On March 18, 2020, Congress approved the Families First Coronavirus Response Act (“FFCRA” or the “Act”), an emergency relief bill providing financial support to those impacted by the COVID-19 pandemic.
It is anticipated the new law will take effect within 15 days, or on April 2.
The FFCRA contains a number of provisions related to leave from employment, COVID-19 testing, unemployment benefits, and nutrition and food assistance programs. This summary focuses on key provisions related to paid sick leave, expanded family and medical leave, and associated tax credits for employers.
Emergency Paid Sick Leave
The emergency paid sick leave provisions of the FFCRA require that private employers with fewer than 500 employees provide paid emergency sick leave to eligible employees who need leave for the following reasons:
- The employee is experiencing symptoms of COVID-19;
- A healthcare provider has ordered the employee to self-quarantine;
- A quarantine or isolation order has been issued by federal, state, or local authorities;
- The employee is caring for a family member subject to a quarantine or isolation order;
- The employee is caring for a minor child whose school or childcare provider is closed.
All employees are eligible for emergency paid sick leave, regardless of how long they have worked for an employer. Full-time employees are eligible for two weeks, or 80 hours, of paid leave. Part-time employees are eligible for paid leave equivalent to the number of hours they work on average over a two-week period. Emergency paid sick leave must be made available in addition to any existing paid time off policies, and employers cannot require that employees use accrued paid time off prior to utilizing emergency paid sick leave.
For employees using emergency paid sick leave for their own illness or quarantine order, the employee must receive their regular rate of pay, capped at $511 per day and no more than $5,110 over a two-week period of leave. If the employee takes leave to care for a quarantined family member or minor child whose school or childcare provider has been closed, the employee must receive two-thirds their regular rate of pay, capped at $200 per day and no more than $2,000 over the two-week leave period. If two-thirds the employee’s regular rate would bring the employee’s pay below the local minimum wage rate, the employer must at least pay the employee minimum wage.
The U.S. Department of Labor (“DOL”) will be issuing guidelines on the scope of a hardship exemption for businesses with fewer than 50 employees. Additionally, employers of health care providers and emergency responders may elect to exclude these employees from emergency paid sick leave. The term “health care providers” is expansively defined as including doctors, physician assistants, nurse practitioners, nurse-midwives, and dentists, among others, but the definition does not include registered nurses or nursing assistants at this time. The DOL is tasked with issuing further regulations on the scope of the exemption for health care providers and emergency responders.
Expanded Family and Medical Leave
The FFCRA also extends expanded FMLA protections to employees who have worked for their employer for at least 30 days, and are unable to work or telework in order to care for a minor child whose school or childcare provider is closed due to COVID-19. As with emergency paid sick leave, these expanded FMLA protections must be provided by employers with fewer than 500 employees.
The expanded FMLA protections extend up to 12 weeks of leave to eligible employees, with the first two weeks of this leave period incorporating the two weeks of emergency paid sick leave outlined above. During these first two weeks, employees may also elect instead to use their accrued paid time off. After the first two weeks of emergency paid sick leave, employers must continue to pay eligible employees two-thirds their regular pay, capped at $200 per day and no more than $10,000 in the aggregate. Again, employees may not earn less than minimum wage.
Like with emergency paid sick leave, regulations are forthcoming on how smaller businesses with less than 50 employees may apply for a hardship exemption from the DOL. Additionally, while employers with less than 50 employees are not immune from all liability for violating the expanded FMLA protections, the FFCRA protects small businesses from civil suit by their employees. Moreover, employers of healthcare providers and emergency responders may elect to exclude such employees from these expanded FMLA protections. The scope of this exclusion is discussed more fully above with respect to emergency paid sick leave, and we anticipate the DOL will be issuing further regulations on this topic.
Generally speaking, when taking FMLA leave for any qualified reason, employers are required to restore employees to the same position held prior to taking leave. This job restoration requirement also extends to employees taking leave under the FFCRA’s expanded FMLA protections, except that employers with less than 25 employees are not required to restore employees if: (i) the position held by the employee no longer exists due to economic conditions or other changes in operating conditions caused by a public health emergency; (ii) the employer makes reasonable efforts to restore the employee to a position equivalent to that previously held by the employee; and (iii) if these reasonable efforts fail, the employer makes reasonable efforts over the course of one year to contact the employee if an equivalent position becomes available.
Both emergency paid sick leave and expanded FMLA protections are considered to be protected leave, and employers may not interfere with employees’ rights to use these benefits or retaliate against employees who exercise their rights. Employers should also remain mindful that in addition to these benefits, employees may be eligible to take paid leave under their employer’s internal policies or pursuant to a state’s paid sick leave law, under a short-term or long-term disability insurance plan, or the employee may be eligible to take additional unpaid FMLA leave to attend to their own serious health condition or to care for an ill family member.
Tax Credits for Paid Leave
The FFCRA further provides that employers may recapture benefits paid towards emergency paid sick leave or expanded FMLA protections through a refundable tax credit, applied against the employer’s Federal Insurance Contribution Act (or “FICA”) taxes. The extent of these credits aligns with the amounts to be paid eligible employees. In other words, for those employees eligible to receive emergency paid sick leave benefits up to $511 per day, the employer may claim a credit up to $511 per employee per day, and for those employees eligible to receive emergency paid sick leave or expanded FMLA benefits up to $200 per day, the employer may claim a credit up to $200 per employee per day. These credits can be claimed by employers each quarter.