We hope that you and your families are well, and your business is weathering the COVID-19 storm. As part of our goal to help you and your business remain healthy, we want to draw your attention to the Families First Coronavirus Response Act which becomes effective April 2, 2020. To keep you and your employees adequately informed, we advise you to update your company Policy Manual to incorporate the new rules. And, for those that have not yet adopted a formal Policy Manual, now is the time to do so. As always, should you need any assistance, we stand by ready to help.
Families First Coronavirus Response Act
The legislation, titled the Families First Coronavirus Response Act (H.R. 6201) (the "Act"), provides, in part, employers with tax write-offs in return for providing employees with paid time off during the pandemic if necessitated by sickness caused by COVID-19. The text of the Act can be found here.
Emergency Family & Medical Leave Expansion Act
One piece of the Act is the Emergency Family & Medical Leave Expansion Act. This provision of the Act amends Title I of the Family Medical Leave Act of 1993 ("FMLA"), expanding FMLA on a temporary basis, and requires that private employers with fewer than 500 employees (instead of employers with 50 or more employees) provide up to 12 weeks of job-protected public health emergency leave, ten weeks of which must be paid leave, to their employees through December 31, 2020. Another significant change broadens the number of employees who will qualify for such leave by reducing the amount of time the employee had to be employed with the employer prior to becoming eligible for leave. With this new change, any employee employed for 30 or more days is eligible for such paid job-protected leave if they have a qualifying need related to a public health emergency. As written, the only "qualifying need" is if the employee is unable to work (or telework) because he or she is caring for their minor child if the child's school is closed or the child's regular childcare provider is unavailable due to the public health emergency.
The first ten days of leave is unpaid, but an employee may choose to apply any accrued but unused PTO they already have earned during this time. Thereafter, the employer must provide paid leave. Paid leave for full-time employees is calculated using no less than 2/3 of the employee's regular rate of pay. Daily pay cannot exceed $200 per day, and in the aggregate, paid leave under this Section is not to exceed $10,000.00 per employee. Part-time employees are also eligible for paid leave, but it is calculated based on the average number of hours worked during the previous six months before taking leave, or if the employee has not worked during the prior six months, based on the reasonable expectation that the employee had at the time of hire regarding his or her expected hours of work.
The Secretary of Labor is authorized to issue regulations for good cause that exempt businesses with fewer than 50 employees from paid family leave under the Act if providing it would jeopardize the viability of the business as a going concern. At this time, there are no proposed regulations.
Emergency Paid Sick Leave Act
Similarly, for private employers with fewer than 500 employees and public employers of any size, the Act also provides that employees be provided with paid sick leave to the extent an employee is unable to work (or telework) due to:
- being subject to a federal, state, or local quarantine order related to COVID-19;
- having been advised by a health care provider to self-quarantine;
- experiencing symptoms of COVID-19 and is seeking a diagnosis;
- caring for an individual that is subject to an order for quarantine; or
- caring for the employee's son or daughter because the child's school is closed and/or their regular caregiver is unavailable.
Until December 31, 2020, all full-time employees (regardless of the length of employment) are entitled to 80 hours of paid sick time. Part-time employees are entitled to paid sick leave in a number of hours equal to the number of hours that such part-time employee works on average every two weeks. Paid sick leave wages are capped at $511.00 per day up to a total of $5,110.00 per employee for their own use. If, instead, the employee's absence is necessitated by caring for others, the cap is $200.00 per day, up to $2,000.00 total. Such paid time off is immediately accessible, but cannot be carried over to the next calendar year.
It should be noted that the employer of an employee who is a healthcare provider or an emergency responder may elect to exclude such employee from application of this section of the Act.
The Secretary of Labor is authorized to issue regulations for good cause that exempt businesses with fewer than 50 employees from paid sick leave under the Act if providing it would jeopardize the viability of the business as a going concern. At this time, there are no proposed regulations.
Emergency Unemployment Insurance Stabilization and Access Act of 2020
Another Section of the Act, the Emergency Unemployment Insurance Stabilization and Access Act of 2020, makes changes to the unemployment benefit process to benefit employees. The Act provides emergency funding to states for increasing access to unemployment benefits, including the following changes:
- Individuals may apply for unemployment benefits online or via telephone;
- There is no longer a one-week waiting period;
- Employees do not have to be actively searching for other employment to receive unemployment benefits;
- Employers impacted by COVID-19 will not be responsible for benefits paid resulting from these changes.
Tax Credits for Paid Sick and Paid Family and Medical Leave
Presumably, to help offset the expense of these sweeping changes, which are being placed on smaller employers (i.e., those employing less than 500 employees), the Act also expands tax credits available to employers who are required to provide Emergency Paid FMLA leave, and Emergency Paid Sick Leave under the Act. Employers who are required to provide paid leave under the Act will receive a credit against their quarterly payroll taxes, in an amount equal to 100% of the paid FMLA leave and paid sick leave wages paid by the employer.
Please call us at (757) 687-8888 if you have any questions or concerns, and above all, be safe.