Understanding Families First Coronavirus Response Act
In response to the COVID19 outbreak, the federal government has passed emergency legislation known as the Families First Coronavirus Response Act (the “Act”), enacted on March 18, 2020. The Act includes, among other things, an emergency expansion of the Family Medical Leave Act (“FMLA”) and paid sick leave, along with an employer tax credit. Whitney Thompson & Jeffcoach, LLC has provided the below summary in order to help our clients navigate the requirements of the Act.
Emergency Family and Medical Leave Expansion Act
The Act amends the FMLA to expand employee eligibility, employer threshold and the definition of a qualifying need. The amended sections are referred to as the Emergency Family and Medical Leave Expansion Act (“EFMLEA”).
Employee Eligibility and Employer Threshold
All private employers with fewer than 500 employees must allow any employee who has been employed for at least 30 calendar days with a “qualifying need” under the Act, defined below, to take EFMLEA leave. Employees taking EFMLEA leave are entitled to the same 12 weeks of job protected leave provided under FMLA. The first 10 days of EFMLEA leave may be unpaid leave, while the remainder must be paid at no less than two-thirds of the employee’s regular rate of pay. Employers may not require an employee to substitute any accrued paid leave for the unpaid leave. However, employees may choose to use accrued vacation days, sick leave, personal leave, or other available paid leave for unpaid time off. While the Act requires employees taking paid EFMLEA leave receive at least two-thirds of the their regular rate of pay, the Act also states that such paid leave shall not exceed $200 per day and $10,000 in the aggregate. At this time, it is unclear how those two provisions will be reconciled.
The Secretary of Labor has the authority to exempt small businesses with fewer than 50 employees from the requirements of the EFMLEA “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” It is not clear at this time how the Secretary of Labor will apply the exemption.
Qualifying Need for EFMLEA Leave
An employee may take EFMLEA leave when he or she is unable to work (or telework) because they must 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, due to a public health emergency.
Restoration of Employment Position
Employers with 25 or more employees will have the same obligation to restore the employee to his or her position or a position equivalent to that held prior to commencing EFMLEA leave. Subject to certain requirements, employers with fewer than 25 employees are generally excluded from this requirement if the employee’s position no longer exists following the EFMLEA leave as a result of COVID19.
Emergency Paid Sick Leave Act
The Act also provides for an emergency expansion of paid sick leave requirements, referred to as the Emergency Paid Sick Leave Act (the “EPSLA”). Similar to EFMLEA, all private employers with less than 500 employees that are engaged in commerce shall be subject to the EPSLA.
Under EPSLA an employer shall provide each employee (regardless of how long that employee has worked for employer) with additional paid sick time if the employee is unable to work (or tele work) because the employee: (1) is subject to a government quarantine or a COVID19 isolation order; (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID19; (3) is experiencing symptoms of COVID19 and seeking a medical diagnosis; (4) is caring for an individual who is subject to a COVID19 isolation order or has been advised as described in paragraph (2); (5) is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions; (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.
The paid sick time obligations set forth in the EPSLA shall begin on April 2, 2020 and shall end on December 31, 2020. At this time, it is unclear how EPLSA leave shall be treated in conjunction with EFMLEA leave. However, an employer may not require an employee to use the accrued sick time, or any other paid leave provided by the employer to the employee, before using the additional sick time provided under EPSLA. Any additional paid sick time under EPSLA shall not carry over from 1 year to the next and shall not be payable upon employee’s separation from employment.
Duration and Payment of Paid Sick Time
Full-time employees shall receive 80 hours of paid sick leave. Part-time employees shall receive sick time equal to the number of hours that employee works, on average, over a 2-week period. California employers will be required to pay sick time at the employee’s regular rate of pay. However, again, there is an apparent cap on the wages an employer must pay under EPSLA at $511 per day ($5,110 in the aggregate) for a use described above in items (1), (2), or (3); and $200 per day ($2,000 in the aggregate) for a use described above in items (4), (5), or (6).
The EPSLA requires that each employer post a notice of EPSLA requirements in conspicuous places on employer’s premises. Within 7 days of the enactment of the Act, the Secretary of Labor shall prepare and make publicly available a template of a notice that meets the employer’s EPSLA notice requirements.
Employer Tax Credit for Expanded Paid Sick and Paid Family Leave
Through the end of 2020, the Act provides a refundable tax credit for employers equal to 100% of the EPSLA or EFMLEA wages paid by employers for each calendar quarter. The credits are subject to limitations and any credit claimed will increase the gross income of the employer for the taxable year.
WTJ remains committed to its clients and community during this uncertain time. Our team is closely monitoring the regulations and we will do our best to provide timely updates. Read the full Act here.