Families First Coronavirus Response Act: What Employers Need to Know

Families First Coronavirus Response Act: What Employers Need to Know 600 400 Balance Point Team

On March 18, President Trump signed a coronavirus emergency aid package into law named the Families First Coronavirus Response Act. Among the many economic stimulus measures contained in the Act are expanded Family and Medical Leave Act provisions and the introduction of the Emergency Paid Sick Leave Act.

Below, we have summarized what we know so far about this law and how it may impact your business. Some of the language is ambiguous and subject to interpretation. We will keep you updated as information is released.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

This act will temporarily expand coverage and eligibility under the federal Family and Medical Leave Act (FMLA) due to the COVID-19 pandemic.

Effective date: April 1, 2020, and ends on December 31, 2020

Covered employer: The Act expands benefits to employers with fewer than 500 employees

Eligible employee: The Act redefines this as any employee who has been working for the employer for at least 30 calendar days

What are the reasons for EFMLEA leave? Eligible employees are entitled to take up to 12 weeks of leave for “a qualifying need related to a public health emergency.” A new need is identified: eligible employees who are unable to work (or telework) may take leave to care for a minor child if the child’s school or childcare has been closed or is unavailable due to the COVID-19 emergency.

How much pay is required during EFMLEA leave? The first 10 days (two weeks) are unpaid, but an employee can substitute accrued paid leave, including emergency paid sick leave (outlined below). After 10 days, employers are obligated to pay full-time employees two-thirds of their regular rate of pay for the employee’s regular weekly hours for up to 10 weeks. Part-time employees are to be paid at two-thirds of their regular rate for the average number of hours worked over the prior 6 months.

What about restoration to position after leave ends? EFMLEA is job-protected, meaning the employer must restore an employee to the same or equivalent position upon their return to work. However, the new law includes an exception to this requirement for employers with less than 25 employees: if the employee’s position no longer exists due to operational changes caused by a public health emergency, like a dramatic downturn in business (subject to certain conditions.) If the small employer does not return the employee because of operational changes, the employer must make reasonable efforts to provide the displaced employee with an equivalent position for up to one year after if one becomes available.

Emergency Paid Sick Leave Act (EPSLA)

This is a new law that establishes paid sick leave in response to the COVID-19 pandemic.

Effective date: April 1, 2020, and ends on December 31, 2020

Covered employer: A private employer with fewer than 500 employees, a public agency (federal/state governments, political subdivisions, schools), any other entity that is not a private entity, and anyone acting directly or indirectly in the interests of the employer

Eligible employee: Unlike EFMLEA, an employee is immediately eligible for paid sick leave (there is no 30 calendar day requirement)

What are the reasons for paid sick leave? Employers are required to provide paid sick leave to an employee who is unable to work (or telework) because:

  1. the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19
  2. the employee has been advised by a health care provider to self-quarantine because of COVID-19
  3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
  4. the employee is caring for an individual subject or advised to quarantine or isolation
  5. The employee is caring for a son or daughter when the school or childcare provider has closed or ceased operations due to COVID-19 precautions. According to the required IRS documentation, the employee alone must be providing care to the child, not if both parents or another individual is present to care for the child.  Also, in the case of a 15- to 17-year old child, the employee must identify “special circumstances” requiring the employee to provide care 
  6. The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury

How much paid leave is required? Full-time employees are entitled to 80 hours at their regular rate of pay. However, when caring for a family member (for reasons 4, 5, and 6 above), sick leave is paid at two-thirds the employee’s regular rate. Part-time employees are entitled to the number of hours that the employee works, on average, over a 2-week period.

The law limits paid leave to $511 per day ($5,110 in total) where leave is taken for reasons (1), (2), and (3) noted above (generally, an employee’s own illness or quarantine); and $200 per day ($2,000 in total) where leave is taken for reasons (4), (5), or (6) (care for others or school closures).

What is the sequence of, and rules for leave? The new law requires that the employer allow the employee to first use sick leave provided for under this sick leave law, then decide to use any remaining accrued paid leave under an employer’s policy.  The employer cannot require the employee to use accrued leave under an employer policy first.

Tax credits

The Act grants tax credits to ease the financial burden of employers who are required to provide EFMLEA and EPSLA under these requirements. Specifically, the employer can collect a tax credit equal to 100% of qualified emergency sick leave and family leave payments paid by an employer for each calendar quarter.

For more information about theses tax credits, read what the IRS has to say.

Download the Required Poster

The Department of Labor Wage and Hour Division released the required notification poster that will need to be posted in many workplaces and distributed to remote workers. You may access a copy here: Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)

Determine Eligibility

The U.S. Department of Labor launched an interactive online tool to help workers determine FFCRA eligibility. A similar tool for employers will be released soon.

Introducing Our Business Response Package

There has been a lot of information circulating, so it’s understandable if you have questions on how these changes will affect your business. To help, we have a created a new service to help you navigate Emergency Paid Sick Leave and Emergency FMLA included in the FFCRA. Click here to learn more about our Business Response Package.

It is our goal to keep you informed and educated during this challenging time. If you have any questions, click here to schedule a call with us.

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