Published on March 19, 2020
On March 18, 2020, Congress passed, and President Donald Trump signed, the latest Coronavirus aid package into law – the Families First Coronavirus Response Act (FFCRA). The law will go into effect on April 1, 2020 and remains in place until December 31, 2020. This law creates new obligations for employers to provide paid leave during certain absences relating to COVID-19. Here are some highlights that employers should know:
Which employers are covered?
The FFCRA applies to (1) certain public employers and (2) all private employers with fewer than 500 employees. The Department of Labor also has the option of exempting companies with fewer than 50 employees if providing paid leave “would jeopardize the viability of the business as a going concern.” Rulemaking is underway to provide guidance on how the Department will determine who meets that threshold.
Certain health care providers and emergency responders may be excluded. Additionally, employers with less than 25 employees may not have to restore employees to their previous positions if certain criteria are met.
What type of leave must employers provide?
The law creates two new types of leave for certain COVID-19 related absences:
- Emergency Paid Family and Medical Leave. The law expands the federal Family and Medical Leave Act (FMLA) by requiring employers to provide up to 12 weeks of job-protected leave to employees who have worked for an employer for at least 30 days, most of which leave is paid.
- Emergency Paid Sick Leave. Covered employers must provide full-time employees with up to 80 hours of paid sick leave, while part-time employees are entitled to paid sick leave equal to the amount of hours they typically work in a two-week period. This is in addition to any other paid sick leave provided to employees under state law or city ordinances.
Which employees qualify for these emergency benefits?
Employees qualifying for emergency benefits generally are those who are quarantined, caring for a family member who is infected or quarantined, or affected by school and daycare closures.
For emergency family and medical leave, employees are eligible if they are unable to work or telecommute due to the need to care for a child at home due to school or daycare closure, or unavailability of a paid child care provider, because of COVID-19.
For emergency paid sick leave, employees qualify for the sick leave benefits under the following six categories:
- 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 concerns related to COVID–19.
- The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
- The employee is caring for an individual who fits into paragraphs (1) or (2) above.
- The employee is caring for a child whose school or place of care has been closed, or if the child care provider is unavailable, due to COVID–19 precautions.
- The employee is experiencing any other substantially similar condition.
How much must employers pay?
For emergency family and medical leave, the first 10 days are unpaid (a period designed to be covered by emergency paid sick leave). For the remainder of the 12 weeks, employers must pay two-thirds of the employee’s usual rate of pay, capped at $200 per day and $10,000 total per employee.
For emergency paid sick leave, employers must provide 80 hours of full pay to qualified employees who are sick or quarantined (categories 1-3, above), up to a maximum of $511 per day and $5,110 total per employee. Employers must pay two-thirds the employee’s regular rate of pay to employees who use emergency paid sick leave to care for someone who is sick or quarantined or to care for children whose schools or daycare facilities are closed (categories 4-6, above), up to a maximum of $200 per day and $2,000 total per employee.
What tax credits are employers entitled to receive for the amounts they pay?
Covered employers will receive a tax credit of 100% of the benefits paid up to the employee caps. Per the above, caps are $200/day up to $10,000 total for the emergency family and medical leave portion and for emergency sick leave the cap is the $511/day up to $5100 total if the employee is the one sick or quarantined or $200/day up to $2,000 total if the employee is caregiving. The credit is applied against payroll tax liability for the calendar quarter, and is refunded if the total credit exceeds the employer’s liability for that quarter.
What notice must employers provide?
Covered employers must post a notice created by the Department of Labor, available here. If employees are teleworking, employers should email the notice to employees or post it on an internal company website that employees regularly access.
Can existing sick leave count as emergency sick leave?
The emergency sick leave provided under the FFCRA is an extra two weeks of leave in addition to other leave offered by employers in compliance with local, state, or federal law or voluntary employer leave policies.
Is the leave job protected?
Generally, leave provided under the FFCRA is job-protected. Limited exceptions are available for employers with fewer than 25 employees, if certain criteria are met.
Can employers require employees to use accrued leave first?
Under the FFCRA, employers cannot force an employee to use vacation or other sick leave before they are eligible to use emergency paid sick leave or emergency family and medical leave.
What happens on termination or expiration of the FFCRA?
Employees have no right or entitlement to a payout of unused leave upon separation from employment. All emergency paid sick leave expires on December 31, 2020 and does not carry over to 2021.
The FFCRA is the second in what is likely to be a three-part stimulus package addressing the current COVID-19 outbreak. The FFCRA’s provisions also expand unemployment assistance, nutrition assistance, and increase resources for COVID-19 testing.
The Senate and President Trump are already working together on a third relief package that could include direct payments to families. The Treasury Department has provided a detailed two-page outline of the key parts of this proposal. The proposal includes funds to support the airline industry and other distressed sectors of the economy, two rounds of direct payments to taxpayers based on income level and family size, and an extension of small business loans to cover business interruptions due to COVID-19, with a 100% guarantee of the loans by the government.
Ryan Swanson will continue to monitor this pending legislation. Check back on Ryan Swanson’s COVID-19: Alerts & Resources for Businesses page to see the latest updates as the law and responses to COVID-19 continue to evolve.
If you have questions, please feel free to contact any member of the Employment Rights, Benefits & Labor Group at Ryan Swanson.
This webpage is provided for general informational purposes only and does not constitute legal advice.