As most people already know, just over a week ago, Congress passed the Families First Coronavirus Response Act (FFCRA or Act). Generally, it requires employers with fewer than 500 employees (“covered employers”) to provide their employees with 1) paid sick leave and/or 2) expanded family and medical leave, for specified reasons related to coronavirus, with 100% reimbursement by the government via a tax credit for leave time paid out.
The United States Department of Labor (“DOL”) is the federal agency charged with enforcing the FFCRA. This week the DOL issued guidance to help explain the key provisions of the Act. Below is some critical information from the DOL Guidance regarding what covered employers must do to comply with the Act:
· Paid Sick Leave for Sick Employee. Covered employers must provide 2 weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay (up to a max of $511/day) for employees unable to work because the employee him or herself is quarantined (pursuant to government order or advice of a health care provider) and/or is experiencing COVID-19 symptoms and seeking a medical diagnosis;
· Paid Sick Leave for Employee to Care for Someone Else. Covered employers must provide 2 weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s regular rate of pay (up to a max of $200/day) because the employee is unable to work in order to care for some other individual subject to quarantine or to care for a child (under 18) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
· Expanded Paid Family Leave for Child Out of School/Childcare. Covered employers must provide up to an additional 10 weeks of paid expanded family and medical leave at 2/3’s the employee’s regular rate of pay (up to a max of $200/day) where an employee, who has been employed for at least 30 calendar days, is unable to work and needs leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
Which employees are eligible for what? All employees are eligible for the 2 weeks paid sick leave. Employees employed for at least 30 days are eligible for up to an additional 10 weeks of the expanded paid family leave to care for kids out of school or child care. For the paid sick leave, full time employees are eligible for up to 80 hours of leave, and part-time employees are eligible for the number of hours of leave that the employee works on average over a 2-week period. Tips must be included in calculating the regular rate of pay applicable for eligible leave time.
What are the notice requirements? The FFCRA also requires that covered employers post in their workplaces this FFCRA notice concerning the leave rights under the Act. According to DOL FAQ’s, covered employers must post the notice in a conspicuous place on its premises. An employer may also satisfy the posting requirement by emailing or direct mailing the notice to employees, or posting it on an employee information internal or external website. The notice need NOT be provided to recently laid off employees, which suggests the DOL’s view that employees who have been laid off are not covered by the FFCRA. The FFCRA notice does have to be provided to new hires.
Is there any exemption? Small businesses with fewer than 50 employees may qualify for an exemption from the expanded FMLA leave requirement to provide leave due to school closing or child care if the leave requirements would jeopardize the viability of the business as a going concern. At this point, the DOL has taken the position that covered employers should not send anything to the DOL electing this exemption. The DOL guidance suggests that for now small business seeking to elect this exemption should document why it meets the criteria set forth in the law. The DOL is expected to publish regulations shortly regarding the Act’s requirements and this exemption.
How will the government reimburse covered employers? Covered employers required to provide this paid leave will be 100% covered by a dollar-for-dollar refundable tax credit available to the employer by the Federal government for the cost of leave and the cost of the employer’s health insurance premiums during the leave. The IRS website explains that the mechanism for the tax credit will involve employers retaining an amount of the payroll taxes equal to the amount of qualifying sick and family leave that they paid, rather than deposit them with the IRS, as more fully described here.
Can employees carry over leave required by the Act? The law takes effect April 1, 2020, and covers leave taken between April 1, 2020 and December 31, 2020. Paid sick leave does NOT carry over from one year to the next, and it does NOT have to be paid out upon termination.