On March 18, 2020, the President signed the Families First Coronavirus Response Act (“FFCRA”) into law. The information contained herein comes from the text of the FFCRA as well as a Department of Labor posting guidance dated March 24, 2020. For DOL Q&A, click here.
- The FFCRA establishes a right to paid sick leave for coronavirus-related absences and expands the scope of the Family and Medical Leave Act (FMLA) with respect to COVID-19 diagnoses. Eligible employers will be able to claim a limited payroll tax credit if they comply with the FFCRA’s requirements.
- The FFCRA addresses leave for employees in two parts: The Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (the “FMLA Expansion Act”).
- The FFCRA applies to private employers with few than 500 employees and all public employers (together, “Employers”). [There is an exemption for small businesses with fewer than 50 employees when offering paid FMLA leave would jeopardize the viability of the business as a going concern; criteria to be addressed in forthcoming regulations.]
- The EPSLA and the FMLA Expansion Act take effect on April 1, 2020 and are scheduled to expire on December 31, 2020.
- Leave under both acts run concurrently and is not retroactive. Any leave taken before April 1, 2020 does NOT count against FFCRA leave entitlements.
- The Department of Labor has announced that it will not enforce the paid sick leave and expanded FMLA provisions for 30 days to provide employers time to comply. Instead, it will be focusing on compliance assistance during the 30-day period.
Emergency Paid Sick Leave Act
Under the EPSLA, Employers must provide full-time employees with 10 days (80 hours) of paid leave to all employees who need to miss work and are unable to telework because he or she:
- is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- has been advised by a health care provider to self-quarantine related to COVID-19;
- is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
- is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
- is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services.
Who is Eligible for Paid Sick Leave?
- All employees, regardless of the length of employment are eligible for the leave.
- Employers of employees who are “healthcare providers” or “emergency responders” – undefined terms in the Act — may elect to exclude such employees from eligibility for paid leave.
- Part-time employees are entitled to paid sick leave as well, which is based on the numbers of hours worked on average over a two-week period.
What are the Payment Terms?
- Payments are capped at a maximum of $511/day ($5,110 in the aggregate) where the employee is ill or quarantined and $200/day ($2,000 in the aggregate) where the leave is necessary to care for a family member.
- This mandatory paid leave is in addition to any other paid leave already provided to such employees.
- An employer may not require an employee to use their “ordinary” paid leave before the employee uses the paid sick time under the FFCRA.
- Moreover, employers cannot change their paid-time-off policies to limit the total paid sick leave to which their employees are entitled.
How is the Employer Reimbursed?
- Employers who pay FFCRA leave will receive a credit against their payroll taxes, which include withheld federal income taxes from all employees, and the employer and employee shares of Social Security and Medicare taxes.
- These credits allow an employer to claim a credit against the employer’s portion of FICA taxes in an amount equal to the wages paid by the employer under the EPSLA and under the FMLA Expansion Act discussed below (increased by the employer’s share of the Medicare tax on such wages) plus certain qualified health plan expenses paid by the employer with respect to such wage.
- If the payroll taxes are not enough to cover what was paid out in leave, employers will be able to file a request for an accelerated payment from the IRS for the remainder.
- Employers must claim the credits as income on their tax return.
Violations and Enforcement
- The law prohibits employers from discriminating or retaliating against employees who take the sick leave provided and includes penalties for covered employers who fail to provide the required sick leave.
- An employer who fails to pay the mandated sick leave will be considered to have failed to pay minimum wages in violation of the Fair Labor Standards Act (FLSA) and will be subject to the same penalties provided for in the FLSA.
- An employer who unlawfully terminates an employee in violation of FFCRA’s anti-retaliation provision will be considered to be in violation of the FLSA and will be subject to the same penalties provided for in the FLSA.
What are the Notice Requirements?
- Employers must post notice of employees’ rights at their places of business in a conspicuous place.
- The Secretary of Labor will provide a model notice within seven days of the law’s enactment.
- The DOL posting guidance, however, notes that this requirement may be satisfied by emailing or direct mailing the notice to employees, or posting the notice on an employee information internal or external website.
The Emergency Family and Medical Leave Expansion Act
The FFCRA dramatically expands the Family and Medical Leave Act (“FMLA”) by providing, on a temporary basis, 12 weeks of job-protected paid leave to those employees who are unable to work (or telework) due to a need for leave to care for their son or daughter if the school or daycare has been closed or the childcare provider of the son or daughter is unavailable due to a public health emergency related to COVID-19.
Who is Eligible for FMLA Expansion Act Leave?
- An employee has to have been employed for only 30 calendar days, as opposed to the usual 12-month employment requirement.
- Again, this expansion of the FMLA applies to employers with fewer than 500 employees but, just as with emergency paid sick leave, exempts employers of employees who are healthcare providers or emergency responders. Furthermore, the Department of Labor also is permitted to exempt small businesses with fewer than 50 employees when the imposition of the Act’s requirements would jeopardize the viability of the business as a going concern.
What are the Payment Terms?
- After 10 days, employees are to be paid at a rate of at least 2/3 of the employee’s usual rate of pay for the number of hours he or she would usually be scheduled to work, capped at $200/day or $10,000 total per employee.
- The first 10 days of this FMLA may be unpaid, but the employee can elect to use their accrued personal or sick leave during the first 10 days.
What are the Reinstatement Terms?
- Generally, employers will be required to reinstate employees in the same manner as if they took traditional FMLA.
- For employers with 25 or fewer employees, the employer may not have to reinstate the employee who takes leave if the position held by the employee no longer exists due to economic conditions or other changes that were caused by the public health emergency.
- But the employer must make reasonable efforts to restore the employee to an equivalent position with equal pay and benefits, and, if that is not possible, the employer must contact the employee over the following year if an equivalent position becomes available.
How is the Employer Reimbursed?
- Similar to the tax credit under EPSLA, employers will receive a tax credit against their payroll taxes for 100% of the amount paid out to employees using the expanded FMLA.
- If the payroll taxes do not cover the full amount, employees will be issued a check for the remainder from the IRS.