The Families First Coronavirus Response Act (“FFCRA”), signed into law on March 18, 2020, provides protections and relief for employees in response to the spread of COVID-19 and the efforts to stop its spread through quarantines, shelter-in-place orders, and school and work closures. The FFRCA will be in effect from April 2, 2020 through December 31, 2020.
The FFRCA provides for expanded and paid leave through two primary vehicles: 1) the Emergency Family and Medical Leave Expansion Act which provides for up to 12 weeks of family leave 10 of which is paid; and 2) the Emergency Paid Sick Leave Act which provides for two (2) weeks of paid sick leave. Both are explained below.
The FFRCA applies to employers with less than 500 employees. However, employers with less than 50 employees may qualify for an exemption to the FFCRA if the leave requirements would jeopardize the viability of the business. The DOL will address how employers can meet this exemption in its forthcoming regulations. Thus far, the DOL’s guidance indicates that a small business may claim this exemption if an authorized officer of the business determines that:
1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
Employers are required to post a notice regarding the requirements of the FFCRA in a conspicuous location at the employer’s premises or provide the notice by email, direct mail or by posting it on an employee internal or external website. The DOL issued model notice for this purpose, a copy of which may be found at https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf and https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Federal.pdf.
Employers will be entitled to quarterly payroll tax credits for leave wages paid pursuant to the FFCRA.
Tax credits available for public health emergency leave wages is 100% of such leave wages paid under the Emergency FMLA Expansion Act – or no more than $200 per day or $10,000 total per employee.
Tax credits available for paid sick time under the Emergency Paid Leave Act is 100% of the sick leave wages paid or no more than $200 or $511 per employee per day (as applicable depending on the reasons provided above) for ten (10) days. Tax credits also apply to the amounts paid or incurred to maintain health insurance coverage.
Employers who take tax credits for leave under the FFCRA cannot also receive tax credits available to employers for paid FMLA leave as provided for in IRS Code Section 45S.
In order to immediately take advantage of the tax credits provided for under the Act, the IRS recommends that employers retain and access funds they would otherwise pay to the IRS in payroll taxes. However, should such amounts be insufficient to cover the paid leave costs, the employer will be able to obtain an expedited advance from the IRS by submitting a claim form that will be released this week.
Employers may not terminate, discipline, or otherwise discriminate against any employee who takes expanded FMLA under the FFCRA or files a complaint or proceeding under or related to the FFCRA.
Penalties and Enforcement
Employers in violation of the provisions of the Emergency Family and Medical Leave Expansion Act are subject to the FMLA’s enforcement provisions.
Employers in violation of the two (2) weeks of paid sick time or unlawful termination prohibitions under the FFCRA will be subject to penalties and enforcement of the Fair Labor Standards Act, 29 U.S.C. 216; 217.
There will be a “temporary period non-enforcement” for 30 days after the Act goes into effect as long as the employer “has acted reasonably and in good faith” to comply with the law. “Good faith” compliance exists when “violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the Department receives a written communication from the employer to comply with the Act in the future.”
I. Emergency Family and Medical Leave Expansion Act
The Family and Medical Leave Expansion Act amends the Family and Medical Leave Act of 1993 (“FMLA”) to allow eligible employees to take leave for a “qualifying need related to a public health emergency” if the employee is “unable to work (or telework) due to a need for leave to care for a son or daughter under 18 years of age” due to school or child care closures because of “an emergency with respect to COVID-19 by a Federal, State or local authority.”
Eligible employees are those who have been employed with the employer for at least 30 calendar days.
The first ten (10) days of the public health emergency leave will be unpaid and the employee may elect to use accrued vacation leave, personal leave, or medical or sick leave, if available, during this time.
The remainder of the leave – up to an additional ten (10) weeks – will be paid leave. The employer is required to pay two-thirds of the employee’s regular rate of pay based on the hours the employee would normally be scheduled to work – but no more than $200 per day or $10,000 total. If the employee has a varying schedule, the employer should calculate the hours based on the average number of hours the employee was scheduled per day in the six (6) months prior to the leave or, if the employee did not work for the employer for the previous six (6) months, the employee’s reasonable expectation at the time of hiring as to the average number of hours the employee would normally be scheduled to work per day.
After the first two weeks of leave, the employee may elect to or the employer may require the employee to take accrued leave available under the employer’s policies, such as vacation or personal leave or paid time off concurrently with the expanded family and medical leave under the EFMLA.
Job protection under the FMLA applies to the new public health emergency leave with a caveat. Employees of employers with less than 25 employees will not be required to return an employee to his/her job or equivalent job if all of the following are conditions are met:
1) The employee takes public health emergency leave.
2) The employee’s position no longer exists due to economic conditions or other changes to the employer’s operating conditions that affect employment and are caused by a public health emergency during the period of leave.
3) The employer makes reasonable efforts to restore the employee to his/her job or to an equivalent job with equivalent employment benefits, pay and other employment terms and conditions.
4) If the employer is unable to restore the employee to his/her job after “reasonable efforts” described in above, the employer contacts the employee if an equivalent position becomes available during the “contact period” which is defined as one (1) year from the date when the public health emergency leave ends or one (1) year and 12 weeks after the employee’s public health emergency leave began – whichever is earlier.
II. Emergency Paid Sick Leave Act
The Emergency Paid Sick Leave Act requires employers to provide all employees, including part-time and temporary employees with paid sick time for immediate use if the employee is unable to work (or telework) due to a need for leave because:
1) The employee is subject to a Federal, State or local quarantine or isolation order related to COVID-19.
2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
4) The employee is caring for an individual who is subject to a Federal, State or local quarantine or isolation order related to COVID-19.
5) The employee is caring for a son or daughter because of the closure of a school or childcare provider (or childcare is unavailable) due to COVID-19 precautions.
6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.
All employees are eligible for sick leave regardless of how long they have been employed.
Full-time employees are entitled to up to 80 hours of paid sick leave, whereas part-time employees are entitled to the number of hours of paid leave that the employee works on average over a two (2) week period.
Employees may use accrued paid sick time provided by the employer first before using paid sick time provided for under this part of the Act but an employer may not require the employee to do so.
Employees are entitled to earn up to $511 per day – or a maximum of $5,110 for the ten (10) days of paid sick leave if the qualifying events relate to 1), 2), and 3) above.
Employees are entitled to pay at 2/3 their regular rate, which must be at or above the applicable Federal or state minimum wage, but only up to $200 per day – or a total of $2,000 for their ten (10) days of paid sick leave for qualifying events related to 4), 5), or 6) above.
Paid sick time provided for under the Act does not carryover from one year to the next. Moreover, employees are not entitled to reimbursement for unused leave upon termination, resignation, retirement or separation from employment.