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Families First Coronavirus Act – Key Provisions for Employers

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Posted in on March 23, 2020

On March 18th, the U.S. Congress passed and President Trump signed, the Families First Coronavirus Act (“FFCA”). FFCA includes numerous sweeping measures designed to help both families and businesses during the COVID-19 pandemic.

What is FFCA? Below is a summary of some of the key provisions of the FFCA for employers.

Emergency Paid Sick Leave

Duration of Emergency Paid Sick Leave

FFCA provides that all employers with fewer than 500 employees (including government employers) must provide Emergency Paid Sick Leave as follows:

  • For full-time employees, employers must provide 80 hours of emergency paid sick leave; and
  • For part-time employees, employer must provide a pro-rated amount that is equal to the average of two weeks of work for the part-time employee.

Eligible Reasons for Emergency Paid Sick Leave

FFCA’s Emergency Paid Sick Leave or FFCA leave may be used by employees if they are unable to work (at their place of work or remotely) for one of the following reasons:

  • The employee (or an individual that the employee is caring for) is subject to COVID-19-related quarantine by the federal, state or local government;
  • The employee (or an individual that the employee is caring for) has been instructed to self-quarantine for COVID-19 reasons by a health care provider;
  • The employee is experiencing symptoms of COVID-19 and is seeking medical diagnosis;
  • The employee is caring for a child whose school or child-care provider is closed due to COVID-19; or
  • The employee is experiencing any other substantially similar condition, as specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Amount of Emergency Paid Sick Leave

The payment amount for Emergency Paid Sick Leave varies depending on the reason for leave as follows:

  • If the leave is due to the employee being quarantined by government order, or in self-quarantine by the advice of a physician or if the employee is experiencing symptoms of COVID-19 and seeking diagnosis, then the amount of leave is the rate at which the employee is normally paid for such time subject to a cap of $511 per day and $5,110 in aggregate per employee.
  • If the leave is for any other reason (to care for someone else in quarantine or advised to self-quarantine, due to school/daycare closures or if the leave falls into the “substantially similar conditions” category), then the amount of the leave is the rate at which the employee is normally paid for such time subject to a cap of $200 per day and $2,000 in aggregate per employee.

Other Important Provisions

  • The FFCA act states that the Emergency Paid Sick Leave provisions go into effect “no later than 15 days after enactment of the law.”
  • The Emergency Paid Sick Leave provisions expire on December 31, 2020.
  • Employers can not require that employees use other paid leave prior to using Emergency Paid Sick Leave.
  • Employees however, can elect to use other paid leave first if they so choose.
  • Employers of health-care workers and emergency responders may elect to exempt such employees from the FFCA provisions.

FMLA Public Health Emergency Leave

FFCA adds a “Public Health Emergency” as a new qualifying reason for employees to receive paid FMLA leave.  The Emergency Family and Medical Leave Expansion Act becomes effective no later than 15 days after becoming law and expires on Dec. 31, 2020.

What’s Different from Traditional FMLA

  • The law amends the Family and Medical Leave Act (FMLA) to provide up to 12 weeks of leave “because of a qualifying need related to a public health emergency.”
  • Prior to the Act, for employees to be eligible for FMLA they had to be employed for a year and have worked a minimum of 1250 hours, however under the FMLA Public Health Emergency Leave, eligible employees only have to have been employed for at least 30 calendar days at the time of the request for leave.
  • The definition of “covered employers” has also changed to now include all private employers with fewer than 500 employees. Under traditional FMLA small business (i.e. fewer than 50 employees) were excluded.
  • Qualified employees are entitled to paid leave.

What is a Qualifying Need

A qualifying need related to a public health emergency arises when the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable because of an emergency with respect to COVID-19 declared by a federal, state or local authority. This amendment narrows the conditions precedent for taking leave.

Employees are Entitled to Paid Leave

  • The first 10 days of leave are unpaid, but an employee may elect to substitute any accrued vacation leave, personal leave or medical/sick leave, and employers are prohibited from requiring the substitution of paid leave.
  • If leave for a qualifying need related to a public health emergency continues beyond 10 days, it must be paid.
  • The leave paid at a rate of two-thirds of employee’s regular rate of pay as determined under the Fair Labor Standards Act (FLSA) and is based on the number of hours the employee normally would have been scheduled to work. For employees with varying work hours, a special formula is provided. In all cases, an employer need not pay an employee more than $200 per day and $10,000 in the aggregate.

Employees are Returned to Pre-Leave Status

  • Generally, employers with 25 or more employees must restore employees to their positions following their return from leave in the same manner as generally mandated by the FMLA.
  • Employers with less than 25 employees also must reinstate employees unless certain conditions are satisfied.

The U.S. Department of Labor (DOL) May Issue Regulations to Provide Exclusions to Assist Small Businesses

The U.S. Department of Labor (DOL) will have the authority to issue regulations to exempt businesses with fewer than 50 employees from having to provide emergency leave if doing so would jeopardize the viability of the business. In addition, an employer of an employee who is a healthcare provider or emergency responder may elect to exclude that employee from the leave provisions provided by the Act.

Employer Tax Credit – Emergency Paid Sick Leave and FMLA PHE Leave

In order to assist employers by offsetting the costs of Emergency Paid Sick Leave and FMLA Public Health Emergency Leave, FFCA creates an employer tax credit. The credit for employers is against the employer’s share of social security taxes.

Tax Credit for Emergency Paid Sick Leave

  • The tax credit corresponds to the amount paid out by the employer
  • Subject to the same caps ($511 per day and $5,110 in aggregate per employee for employee-related leave and $200 per day and $2,000 in aggregate per employee for others-related leave).

Tax Credit for FMLA Public Health Emergency Leave

  • The tax credit corresponds to the amount paid out by the employer
  • Subject to the same caps ($200 per day per employe and $10,000 in the aggregate per employee).

Should you have any specific questions or concerns regarding how FFCA COVID-19 relates to your business please contact Susan Molinari, Esq. or Theresa Barbadoro Koppanati, Esq. at 781-848-9610, we are ready to help.