New emergency federal legislation, signed into law March 18, 2020, the Families First Coronavirus Response Act (“FFCRA”) should be noted by employers, particularly those with fewer than 500 employees. The FFCRA, which takes effect April 1, includes emergency leave protections that may have particular impact on smaller employers.
Which employees are covered by the FFCRA?
An employee is covered by the sick leave provisions of the FFCRA if they:
- Have been ordered by the government (state, federal, or local) to quarantine or isolate because of COVID-19.
- Have been advised by a health care provider to self-quarantine because of COVID-19.
- Have symptoms of COVID-19 and are seeking a medical diagnosis.
- Are caring for someone who is subject to a government quarantine or an isolation order or has been advised by a health care provider to quarantine or self-isolate.
- Need to care for a son or daughter whose school or childcare service is closed due to COVID-19 precautions.
- Are experiencing substantially similar conditions as specified by the secretary of health and human services, in consultation with the secretaries of labor and treasury.
NOTE: There is no waiting period for employee eligibility. Paid-sick-leave benefits will be immediately available when the law takes effect on April 1st, regardless of how long an employee has been employed.
Does the FFCRA include contract employees?
No, the FFCRA does not cover employees employed as independent contractors (i.e. those paid via Form 1099).
Which employers are subject to these new requirements?
There are no changes for large employers of 500 or more, they are exempt from the FFCRA.
Employers with fewer than 500 employees are generally required to comply with some exemptions. Employers with fewer than 50 workers can ask the secretary of labor for an exemption from providing family and medical paid sick leave if “it would jeopardize the viability of the business.”
Further, while the emergency FMLA leave generally requires employers to reinstate employees in the same job or an equivalent position when they return to work, there is an exemption for employers with fewer than 25 employees if the position no longer exists due to economic conditions or operational changes that are made because of the public health emergency.
What does it require?
The FFCRA requires qualifying employers to provide qualifying employees with 80 hours paid sick leave. Part-time employees are entitled to time equal to the number of hours they work on average over a two-week period.
The pay required is based on the employee’s “required compensation” (i.e. the employee’s regular rate of pay or the federal, state, or local minimum wage, whichever is greater) and the number of hours the employee would otherwise be scheduled to work.
The FFRCA also expands the Family Medical Leave Act (FMLA) leave provisions for those employers who are already covered by the FMLA. See discussion of the changes to FMLA below.
What is the maximum that an employer is required to pay?
The maximum an employee could be entitled to under this law is $511 per day and $5,110 total. Note that this is a cap on the amount payable for the paid sick leave that the employee would otherwise be entitled to based on their regular required compensation. If an employee’s regular compensation for 80 hours is less than this amount, their sick leave benefit will also be less.
It is important to note that the payout for each employee depends on what an employee is using it for.
If the employee is using that time because he or she is (a) subject to a government-imposed quarantine; (b) has been advised by a health care provider to self-quarantine; or (c) is experiencing symptoms of COVID-19 and is seeking a medical diagnosis, the employee is entitled to the maximum amount permitted by law, set forth above.
However, if the employee is taking sick time to (a) care for another individual subject to government-imposed quarantine or isolation; (b) to care for a child whose school or care facility is closed or whose regular care provider is unavailable; or (c) to deal with a “substantially similar condition,” that employee is entitled to a maximum amount of $200 per day and $2,000 total.
Will there be any tax breaks or other support to help my business pay for this for my affected employees?
Yes, in the form of tax credits against certain employer taxes that you would otherwise owe, but unfortunately will likely not/are not likely to benefit from them until 2021.
What changes are implemented to employer’s obligations under FMLA by the FFCRA?
The FFCRA amends FMLA to provide up to 12 weeks of emergency job-protected leave if an employee is unable to work or telework due to the following: (numbered or bulleted?) to a need to care for a child under 18 because that child’s school is closed, place of care is closed, or their regular child care provider is unavailable due to a public health emergency with respect to COVID-19.
The big changes come with regard to adding paid leave requirements. As most employers know, FMLA did not require employers to provide paid leave. Under the amended law, the first 10 days of such leave can be unpaid and an employee can substitute accrued vacation, personal, or sick leave during that time, but an employer may not require them to do so.
For the remaining 10 weeks, eligible workers must receive two-thirds of their regular rate of pay, capped at $200 per day (and $10,000 total).
For employee with variable hours each week, paid leave would be equal to the average number of hours worked per day over the previous six months.
It is important to note that employers will be subject to liability under the new law if they:
- Require an employee to use other paid leave before using the paid sick leave provided by the new legislation.
- Require an employee to find a replacement to cover his or her scheduled work hours.
- Retaliate against any employee who takes leave in accordance with the act.
- Retaliate against an employee who files a complaint or participates in a proceeding related to the act – including a proceeding that seeks to enforce an act.
The text of the FFCRA is available here: https://www.congress.gov/bill/116th-congress/house-bill/6201.
For more information regarding the applicability of this law to your business, complying with the FFCRA, applying for an exemption, or other questions, please contact employment attorney Jennifer Gross at [email protected] or at (810) 227-3103 ext. 114.