Five Ways the Families First Coronavirus Response Act Impacts Employers
President Trump has signed the Families First Coronavirus Response Act, passed with bipartisan approval by the House and Senate, on March 18, 2020. The Act will become effective on April 2, 2020 (15 days after its enactment) and will expire on December 31, 2020. What does the Families First Coronavirus Response Act mean for employers?
Highlighted here are five ways the Families First Coronavirus Response Act will directly impact businesses immediately, as it provides for certain paid leave for employers with under 500 employees:
Paid Sick Leave
The Act provides for paid sick leave to be paid to employees, regardless of how long they have been employed, for Coronavirus related issues and applies to any private employers with under 500 employees and public agencies with one or more employees.
These employers will be required to provide their full-time employees with 80 hours of paid sick time and its part-time employees with paid sick time in an amount equal to that employee’s average number of hours worked in a two-week period to use if they are unable to work or work remotely 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 an order as described in subparagraph (1) or has been advised as described in paragraph (2).
5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter 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 the Treasury and the Secretary of Labor.
Employees who take leave for any of the first three reasons listed above will be entitled to pay at their regular rate of pay, but not less than minimum wage and not more than $511/day (up to an aggregate of $5,110). For employees taking leave for the last three reasons listed above, they will be entitled to an amount equal to two-thirds of their regular rate of pay, but not less than minimum wage and subject to a cap of $200/day (up to an aggregate of $2,000).
This paid sick leave is in addition to any paid leave the employee is already entitled to under their benefits package with the employer. An employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time under this Act. This paid leave, however, cannot be carried over into the next calendar year. Paid sick time provided to an employee under this Act shall cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for paid sick time.
An employee is required to notify the employer orally or in writing of the need to take paid sick leave, including the expected duration, at least seven days in advance if the need is foreseeable or, otherwise, as soon as practicable. Employers are prohibited from retaliating, discriminating, discharging and disciplining employees while they are using this paid sick leave. The failure to pay the mandated sick leave will be a violation of the Fair Labor Standards Act.
Within seven days of enactment, the Secretary of Labor will publish a model notice that must be posted by employers to inform employees of their rights to this paid sick leave. Not later than 15 days after the date of the enactment of this Act, the Secretary of Labor shall issue guidelines to assist employers in calculating the amount of paid sick time
Emergency Paid Family and Medical Leave
In addition, this Act provides for emergency family and medical leave. Employees who have been employed for at least 30 calendar days and are employed by an employer with less than 500 employees are eligible for this leave if they are unable to work or work remotely due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency. A public health emergency means an emergency with respect to COVID–19 declared by a Federal, State, or local authority.
Under this section of the Act, an employee will be entitled to unpaid leave for the initial 10-day period during which time they can, but are not required to, concurrently use accrued paid time off. Thereafter, the employee is entitled to paid leave for the remainder of the leave period ending on the date that is 12 weeks after the date leave commences.
Employees eligible for leave after the expiration of the initial 10-day period will be entitled to an amount equal to two-thirds of their regular rate of pay for the number of hours that employee would normally be scheduled to work, up to a cap of $200/day (up to an aggregate of $10,000).
As with FMLA leave, when the necessity of leave is foreseeable, the employee must provide notice as is practicable. Likewise, employees must be restored to their position upon their return from leave. However, an employer with fewer than 25 employees is not required to restore the employee to their position if the position held when the employee went on leave no longer exists due to economic conditions or change in operating conditions that affect employment and are caused by the public health emergency during leave. Furthermore, the employer must make reasonable efforts to restore the employee to an equivalent position and if reasonable efforts fail, must make reasonable efforts for a one year period (beginning on the earlier of the date the qualifying need related to public health emergency concludes or date that is 12 weeks after date leave commences) to contact employee when an equivalent position becomes available.
As it relates to the emergency family and medical leave, the Act grants the Secretary of Labor the authority to issue regulations for good cause to exclude (1) certain health care providers and emergency responders from the definition of eligible employee and (2) to exempt small businesses with fewer than 50 employees from the leave requirements when the imposition of such requirement would jeopardize the viability of the business as a going concern.
Payroll Tax Credits
For both the paid sick leave and the emergency family and medical leave, the Act provides for a payroll credit for those employers paying qualified sick leave wages and qualified emergency family and medical leave wages. There are caps on the amount of wages that qualify and those caps are based, in part, on the basis for the leave being used by the employee. These credits are also available to self-employed individuals. Additionally, these wages are not considered wages for purposes of Social Security taxes.
Expanded Unemployment Benefits
The Act also provides grant funding for states to expand unemployment benefits for employees who lose their jobs due to the Coronavirus and to assist with processing and paying unemployment insurance. This includes waiving the work search requirements and waiting week and also noncharging employers directly impacted by Coronavirus due to illness or directives from public health officials to isolate workers.
It should be noted the Pennsylvania Department of Labor already suspended the waiting week as of March 17, 2020.
If you are unsure how this Act translates to your business, please consult with an employment lawyer to ensure your company complies.
Attorney Loren Speziale collaborates with business owners and human resource professionals, providing legal guidance and risk management assistance with regard to personnel issues.