President Trump signed into law yesterday the Families First Coronavirus Response Act (“FFCRA”), an economic stimulus plan aimed at addressing the impact of the COVID-19 outbreak on Americans and introducing paid sick leave and an expanded Family and Medical Leave Act (FMLA). Smaller businesses will bear the cost of this new law, subject to tax credits discussed below.
This new law was drafted and passed quickly, so it does not address every question that you may have. However, the FFCRA does impose important and substantial new requirements on employers with fewer than 500 employees. Here is a high-level summary of the FFCRA’s requirements:
- The FFCRA requires employers – including small employers not otherwise covered by the Family and Medical Leave Act (“FMLA”) – to provide paid Emergency FMLA Leave to employees who have worked for your business for at least 30 days. Under this provision, an eligible employee may take up to 12 weeks of job-protected leave to allow the employee, who is unable to work or telework, to care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.
- During the period of Emergency FMLA Leave, after 10 days (during which time an employee may choose to use other paid leave under the employer’s policies, including Paid Sick Leave discussed below), an employer must pay full-time employees two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled, up to $200 per day and $10,000 in the aggregate per employee. Special rules apply for part-time employees.
- Employers must restore employees using Emergency Family Medical Leave to their jobs after 12-weeks, although special rules apply for employers with fewer than 25 employees.
- All employees (with certain exceptions for healthcare providers and emergency responders) will be entitled to 80 hours of Paid Sick Leave if they cannot work (or telework) because the employee is: (1) subject to a federal, state or local quarantine or 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 an individual (i.e., not restricted to family members) subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns; (5) caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; 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.
- An employee qualifying for Paid Sick Leave must be paid for 80 hours of paid sick leave at the employee’s regular rate for qualifying reasons 1, 2, or 3 listed above (up to $511 per day and a maximum of $5,110 total Paid Sick Leave) or two-thirds the employee’s regular rate to care for qualifying reasons 4, 5, or 6 listed above (up to $200 per day and a maximum of $2,000 total Paid Sick Leave). Special rules apply for part-time employees or for employee who have worked for the employer for fewer than six months.
- Employers are required to provide employees notice of these new benefits.
Seyferth Blumenthal & Harris LLC has prepared a sample policy for use by employers to aid in compliance with the FFCRA’s requirements, which we will provide to you at no-cost on request. Please contact your SBH attorney if you would like a copy of that policy.
To offset the cost of these Emergency FMLA Leave and Paid Sick Leave mandates, the newly passed laws provide for a series of refundable tax credits equal to 100% of the wages paid to employees by employers who are required to provide the Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave to employees. These tax credits are allowed against the employer portion of Social Security taxes. While this limits application of the tax credit, employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe. You should contact your payroll provider or financial advisor about how to obtain these tax credits for your business.
Finally, under the newly-passed Emergency Unemployment Insurance Stabilization And Access Act Of 2020, employers that lay-off employees as a result of the economic downturn must provide notification to employees of the availability of unemployment compensation at the time of separation.
These are challenging times, and these new laws are subject to change or interpretation by the Department of Labor. We are available, of course, to help guide your business to comply with these new employer mandates.
Please do not hesitate to contact any of SBH’s attorneys if you have any questions.