Federal Emergency Paid Sick Leave and Expanded FMLA Protections
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.
This law will go into effect on April 1, 2020 and remain in effect until the end of 2020.
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 an individual 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 of paid leave, capped at 80 hours total. 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 individual 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.
To qualify for the Emergency Sick Leave, an employee must provide his/her employer with documentation in support of the reasons for the paid sick leave outlined above, including the employee’s name, qualifying reason for requesting leave, statement that the employee is unable to work, including telework, for that reason, and the date(s) for which leave is requested. These documents may include a copy of the Federal, State, or local quarantine or isolation order related to COVID-19 or written documentation by a health care provider advising you to self-quarantine due to concerns related to COVID-19.
Employers with fewer than 50 employees who believe they meet the hardship exemption from this Act are instructed to document the reason why the business meets the hardship exemption criteria set forth by the U.S. Department of Labor (“DOL”), but should not send these materials to the DOL at this time. More information about this exemption is expected from the DOL. 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 elect to instead 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. Unless an employee is teleworking, once an employee begins taking paid sick leave for a qualifying reasons, s/he must continue to take paid sick leave each day until s/he either uses the full amount of paid sick leave or no longer has a qualifying reason for taking paid sick leave.
An employee working from home or teleworking, may take FFCRA leave intermittently, if the employer agrees. The intermittent leave may be taken in as small of increments as the employer approves. The DOL has encouraged employers to be flexible with employees during this time, suggesting a permissible use of intermittent leave would be for the employee to work on Tuesdays and Thursdays and use the paid extended FMLA leave to provide child care to a child whose school is closed due to COVID-19. An employee still working at the worksite may not take intermittent leave if the leave is due to a required quarantine, COVID-19 symptoms, or taking care of someone in isolating or experiencing COVID-19 symptoms.
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. However, if an employer decides it has to lay off, reduce hours, or shut down due to COVD-19, the employer may do so, even if the action affects an employee on either type of leave under the FFCRA. If a company closes while an employee is out on a paid leave, the paid leave stops. The employer must provide the paid leave benefit until the time of closing. After the business has closed, the employee will be eligible for unemployment insurance. 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.
To qualify for this leave, an employee must provide to his/her employer documentation in support of the expanded FMLA leave to care for his/her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19-related reasons. This requirement may be satisfied with a notice of closure or unavailability from the child’s school, place of care, or child care provider, including a notice that may have been posted on a government, school, or day care website, published in a newspaper, or emailed from an employee or official of the school, place of care, or child care provider. The employer must retain this notice or documentation in support of expanded family and medical leave, including while the employee may be taking unpaid leave that runs concurrently with paid sick leave if taken for the same reason.
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. At this time, employers should document the reasons why they believe they meet the hardship exemption. 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.
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.
The IRS has provided the following examples of how businesses can take advantage of these credits:
- If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
- If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
If an employer intends to claim a tax credit under the FFCRA for payment of sick leave wages under the FFCRA, it should retain all of the required documentation from the employee in its records. Employers should consult Internal Revenue Service (IRS) applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit, including any needed substantiation to be retained to support the credit.
The U.S. DOL is continuously issuing further guidance on the implementation of the FFCRA. For the most up to date information please refer to https://www.dol.gov/agencies/whd/pandemic/ffcra-questions.