E31: Season 3 Episode 11: The Families First Coronavirus Response Act Becomes Law
On March 18, 2020, the U.S. Senate passed H.R. 6201, the Families First Coronavirus Response Act (“FFCRA” or the “Act”) in a 90-8 vote and President Trump immediately signed the bill into law thereafter. The new law provides free screening and testing, paid leave, and enhanced unemployment benefits to employees affected by the COVID-19, the respiratory disease caused by the coronavirus. These benefits are set to go into effect within 15 days of the Act’s enactment (April 2, 2020) and will expire on December 31, 2020. Prior to the effective date of the Act, the Department of Labor will issue regulations providing further details on the implementation and effect of the Act. Until these regulations are issued, there are some details regarding the implementation of the Act which are unknown. For example, how will short term and long term disability insurance play into the sick leave and FMLA leave provisions? What about workers’ compensation?
The Act incorporates and amends many provisions of the Fair Labor Standards Act and the Family and Medical Leave Act with respect to its emergency paid sick leave and emergency family leaves terms. The FFCRA only applies to employees who have been employed for at least 30 days with private sector employers with fewer than 500 employees. Private businesses with at least 500 employees are not covered by the bill. The law may also exempt small business employers with less than 50 employees when “the imposition of the requirements would jeopardize the viability of the business as a going concern.” However, further guidance on who, if anyone, will be exempt under this provision has not been issued. Certain healthcare providers and emergency responders like hospitals and nursing homes are also exempt from the FFCRA’s requirements.
The Act provides two key benefits to employees: 1) Emergency Family and Medical Leave, and 2) Emergency Sick Leave. The Act also provides a refundable tax credit benefit to eligible employers.
Emergency Family and Medical Leave Expansion
Employers with less than 500 employees must provide up to 12 weeks of partially paid leave under the Family and Medical Leave Act of 1993 to employees who cannot work or telework because they have to care for a minor child if the said child’s school or place of care is closed due to a coronavirus public health emergency. The first 10 days of such leave may be unpaid or the employee can use accrued vacation days as leave. For all subsequent days, the employee will receive a benefit equal to no more than 2/3 of the employee’s normal wages and/or pay rate, capped at $200 per day and $10,000 in the aggregate. Benefits paid under this provision will not be subject to any Social Security payroll tax. Like employees on regular Family and Medical Leave, reinstatement is required in most instances upon the conclusion of the leave period. Importantly, this provision of leave applies to ALL employers with fewer than 500 employees, even if the employer was otherwise not subject to the provisions of the Family and Medical Leave Act.
Emergency Paid Sick Leave
This provision of the Act requires all employers with fewer than 500 employees to provide paid sick leave in the event of a public health emergency, like the current coronavirus crisis. As a result, employers must provide 80 hours of paid sick leave to all full-time employees (leave is pro-rated for part-time employees) if the employee cannot work or telework and is: (i) subject to a coronavirus quarantine or isolation order; (ii) been advised by a health care provider to self-quarantine due to coronavirus concerns; (iii) experiencing symptoms of coronavirus and is seeking a medical diagnosis; (iv) caring for an individual described in (i) or (ii) above; (v) caring for a child whose school or place of care is closed, or the child care provider of the child is unavailable, due to coronavirus precautions; or (vi) is experiencing any other substantially similar condition specified by HHS in consultation with the Treasury and Labor Departments. Paid sick leave time does not carry over to the following year and is only available through December 31, 2020.
Employees taking sick leave for themselves will be paid at no more than their normal pay rate and/or wage. Paid sick leave benefits are capped at $511 per day ($5,110 total) for an employee’s own care and $200 per day ($2,000) when the employee is caring for a family member.
Note that employers cannot require employees to use the existing or accrued sick time prior to utilizing the paid time off provided by the Act’s provisions or terminate, or otherwise discipline any employee who takes paid sick leave under the provisions of the Act. Employers must post a notice for employees containing information about requirements of the Act once the Department of Labor creates a model notice no later than 7 days after the Act has been enacted.
Tax Credit for Employers
Under the FFCRA, employers who are required to provide their employees with emergency family or sick leave will receive a refundable payroll tax credit equal to 100% of the money they spend on the required paid leave.