Monday, March 23, 2020
Last week, President Trump signed the Families First Coronavirus Response Act (FFCRA), an emergency relief package designed to assist employers and employees in the wake of the 2019 coronavirus pandemic (COVID-19).
The effective dates of the FFCRA are April 2, 2020 through December 31, 2020. It is unclear whether employees who are terminated before April 2
have any rights under it. There are two main sections of the act, expansion of FMLA and paid sick leave, both include provisions for full-time and part-time employees.
To help employers offset the cost, refundable payroll tax credits are available to immediately and fully reimburse, dollar-for-dollar, the cost of providing Coronavirus-related payments.
Job-Protected Leave Under the Emergency Family and Medical Leave Expansion Act (EFMLA)
This law temporarily expands the Family and Medical Leave Act (FMLA) to eligible employees for “a qualifying need related to a public health emergency.” Previously, employees were authorized to take up to 12 weeks of job-protected leave under FMLA but the leave was unpaid. This emergency expansion of the law requires that the first 10 days (2 weeks) are unpaid, however employees may use accrued paid time off. The next 10 weeks are paid not less than two-thirds of an employees regular rate of pay up to $200 per day or $10,000 in the aggregate.
For employees to be eligible for this paid leave under EFMLA, an employee must:
- Work for an employer that has fewer than 500 employees,
- Be employed for 30 calendar days, and
- Be unable to work (or telework) due to a need to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency.
All FMLA provisions apply to EFMLA, therefore employers would continue to count employees under traditional FMLA provisions.
EFMLA is an expansion, not replacement of FMLA. Therefore, employers must adhere to all provisions of FMLA. This includes job-protection by providing the same or equivalent position to the employee upon return to work after FMLA leave is completed. There is an available exception to employers with less than 25 employees if the employee’s position no longer exists following leave due to operational changes triggered by a public health emergency, subject to certain conditions.
For certain businesses, this law contains a potential exception to the expansion of FMLA. The Secretary of Labor has authority to issue regulations exempting: (1) certain health care providers and emergency responders from taking leave under the bill; and (2) small businesses with fewer than 50 employees from the requirements of the bill if it would jeopardize the viability of the business.
Employers with less than 50 employees may apply for a waiver exempting them from this payment. These payments are subject to future tax credits.
Emergency Paid Sick Leave
The Emergency Paid Sick Leave Act (PSLA) under FFCRA applies to employers with less than 500 employees and public employers. Employees are immediately eligible for this leave (there is no 30 calendar day on payroll requirement). These employers are required to provide full-time employees with 2 weeks of paid sick leave capped at 80 hours. The sick leave is permitted when an employee is unable to work (or telework) for the following reasons relating to the coronavirus:
- The employee is subject to a Federal, State, or local quarantine or isolation order.
- The employee has been advised by a health care provider to self-quarantine.
- The employee is experiencing symptoms.
- The employee is caring for an individual or child who is subject to an order to quarantine or isolate, or advised by a healthcare provider to self-quarantine;
- The employee is caring for a child of a quarantined, isolated, or self-quarantined person when the child’s school or place of care has been closed, or the child care provider is unavailable, due to COVID-19 precautions;
- 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.
The sick leave is required to be paid at the regular rate of pay for the employee with one exception. If the employee uses sick leave to care for a family member or child due to the coronavirus, then the employer is only required to pay the employee two-thirds the employee’s rate of pay.
Importantly, this law also applies to part-time workers. Employers are required to provide paid leave to a part-time employee. The part-time employee is entitled to paid leave based upon the number of hours worked on average, over a two-week period.
The emergency paid sick leave must be provided
to any leave already provided. Employers cannot change any employee paid leave policies, nor can they require the employee to take other paid leave options before using this new two week paid leave benefit.
Total payments are capped at $511 per day to an employee.
Exemption from Requirements
Employers with fewer than 50 employees are eligible for an exemption from the requirements if those requirements would jeopardize the viability of the business.
Employers who are health care providers or emergency responders may elect to exclude their employees from the public health emergency leave provisions of the bill.
Employer Tax Credits for Paid FMLA and Sick Leave
Employers receive 100% reimbursement for paid leave as an immediate dollar-for-dollar offset against payroll taxes, which will be reported on Form 941. Health insurance costs are also included in the credit. Where a refund is owed, the IRS will send the refund as quickly as possible.
FlexChecks Working on Setup Changes
FlexChecks is working to make changes to our systems to accommodate the setup that will be required to track and pay EFMLA and Sick Leave. New paytypes will need to be added to each client’s setup. More information will be provided as it becomes available.
This article relies heavily on information released on the US Department of Labor's website, and directly references the articles below: