On March 18, 2020, the President signed the Families First Coronavirus Response Act (“FFCRA”) which expands the existing Family Medical Leave Act and provides additional Emergency Paid Sick Leave due to the Coronavirus health emergency, which is effective April 2, 2020.
Beginning April 2, 2020, the FFCRA will require employers with fewer than 500 employees, (some exceptions apply) to provide all employees who are eligible paid sick leave under the Emergency Paid Sick Leave Act (“EPSLA”) and to provide 12 weeks of protected leave to eligible employees who are unable to work, including telecommuting work, because their child’s school or place of care has been closed or their child care provider is unavailable due to a public health emergency under the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) which expands the existing Family and Medical Leave Act.
Emergency Paid Sick Leave Act(“EPSLA”)
Employers: Applies to all employers who employ fewer than 500 employees. An employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of this subsection. Small businesses that employ fewer than 50 employees may apply for an exemption when the imposition of such requirements would jeopardize the viability of the business as a going concern. Exemptions would be granted by the Secretary of Labor, who will likely communicate those guidelines, and how businesses may request an exemption, prior to the law taking effect on April 2.
Employees Who Qualify: Beginning April 2, all employees are eligible for paid sick leave related to COVID-19 under the EPSLA, regardless of the length of time they have been employed.
Employee Eligibility: An employer shall provide to each employee employed by the employer paid sick time to the extent that 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 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.
Length of Paid Sick Time: An employee shall be entitled to paid sick time for an amount of hours depending on their employment status.
· Full time employees are entitled to 80 hours of sick leave.
· Part time employees are entitled to a number of hours equal to the number of hours that such employee works on average over a 2 week period. (For example, if an administrative assistant works 30 hours per week, they would be entitled to 60 hours of paid sick leave.)
Amount of Paid Sick Time:
· When the sick leave is based on reasons 1-3 above, employers must pay the employee their regular compensation up to a maximum of $511/day and$5,110 in the aggregate.
· When the sick leave is based on reasons 4-6 above, employers must pay the employee their regular compensation up to a maximum of $200/day and$2,000 in the aggregate.
Duration of Eligibility: The sick leave does not carry over to 2021. Employers are also no required to pay any unused leave upon an employee’s separation from employment.
Other Leave: Employees are not required to first use other available paid leave before using paid sick leave under EPSLA. This sick leave is in addition to any paid sick leave, vacation or PTO currently provided by employers.
Tracking: Employers should track the paid sick leave under the EPSLA separately from any other paid sick leave, vacation or PTO because Employers will only receive reimbursement pursuant to the Act up to a certain amount.
Tax Credits:
· Employers will receive 100% reimbursement for paid leave pursuant to the EPSLA. However, they are limited both daily and in the aggregate for each employee.
· Employers will face no payroll tax liability on the additional paid sick leave.
· Under guidance that should be released by the IRS this week,eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
· The payroll taxes that are available for retention include withheld 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.
· If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure should be announced this week.
Posting: Employers must post a notice about leave entitlements in a conspicuous location; the Department of Labor is expected to publish a model notice for posting on or before March 25, 2020.
Emergency Family and Medical Leave Expansion Act (“EFMLEA”)
Employers: Applies to all employers who employ fewer than 500 employees. The new requirement, which expands the Family and Medical Leave Act (“FMLA”), will expire Dec. 31. The 500-employee threshold under the emergency FMLA is a significant change from the current FMLA threshold of 50 or more employees, and the required 12 months and minimum 1,250 aggregate hours of employment under the current law.
An employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of this subsection. Small businesses that employee fewer than 50 employees may apply for an exemption when the imposition of such requirements would jeopardize the viability of the business as a going concern. Exemptions would be granted by the Secretary of Labor, who will likely communicate those guidelines, and how businesses may request an exemption, prior to the law taking effect on April 2.
Employee Eligibility: Employees who have been employed for at least 30 days have the right to take up to 12 weeks of job-protected leave for a qualifying leave related to a “Public Health Emergency,” which means the employee is unable to work (or telework) 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 due to COVID-19.
Length of Leave: The first 10 days for which an employee takes leave under the EFMLEA may consist of unpaid leave, but the employee may choose to substitute any accrued, unused vacation, PTO or paid sick leave benefits for the first 10 days of unpaid leave. The employee would then have 10 weeks under the emergency EFMLEA.
Amount of Paid Leave: The remaining 10 weeks of paid leave must be at least two-thirds of an employee’s regular rate of pay of the last six months and reflect the number of hours an employee would otherwise be normally scheduled to work. The paid leave is capped, however, at $200 per day and $10,000 in the aggregate.
Duration of Eligibility: The EFMLEA expires on December 31, 2020.
Tracking: Employers should track the leave under the EFMLEA separately from any other paid sick leave, vacation or PTO because Employers will only receive reimbursement pursuant to the Act up to a certain amount.
Tax Credits: Employers will receive quarterly tax credits for paid family leave, allowing credits against the employers’ portion of Social Security taxes. Employers are entitled to credit for qualified family leave wages, up to$200 per day for each individual and $10,000 total with respect to all calendar quarters.
Lanak and Hanna is presently helping employers navigate the complex world of COVID-19. If you would like additional information or resources related to the FFCRA, EPSLA and EFMLEA, please contact Natasha K. Buchanan at (714) 620-2350 ext.340 or [email protected].
The information contained herein is not advice and should not be treated as such. You must not rely on the information as an alternative to legal advice from an appropriately qualified attorney.
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