The Families First Coronavirus Response Act (FFCRA), which will go into effect on April 1, 2020, provides Coronavirus-related emergency paid sick leave and emergency family and medical care leave to eligible employees. Earlier this week, the U.S. Department of Labor (DOL) published a “Questions and Answers” to address some preliminary questions related to the new FFCRA. Earlier today, the DOL published a workplace poster which covered employers must distribute to current employees. The posting requirement may be met by emailing or direct mailing this notice to employees, posting the notice on an internal or external website, or by physically posting the notice in a conspicuous place on the premises.
The new leave obligations apply to all private employers with fewer than 500 employees (including full-time, part-time, and temporary employees), subject to possible exemptions, as noted below. The paid sick leave obligations also apply to other identified employers, including certain public entities and executive agencies. Under the new law, U.S. employees may be eligible to take emergency paid Coronavirus-related leave for illness, caregiving, and childcare purposes, and employers may be eligible to receive reimbursement for the cost of providing this paid leave to their employees. The following is a summary of certain aspects of the FFCRA. If you have any questions or would like to discuss specifics as it relates to your company, please reach out to our OGC team directly.
Emergency Paid Sick Leave
Amount of Leave. Eligible employees of covered employers can take up to 80 hours of paid sick leave for COVID-19 purposes if they are unable to work or telework. Emergency Paid Sick Leave may be substituted for, and run concurrently with, the first two weeks of unpaid Emergency Family and Medical Leave.
Eligibility. Full-time employees, regardless of how long they have been employed. Part-time employees are eligible for a pro-rated amount of paid sick leave based on the average number of hours the employee works during a two-week period.
Purpose of Leave. Leave can be taken if the employee is:
1. subject to a federal, state or local quarantine/isolation order related to COVID-19;
2. advised by a health care provider to self-quarantine due to COVID-19 concerns;
3. experiencing COVID-19 symptoms and seeking medical diagnosis;
4. caring for someone who: (i) is subject to a federal, state or local quarantine/isolation order related to COVID-19; or (ii) has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
5. caring for the employee’s child if the school or place of care of the child has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID–19 precautions; or
6. 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.
Amount of Pay.
- For uses (1) – (3) above, full-time employees must be paid at 100% of pay up to a maximum of $511 per day (and $5,110 in the aggregate). Part-time employees should be paid based on the average number of hours the employee worked for the six months prior to taking sick leave.
- For uses (4) – (6) above, employees must be paid at two-thirds their regular rate of pay up to $200 per day (and $2,000 in the aggregate).
Reimbursement. U.S. companies with fewer than 500 employees and tax-exempt organizations may obtain 100% reimbursement in the form of payroll tax offsets for the amounts they pay towards paid leave and as outlined further below.
Exemptions. Employers of healthcare providers or emergency responders may choose to exempt their employees from leave. The basis for the exemption must be documented in accordance with criteria that will be detailed in forthcoming regulations.
Precedence. An employer may not require an employee to use other paid leave before the employee uses Emergency Paid Sick Leave.
No Carryover. Emergency Paid Sick Leave will not carry over from one year to the next.
Emergency Family and Medical Leave
Amount of Leave. Under a temporary expansion of the FMLA, eligible employees who are unable to work or telework can take up to 12 weeks of job-protected leave.
Eligibility. vThe private employer must have fewer than 500 employees. The employee also must have been employed for at least 30 calendar days prior to leave.
Purpose of Leave. Leave may be taken to care for the employee’s child (under 18 years) if the following events have occurred due to the COVID-19 public health emergency:
- a school closing; or
- the unavailability of childcare providers or the child’s place of care.
Paid and Unpaid Portions of Leave.
- The first 2 weeks (10 days) of emergency FMLA may be unpaid unless the employee takes Emergency Paid Sick Leave during this time, or otherwise elects to use available vacation, personal, or sick leave under the employer’s existing policies.
- After the first 2 weeks (10 days), the employer must pay full-time employees at least two-thirds the employee’s regular rate of pay up to $200 per day (and $10,000 in the aggregate or $12,000 in the aggregate if the employee also took Emergency Paid Sick Leave for the first two weeks of leave).
- U.S. companies with fewer than 500 employees and tax-exempt organizations may obtain 100% reimbursement in the form of payroll tax offsets for the amounts they pay towards paid leave and as outlined further below.
- An additional tax credit may be claimed based on costs to maintain health insurance coverage during the leave period.
- U.S. companies with fewer than 50 employees are eligible for an exemption if the requirements would jeopardize the ability of the business to continue as a going concern.
- Employers of certain health care professionals and emergency responders may elect to exclude such employees.
- Employers with 25 or more employees must reinstate the employee to the same or similar position upon their return to work.
- Employers with fewer than 25 employees are excluded from the reinstatement obligation if the position held no longer exists due to economic conditions or other operating conditions affecting employment which are caused by a public health emergency during the period of leave. This exclusion is subject to the employer making reasonable attempts to return the employee to an equivalent position and requires an employer to make efforts to return the employee to work for up to a year following the employee’s leave.
How to Claim Tax Credit Reimbursement
- Employees may obtain a dollar-for-dollar reimbursement in the form of a tax credit. This is achieved by offsetting an employee’s quarterly payroll taxes by the amount of qualifying leave that the employee paid, rather than paying those taxes to the IRS.
- The eligible payroll taxes that may be retained by the employer are federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
- Employers may also claim amounts paid by the employer to provide and maintain a group health plan.
- If the payroll offset does not cover all paid leave, employers may file a request for an accelerated payment from the IRS. The IRS expects to process those payments in two weeks or less.
- The DOL will observe a temporary period of non-enforcement for the first 30 days after the law takes effect where an employer has acted reasonably and in good faith to comply with the FFCRA.
- No employee may be discharged, disciplined, or discriminated against for taking leave under the FFCRA or filing a complaint related to the FFCRA.
- Additional regulations implementing the new law are expected to be issued sometime in April.
- The new law will remain in effect until December 31, 2020.
If you have questions about how to manage leave during the Coronavirus pandemic, please contact a member of our employment law team:
Jacqueline Piscitello at firstname.lastname@example.org or (781) 799-7090
Patricia Lantzy at email@example.com or (804) 683-1737
Gina Wodarski at firstname.lastname@example.org or (617) 981-0593
Christy Kotowski at email@example.com or (510) 748-0930
Please stay well and take care of yourselves, your workers, and your families during these trying times.