WHAT THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA) MEANS FOR EMPLOYERS
Under the Families First Coronavirus Response Act (FFCRA), which includes emergency paid sick leave and an expansion of FMLA, employers with fewer than 500 employees must provide paid sick leave to employees who miss work because of qualifying COVID-19 reasons. Employers will be fully reimbursed, dollar-for-dollar, for the cost of providing coronavirus-related leave to their employees. The provisions go into effect April 1, 2020 and expire on December 31, 2020.
Employers who closed their worksite before April 1, 2020 do not have to provide paid sick leave or expanded family and medical leave to employees. It doesn’t matter whether the worksite was closed for lack of business or whether it was required to close by federal, state or local order. Employers who close their worksite, even for a short period of time, or furlough employees because of a lack of work or business do not have to provide paid leave under the FFCRA to employees. However, these employees may be eligible for unemployment insurance benefits.
Emergency Paid Sick Leave
Employers with fewer than 500 employees are required to provide employees with up to 80 hours of paid sick leave if the employee is unable to work due to COVID-19. There is no minimum length of employment required for the employee to be eligible.
Eligible employees can take paid sick leave for one of the following qualifying reasons:
- The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to COVID-19 concerns.
- The employee is experiencing COVID-19 symptoms and seeking medical diagnosis.
- The employee is caring for an individual who is subject to reasons 1 or 2 listed above.
- The employee is caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to COVID-19 precautions.
- The employee 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.
Employees must be paid at their regular rate of pay for qualifying reasons 1, 2 or 3. Employees must be paid at two-thirds their regular rate of pay for qualifying reasons 4, 5 or 6. A part-time employee is entitled to paid leave for the average number of work hours normally scheduled in a two-week period. For more details about calculating pay for part-time employees or employees whose schedule varies from week to week, please see the answer to Question 5 in the Department of Labor’s FAQ.
There is a cap on how much paid sick leave an employee can receive. For the employee’s own use, paid sick leave is capped at $511 per day (up to $5,110 total.) To care for others, paid sick leave is capped at $200 per day (up to $2,000 total.) Once again, the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80.
Health care providers and emergency responders can be excluded by their employer.
Employers cannot require their employees to use other available paid leave before or in place of using the paid leave available under this law. Paid sick leave and expanded family medical leave under the FFCRA are in addition to employees’ preexisting leave entitlements. Note that there is no carryover of this paid sick leave to the following year.
Emergency FMLA Expansion
FFCRA temporarily expands FMLA to allow up to 12 weeks of job-protected leave for eligible employees who can’t work because their child’s school or childcare service has been closed for reasons related to COVID-19.
The expansion covers all employees who work for an employer with fewer than 500 employees. (Currently, FMLA applies only to employers with more than 50 employees.) The eligibility requirement based on length of employment has also been revised. Any employee who has worked for an employer at least 30 days may be eligible to receive paid family and medical leave.
Pay under the Emergency FMLA Expansion Act:
- The first 2 weeks will be covered at two-thirds the employee’s regular rate under the Emergency Paid Sick Leave described above. After the first 2 weeks, the employer is required to pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would have been scheduled to work.
- Overtime hours must be included in pay under the expanded FMLA if the employee normally works more than 40 hours in a week. However, pay does not need to include a premium for overtime hours.
- These paid leave benefits are capped at $200 per day up to $12,000 total per employee (2 weeks of paid sick leave described above followed by up to 10 weeks of paid expanded family and medical leave.)
Small Business Exemption
Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened. You must document why your business meets the criteria for exemption. Do not sent materials to the DOL. This will be addressed in more detail in forthcoming regulations.
See more details about the small business exemption in Question 58 of the Department of Labor’s FAQ.
Small businesses with fewer than 25 employees are not required to reinstate an employee at the end of leave period if the employee’s position has been eliminated due to economic conditions or other changes in operation caused by COVID-19, and the employee isn’t able to provide the employee with an equivalent position, or if the employee is a highly compensated key employee as defined under the FMLA.
See the exemption criteria in Question 43 of the Department of Labor’s FAQ.
Complete Employer Coverage for Qualifying Leave Paid Under the FFCRA
Employers receive 100% reimbursement for paid leave pursuant to the Act.
- Health insurance costs are also included in the credit.
- Reimbursement will be quick and easy to obtain. An immediate dollar-for-dollar tax offset against payroll taxes will be provided
- If the leave paid is greater than the amount of payroll taxes owed, employers will file a request for a refund from the IRS, which the IRS expects to process in two weeks or less.
- The IRS has announced it will provide guidance soon about tax credits and the new expedited process for requesting accelerated payment from the IRS.
What Else Do Employers Need to Know
Please refer to the Department of Labor’s FAQ for additional information and clarification including details about how teleworking is addressed under the FFCRA and if paid leave can be taken intermittently.
30 Day Non-Enforcement Period. The DOL will observe a 30-day non-enforcement period for good faith compliance efforts and will focus on compliance assistance during this period.
Employee Notice. Covered employers must post a notice of FFCRA requirements in a conspicuous place at each worksite.
May an employee take 80 hours of paid sick leave for self-quarantine and then another amount of paid sick leave for another reason provided under the Emergency Paid Sick Leave Act?
No. The employee may take up to two weeks—or ten days—of paid sick leave for any combination of qualifying reasons, but the total number of hours of paid sick leave is capped at 80 hours.
What records do employers need to keep when employees take paid sick leave or expanded family and medical leave?
If you intend to claim a tax credit under the FFCRA for your payment of sick leave or expanded family and medical leave wages, you should retain appropriate documentation in your records. You should consult Internal Revenue Service (IRS) applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit, including any needed substantiation to be retained to support the credit. You are not required to provide leave if materials sufficient to support the applicable tax credit have not been provided. The IRS will offer more guidance soon about the tax credit and reimbursement process.
If an employee is home with his/her child because the child’s school or place of care is closed, does the employee get paid sick leave, expanded family and medical leave, or both—how do they interact?
The employee may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. For more information see Question 10 of the DOL’s FAQ.
Are the paid sick leave and expanded family and medical leave requirements retroactive?
Anthros will continue to provide clients with up-to-date information as new guidance and information is released by the Department of Labor and the IRS.