The Families First Coronavirus Response Act is now a Law as signed by President Donald Trump on the evening of Wednesday March 18, 2020.
The Law, however, did not pass as originally written and passed by the House on March 14th. Our article related to the original act can be found here. There are some significant and slight changes in different areas of the Act. The summary of the technical revisions that were made to the now final Act that can be found here, but are outlined below.
These Emergency Acts are effective April 2, 2020 through December 31, 2020.
Emergency Family and Medical Leave Expansion Act
Employers with less than 500 employees must provide paid, job protected to leave to employees impacted by coronavirus based on the below eligibility.
Exemption: Companies with less than 50 employees may be exempt from this act IF the Department of Labor determines that the required leave would “jeopardize the viability of their business”. However, we do not know at this time what is defined as jeopardizing the viability of the business and we do not know how lenient or strict they will be with exemptions. We also don’t know the process to apply for the exemption, but we will keep you updated on that.
Eligible employees: Full time and Part time employees that have been on the job for at least 30 days prior to the first day of leave
Paid leave: The first 10 days can be unpaid and then after that, the employer must 2/3rds of a full-time employees’ compensation based on what the employee would normally be scheduled to work. An employee can use available PTO for the first 10 days, but the employer cannot require it. The pay entitlement limit is $200 per day and a $10,000 per employee for a full-time employee. Part time employees are entitled to pay based on the average number of hours worked in the six-month period prior to the leave.
Coverage: Up to 12 weeks of job protected leave under the Family and Medical Leave Act to be used if an employee is unable to work (remotely as well) due to the care for a child (under the age of 18) if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to coronavirus. Note: This is the ONLY qualifier that applies to the expanded FMLA Act.
Job Restoration: Employers are obligated to restore employees under the Emergency FMLA leave to the same or equivalent position at time of return to work. Companies with less than 25 employees must are generally excluded from the requirement if the position no longer exists due to the economic impact of the emergency, however, the employer must make a good faith effort to return the employees to an equivalent position for up to 1 year after the leave is expired.
Emergency Paid Sick Leave Act
Employers with less than 500 employees must provide 2 weeks (80 hours) of paid sick leave to employees that is out of work as a result of COVID-19.
Eligible employees: Full time and Part time employees regardless of length of employment
Paid sick leave:
If an employee is out for any of the below 3 reasons, the employer must provide the employee with up to 80 hours of paid sick leave time at the employees’ regular rate of pay. There is a daily cap of $511 or up to $5,110 total.
- Subject to a federal, state or location quarantine or isolation order related to COVID-19
- Advised by a health care provider to self- quarantine due to COVID-19 concerns
- Experiencing COVID-19 symptoms and seeking medical diagnosis
If an employee is out for any of the below 3 reasons, the employer must provide the employee with up to 80 hours of paid sick leave time at two-thirds the employees’ regular rate of pay. There is a daily cap of $200 or up to $2,000 total.
- To care for an individual (not just a family member) subject to federal, state or location quarantine or isolation order related to COVID-19 or Advised by a health care provider to self- quarantine due to COVID-19 concerns
- To care for a child whose school has closed, or childcare is unavailable, due to the coronavirus
- 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.
Emergency Unemployment Insurance Stabilization and Access Act
Provides federal funding to states for administrative costs and high unemployment claims, for those states that qualify. Additionally, for states that qualify, it will fund an additional 26 weeks of benefits after the first 26 weeks of benefits has been exhausted, allowing for up to 52 weeks of benefits coverage. This will vary by state. Some states have already adjusted their Unemployment program, and more are expected to follow that lead with this new federal funding.
With the understanding that these requirements can be difficult for a small business, there are tax credits included in the bill for employers that provide paid sick or family medical leave under this act. We recommend that you work with your CPA or Accountant to claim these tax credits should you be in the situation where you pay under the FMLA expansion or the Paid Sick Leave Act. The Small Business Administration also has federal loan program options for financial support to the small businesses impacted by this crisis.
We already offer paid time off and leave, can we use our policy instead? No, The emergency paid leave does not carry over into the next year and may be in addition to any paid sick leave that the companies is currently providing employees. However, you cannot require employees to use their available PTO through the company policy before they use any of the paid sick time under this new law.
Are part time employees eligible? Yes, part time employees that have been employed for 30 days from the date of leave are eligible for the expanded FMLA coverage and part time employees of any length of service are eligible for Paid Sick Leave. Part time employees pay is calculated based on the average number of hours worked in the six-month period prior to the leave. If the part time employee has not been employed for the six months prior, it is based on the average hours they would be scheduled to work for a regular two week period.
Can employees use PTO under our company policy for the first 10 days of unpaid FMLA leave? Yes, if the employee has available paid time off through the company, they can use that time to cover the first 10 days. However, you cannot require them to do so. Additionally, ff requested by the employee, the company is required to utilize the Emergency Paid Sick Leave time under this law for the 10 days of unpaid time under the Emergency FMLA Act.
If we layoff all or some employees due to closure or lack of business, do we have to pay them 2 weeks under the Paid Sick Leave Act? A layoff or furlough is separate from FMLA and Sick Leave Acts. If employees are laid off or have reduced hours, they are eligible to apply for unemployment benefits through their state unemployment office, without charge back to the employer for COVID-19 related unemployment claims.
There are still some unknowns that we are waiting to be released over the next 7 – 15 days when this is effective. If you have questions about this information, please reach out to any member of the Employers Advantage LLC team.