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Family First Coronavirus Response Act

Review updates and information regarding COVID-19.

Families First Coronavirus Response Act

 

As of March 18th, 2020 the United States Government passed the Families First Coronavirus Response Act. Click on this link to view PayrollCentric’s March 26, 2020 web presentation covering the Families First Coronavirus Response Act.

 

You can view the U.S. Department of Labor’s FFCRA Questions and Answers page for additional information.

 

This new act is made up of two sections:

 

  1. The Emergency Paid Sick Leave Act providing additional sick pay for employees experiencing hardship as a result of COVID-19. This act also prohibits an employer from retaliating against and employee who seeks to use Emergency Paid Sick leave.
  2. Family Medical Leave Act providing for the expansion of leave to employers with less than 50 employees.

 

The Families First Coronavirus Response Act takes effect on April 1, 2020 and ends on December 31, 2020. The act also sets forth potential tax credits for employers offering Paid Sick and Family Medical Leave.

 

Please note that the Federal Government, the State of California and several municipalities including the City of Los Angeles are enacting new laws. The information below is specific to the Federal Government’s Coronavirus Response Act. PayrollCentric will continue providing updates at the State and Local level.

 

Emergency Paid Sick Leave Act

 

Employers with fewer than 500 employees to provide up to 80 hours of paid sick leave to all employees unable to work as a result of COVID-19 related challenges. These challenges include:

 

  1. The employee is under a quarantine or isolation order.
  2. The employee’s health care provider has advised them to self-quarantine.
  3. The employee is experiencing COVID-19 symptoms and is seeking medical care.
  4. The employee is caring for someone under quarantine be that mandatory or at the suggestion of their healthcare provider.
  5. The employee is caring for a child whose school or child-care facility has been closed as a result of COVID-19 precautions.
  6. The employee is experiencing symptoms.

 

Eligibility:

 

All part-time and full-time employees of a business with less than 500 employees are entitled to additional paid sick leave. This does not include employees currently on furlough or unpaid leave.

There are some eligibility exceptions to the healthcare industry.

 

Sick Leave Amount:

 

The sick leave provided by the Emergency Paid Sick Leave Act is in addition to any current sick or paid time off the employee may have accrued. Emergency Sick Leave is not accrued and is available for immediate use by the employee regardless of tenure. New hire waiting periods are also waived for Emergency Paid Sick leave. Employees are allowed to use Emergency Sick Leave prior to using other paid leave such as vacation or accrued sick.

 

Full-time employees receive an additional 80 hours of paid sick leave. Part-time employees receive additional sick leave equivalent to the average amount of hours worked in a two-week period. Variable hour employees receive additional sick leave based on average amount of hours worked over a six month period.

 

Sick Leave Wages:

 

The Emergency Paid Sick Leave Act lists specific amounts regarding not just the hours but also the wages to which an employee is entitled. These amounts are based on the reason for which an employee is taking Emergency Paid Sick Leave.

 

  1. Employees must receive their regular rate of pay or applicable minimum wage up to a max of $511 per day and a total of $5,110. This generally applies to when employees themselves are under quarantine, have been instructed to self- quarantine and / or are experiencing symptoms.
  2. Employees may receive 2/3 of their rate of pay up to a max of $200 per day and a total of $2,000 if they are taking Emergency Sick Leave to care for a child or another individual.

 

Emergency Family and Medical Leave Expansion Act

 

The Family Medical Leave Act or FMLA has historically applied to companies with 50 or more employees. The Emergency Family and Medical Leave Expansion Act changes the requirement to offer leave to all companies with less than 500 employees. This leave is known as Public Health Emergency Leave or PHEL.

 

Eligibility:

 

To qualify for Public Health Emergency Leave an employee must:

 

  1. Have worked for the company for 30 calendar (not business) days prior to taking leave.
  2. The employee is unable to work because they need to care for a child under 18 whose typical childcare provider is unavailable as a result of COVID-19
  3. The employee is unable to work because they need to care for a child under 18 whose school or childcare facility is closed as a result of COVID-19.

 

Emergency Leave Amount:

 

Based on the reasons above, an employee may use up to 12 weeks of job-protected leave.

 

Emergency Leave Wages:

 

The Emergency Family and Medical Leave Expansion Act allows for the first 10 days of leave to be unpaid. However, the employee is likely to choose to take Emergency Paid Sick or any other accrued paid leave at this time, making it unlikely that an employer would experience a cost reduction. Employees are entitled to paid Public Health Emergency Leave after the first 10 days, paid at no less than 2/3 regular pay up to a max of $200 per day or $10,000 total.

 

Job Restoration:

 

At the end of Emergency Leave, the employer must generally return the employee to the same or equivalent position. Employers with fewer than 25 employees are exempt from this requirement if:

 

  • The employee’s position doesn’t exist after after Emergency Leave due to economic conditions or other changes in operating conditions that affect employment and were caused by a public health emergency during the period of leave;
  • The employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held before the leave; and
  • The employer makes reasonable efforts to contact the employee if an equivalent position becomes available within the next year.

 

Tax Credits Under the Families First Coronavirus Response Act

 

As of yet, the Federal Government has not extended filing or payment deadlines for payroll taxes.

 

The act does describe an employer tax credit be allowed against taxes imposed under section 3111(a) or 3221(a) of the IRS code. This applies to companies with under 500 employees.

 

The act allows for a credit against Social Security tax liability for each calendar quarter in an amount equal to 100 percent of the qualified sick leave wages paid by the company. Caps do apply. Employer paid health insurance plan premiums may increase the credit amount. Emergency Paid Sick Leave and Public Health Emergency Leave wages are exempt from Social Security taxes under the act.

 

The tax credit does reduce the amount of federal employment taxes a company pays, however additional instruction is required from the IRS to properly administer timely reimbursement to employers.

 

Compliance:

 

We suggest reviewing your policies to ensure compliance with the new act. Please review the links below for sample policies and additional resources.

 

It is important to know that The U.S. Department of Labor has the authority to issue regulations exempting employers with less than 50 employees from the expanded Paid Family Leave requirements where it would “jeopardize the viability of the business as a going concern”. However, they have yet to do so. It is advisable to comply with all aspects of the act until such time as the government provides additional instruction

 

 

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