Small Business Client Alert - Families First Coronavirus Response Act

As an employer, if you haven’t paid attention to the Family and Medical Leave Act (“FMLA”), it is likely because it never applied to you. Among other reasons, in the private sector, FMLA only applied to employers with 50 or more employees and to employees who had worked for their employer for at least 12 months. All of that is changing now with the Families First Coronavirus Response Act (“FFCRA”), which was signed into law yesterday.

Emergency Family and Medical Leave Expansion Act

The FFCRA affects all employers with fewer than 500 employees. The bill calls for qualifying employers to provide up to 12 weeks of FMLA leave for employees who have a qualifying need related to a public health emergency and who have been on the payroll for at least 30 calendar days. A qualifying need includes the employee leaving work to care for a son or daughter if the child’s schools or childcare centers are closed or if their childcare provider is unavailable because of COVID-19. The first 10 days are unpaid and employees may choose to use accrued vacation, sick leave, or personal time during those initial 2 weeks. Thereafter, the employer is responsible for paying the employee two-thirds of the employee’s regular rate. Payments are capped at $200/day.

Emergency Paid Sick Leave Act

In addition to the expanded FMLA, the FFCRA provides for paid sick leave for every employee—not only those who have worked for their employer for at least 30 days. Full-time employees are entitled to 80 hours of paid sick leave, and part-time employees are entitled to their average hours over the course of two weeks. If a part-time employee works 20 hours a week on average, then he or she will be entitled to 40 hours of paid sick leave.

If the employee takes sick leave because (i) the employee is under a governmental quarantine or isolation order, (ii) is advised to self-quarantine by a health care provider, or (iii) the employee is experiencing COVID-19 symptoms and is awaiting a medical diagnosis, the employee’s paid sick time is capped at $511/day. On the other hand, if the employee takes sick leave to (i) care for someone who has been advised or ordered to quarantine, (ii) care for a son or daughter whose school or place of care is closed because of COVID-19, or (iii) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultant with the Secretary of the Treasury and the Secretary of Labor, then the employee is entitled to two-thirds of his or her regular compensation, but capped at $200/day.

When does the Families First Coronavirus Response Act go into effect?

The rules go into effect April 2, 2020 and expire on December 31, 2020.

How will employers pay for paid leave?

Employers will receive a tax credit for paid leave to offset the costs of the wages paid. The tax credit is allowed against the tax imposed under the employer portion of Social Security and Railroad Retirement payroll taxes.

What if I can’t afford to pay sick leave for my employees?

The U.S. Department of Labor will have the authority to issue regulations to exempt businesses with fewer than 50 employees from having to provide emergency leave if doing so would jeopardize the viability of the business. We don’t know whether the Department of Labor will take the steps needed to exempt small businesses.

What if I already have a paid leave policy for my employees?

This Act is in addition to the already existing policies in the employer’s workplace. An employer may not require an employee to use other paid leave provided by the employer before using the paid sick leave provided under the Act.

Notice Requirement

Employers must post and keep posted, in conspicuous places, notices of the emergency paid sick leave requirements. The Secretary of Labor will provide a model notice for use within seven days.

3/31/2020 Update: The Department of Labor has published guidance explaining paid sick leave and expanded family and medical leave here.

Disclaimer: This article is provided for educational and informational purposes only. An attorney-client relationship is not formed by visiting this website, commenting on this post, or submitting information through the Contact Us form. The information provided here is not intended to, and should not replace, advice from a licensed attorney in your state. Kimberly Shin Law Firm PLLC disclaims all liability with regard to any and all actions taken or not taken as a result of information contained here.