Media | March 23, 2020

Client ALERT: Family First Coronavirus Response Act Summary


The Families First Coronavirus Response Act was signed by President Trump on March 18, 2020. Link to the full text is located here

The current Family and Medical Leave Act provides eligible employees with up to 12 weeks of unpaid leave per year, requires group health benefits to be maintained for the employee, and entitles the employee to return to their same or equivalent job at the end of their leave. This legislation introduces new paid sick leave and expands the existing Family Medical Leave Act.

Key provisions are below:

Division C – Emergency Family and Medical Leave Expansion Act (“EFMLA):
• Effective date of April 2, 2020, which is 15 days after enactment and ends on December 31, 2020.
• Defines the employer threshold to those with fewer than 500 employees and eligible employee as one who has worked for at least 30 calendar days.
• Defines qualifying need related to a public health emergency, with respect to leave, to mean the employee is unable to work (or telework) due to:
– a need to care for his or her son or daughter under 18 if the school or place of care has been closed or the childcare provider is unavailable due to a public health emergency (COVID-19)
– This is the ONLY “qualifying need” to be eligible for Emergency FMLA
• The Secretary of Labor is allowed to issue regulations that exempt small businesses with fewer than 50 employees from the paid leave requirements when “the imposition of such requirements would jeopardize the viability of the business as a going concern”.
• Provides that the initial ten days of emergency FMLA leave may be unpaid.
• Leave after the initial ten-day period should be calculated at not less than two-thirds of an employee’s regular rate of pay at the hours the employee would normally be scheduled to work. Amount paid for emergency FMLA leave shall not exceed $200 per day or $10,000 in the aggregate.
• The restoration requirement (ability to return to the same or similar job) shall not apply to an employer with fewer than 25 employees if certain circumstances are met.
• Excludes health care providers or emergency responders from the emergency leave requirements.
Final takeaway – “regular” FMLA continues to apply to all employers with more than 50 employees. The “Emergency” FMLA provisions described above only apply to employers with fewer than 500 employees. Employers with 500 or more employees are not subject to the “Emergency” FMLA rules.

Division E – Emergency Paid Sick Leave Act (“EPSLA):
• Effective date of April 2, 2020, which is 15 days after enactment and ends on December 31, 2020.
• Defines a covered employer as any person engaged in commerce or in an industry or activity affecting commerce that, in the case of a private entity or individual, employs fewer than 500 employees and in the case of a public agency or any other entity that is not a private entity or individual, employs one or more employees.
• Requires paid sick time when an employee is unable to work (or telework) due to a need for leave because of the following “qualifying reasons”:
– (1) the employee is subject to a federal, state or local quarantine or isolation order related to COVID-19,
– (2) the employee has been advised by a health care provider to quarantine due to concerns related to COVID-19,
– (3) the employee is experiencing symptoms of COVID-19 and seeking a diagnosis,
– (4) the employee is caring for an individual who is subject to a quarantine order or has been advised to quarantine as outlined above,
– (5) the employee is caring for a son or daughter if the school or place of care has closed or is unavailable due to COVID-19, or
– (6) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor.
• Allows employers of health care providers or an emergency responder to elect to exclude such employees from application of this section.
• Provides that full-time employees are entitled to 80 hours of paid sick leave and part-time employees are entitled to a number of hours that equal the number of hours the employee works on average over a two-week period.
• Paid sick time shall not exceed $511/day or $5,110 in the aggregate for qualifying reasons (1), (2), or (3) noted above or $200 per day and $2,000 in the aggregate for qualifying reasons (4), (5), or (6).
• No carry over of sick time available from one year to the next.
• Provides that the paid sick time shall cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for paid sick time.
• Provides that sick time shall be available for immediate use regardless of how long the employee has been employed.
• Prohibits an employer from requiring an employee to use other paid leave provided by the employer before the employee uses the paid sick time under this Act.
• Requires posting a notice, prepared or approved by the Secretary of Labor, in conspicuous places on the premises where notices are customarily placed. The Secretary of Labor must make a model notice available no later than seven days after enactment of the Act.
• Makes it unlawful to discharge, discipline, or in any manner discriminate against an employee for taking the sick leave or filing a complaint, instituting suit, or testifying in a proceeding under or related to the Act, and a              violation of the Act is considered a failure to pay minimum wages in violation of the FLSA.
Coordination of provisions – An otherwise eligible employee should be able to take EPSLA for the first 10 day waiting period before claiming EFMLA. Therefore providing for zero days of unpaid leave for the employee.

Division G – Tax Credits For Paid Sick and Paid Family and Medical Leave:
• In the case of an employer, there shall be allowed as a credit against the employment tax for each calendar quarter an amount equal to 100 percent of the “qualified sick leave wages” paid by such employer with respect to            such calendar quarter.
• The credit is only allowed against the employer 6.2% social security matching portion.
• Any excess credit is refundable.
• The amount of “qualified sick leave wages” taken into account under subsection (a) with respect to any individual shall not exceed $200 ($511 in the case of any day any portion of which is paid sick time for qualifying reasons (1), (2), or (3) above for any day (or portion thereof) for which the individual is paid qualified sick leave wages.
• Maximum of 10 days wages per quarter (reduced by the amount of days taken into account in all previous quarters) will be taken into account.
• Credit also available for “qualified family leave wages” up to $200 per day, $10,000 aggregate.
• Any wages claimed under this provision cannot also be claimed for purposes of calculating the Sec. 45S – Employer credit for paid family and medical leave.
• The amount of the credit allowed under subsection (a) shall be increased by so much of the employer’s qualified health plan expenses as are properly allocable to the qualified family leave wages for which such credit is so allowed
• Credit is available to self-employed persons.
• Wages required to be paid by reason of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act shall not be considered wages for purposes of section 3111(a) (6.2% “social security portion” of employment tax).
• Wages required to be paid by reason of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act shall be considered wages for purposes of section 3111(b) (1.45% “medicare portion”      of employment tax). However, an offsetting payroll tax credit is available.

We will continue to update our clients through email blasts, website posts, and social media as additional information becomes available.

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