On March 18th, the Families First Coronavirus Response Act (FFCRA) was signed into law. The final version of the law does have significant changes from the House version. Unlike most laws where agencies take months to provide details before releasing final regulations, the provisions outlined below are effective April 2nd.
We are providing an overview of the main provisions applicable to employers and will provide more detail as it becomes available.
It is important to note that FFCRA doesn’t affect companies with more than 500 employees. For employers with 500 or fewer employees, the Act has put into effect two major changes:
- Expands the Family and Medical Leave Act
- Provides employees with paid emergency sick time
Both portions of the law go into effect on April 2, 2020, and expire on December 31, 2020.
EMERGENCY FAMILY AND MEDICAL LEAVE ACT
- Covers employers with less than 500 employees, including public agencies of any size
- Removes FMLA employer size requirement of 50 or more employees
- Removes FMLA employee eligibility requirement of 50 or more full-time equivalent employees within a 75-mile radius
- A covered employee is any full or part-time employee who has been on the payroll for at least 30 calendar days
- An eligible employee may take up to 12 weeks of job-protected FMLA leave for “a qualifying need related to a public health emergency”
- “Qualifying need” is defined as circumstances where an employee is unable to work (or telework) because of a need to care for a child if the child’s (primary or secondary) school or place of child care has been closed or is unavailable due to a public health emergency declared with respect to COVID-19 coronavirus
- The first 10 days of leave are unpaid, but an employee may substitute accrued paid leave (accrued vacation, personal leave, or sick leave) OR emergency paid sick leave under the FFCRA
- An employer may not require such substitution
- Following the initial 10 days, the employee is paid not less than 2/3 of the employee’s regular rate of pay for each day of FMLA leave taken
- Calculation based on regular number of hours scheduled to work
- Maximum payment of $200 per day; $10,000 total
- Job restoration: For the most part, this is job-protected leave, however, employees taking leave provided under this law do not have any greater right to continued employment than those not on leave
- Additionally, small employers (under 25 employees) are exempt from this requirement if the job has been eliminated due to operational changes (due to the public health emergency)
- If a small employer does not return the employee to the same or equivalent position, it must make reasonable efforts to contact the employee (for up to a year) if an equivalent position becomes available
- Employer Tax Credits: Employers (with fewer than 500 employees) may claim a tax credit of 100% of qualified paid leave benefits paid by an employer (subject to caps listed and offset against social security taxes paid by the employer)
EMERGENCY PAID SICK LEAVE ACT
- Covers private employers with fewer than 500 employees, public agencies, any entity that is not a private entity and anyone acting directly or indirectly in the interests of the employer
- Employers with less than 50 employees may be excluded where a hardship exemption applies
- Employers with less than 50 employees may request a hardship exemption from the Department of Labor (DOL)
- Employees are eligible for sick leave immediately- no eligibility waiting periods
- Reasons for leave:
- The employee is subject to a Federal, state or local quarantine or isolation order related to COVID-19
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
- The employee is caring for an individual who is subject to a Federal, state or local quarantine order, or who has been advised to self-quarantine due to concerns related to COVID-19
- The employee is caring for the employee’s son or daughter, if the child’s school or childcare facility has been closed or the child’s care provider is unavailable due to COVID-19 precautions
- The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and the Department of Labor
- Employees are entitled to:
- Full-time employees (subject to limited exceptions) regardless of the length of their employment: 80 hours at the regular pay rate
- Part-time employees: the average number of hours worked over a two-week period at the regular rate of pay. Employers are required to pay an employee at his or her regular rate of pay, up to $511 per day ($5,110 total) for reasons (1) – (3) above
- Employers are required to pay an employee at 2/3rds his or her regular rate of pay up to $200 per day ($2,000 total) for reasons (4) – (6) above
- Benefits are in addition to any employer-provided or statutory sick leave benefits
- Employers must allow employees to use the COVID-19 sick leave before other sick leave
- Leave may not be carried over and is not paid out upon separation of employment
- Employer Tax Credits (for employers with fewer than 500 employees) are provided up to 100% of the sick leave, subject to certain caps, and offset against social security taxes paid by the employer.
The Department of Labor is required to provide a model notice by March 25, 2020, for employers to conspicuously post in the workplace.
We will continue to watch for additional guidance and will update you as information becomes available.
Distribution of this information to anyone other than the original recipient is unauthorized. Any reproduction of these materials, in whole or in part, or the divulgence of any of its contents, without the prior consent of Fred C. Church, Inc. is prohibited.
Be sure to visit the Fred C. Church COVID-19 Resource Hub where you can find more information about common commercial insurance coverages and how they may respond to a business loss, unique business risks associated with the pandemic, COVID-19-related employee benefits considerations, and other helpful resources.