepare this required notice within the next 7 days. As soon as we have additional information, we will forward that on to you.
Please contact us with any questions.