What does the Families First Coronavirus Response Act mean for your business?

The Families First Coronavirus Response Act was signed into law on March 18 and will be in effect from April 2, 2020-December 31, 2020.  The law contains two important sections: (1) the Emergency Family and Medical Leave Expansion Act (EFMLEA or Emergency FMLA); and (2) the Emergency Paid Sick Leave Act (EPSLA). Note that some provisions have changed since the bill was passed by the House.

(1)    Emergency Family and Medical Leave Expansion (EFMLA or Emergency FMLA)

This is an expanded version of the FMLA, but importantly, it applies to all employers with fewer than 500 employees.  Employers with fewer than 50 employees are not automatically exempted, but the Secretary of Labor can issue regulations for good cause to exempt such small businesses.

And unlike the core FMLA, employees do not need to be employed for 12 months.  Workers are eligible after working for at least 30 calendar days.

Leave is available to employees who cannot work onsite or remotely due to the need to care for a son or daughter under 18 whose school or daycare is closed due to the coronavirus emergency.

The first 10 days of leave is unpaid, but employees can choose to use vacation or PTO pay during that time.  After 10 days, employers will be required to pay 2/3 of the employee’s regular rate of pay - up to a maximum of $200 per day and $10,000 total - for the duration of the employee’s leave.  After that maximum is reached, the remainder of the leave (no more than 12 weeks) is unpaid.

Like the FMLA, EFMLEA requires employers to return employees to work in the same position at the end of leave unless:  (a) the employee’s position no longer exists due to economic or operating impact caused by COVID-19 (or Coronavirus), and (b) the employer makes reasonable efforts to restore the employee to an equivalent position for one year. There is a limited exception for employers with under 25 employees.

(2)   Emergency Paid Sick Leave Act (EPSLA)

This provision also applies to all employers with fewer than 500 employees.  Employers with fewer than 50 employees may apply for exemption if it jeopardizes the viability of the business.  All full-time and part-time employees are immediately eligible with no minimum period of employment.

When am I required to provide emergency paid sick leave?

When an employee cannot work on-site or remotely due to one of the following:

1. employee is subject to federal, state or local quarantine or isolation order;
2. employee has been advised by healthcare provider to self-quarantine;
3. employee is experiencing symptoms of coronavirus and seeking medical diagnosis;
4. employee is caring for a person subject to quarantine order or who has been advised by a healthcare provider to self-quarantine;
5. employee is caring for a son or daughter whose school or daycare is closed;
6. employee is experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services, the Secretary of the Treasury, and/or the Secretary of Labor.

The Act does not address documentation. For now, employers should require a written statement from the employee’s health care provider about the need for leave to determine whether the employee qualifies.

 *If an employee qualifies for both Emergency Family Leave and Emergency Paid Sick Leave, the employee may use the paid leave to cover the first 10 unpaid days of Family Leave.

 **Employees may take paid leave provided by the employer in addition to leave required by the Act.

 ***Employers may not change their policies after passage of the Act (April 2, 2020) to reduce leave currently provided under existing policies.

 **** Employees may take Emergency Paid Sick Leave before any other leave provided by employers.

Tax Credits for Leave Paid Under the Emergency Acts

Employers who are required to offer Emergency FMLA and Emergency Paid Sick Leave are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter as required under the EPSLA. These tax credits are allowed against the employer portion of Social Security taxes, and employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.

The qualified sick leave wages are capped at $511 per day ($200 per day if caring for a family member or child) for up to 10 days per employee in each calendar quarter. The same credit applies to wages paid by employers for each calendar quarter in accordance with the EFMLA. The qualified family leave wages are capped at $200 per day for each individual, up to $10,000 total, per calendar quarter.

Employers are required to publish a policy outlining the requirements of the Act, and the Department of Labor will publish a poster in the near future that employers must post in the workplace. 

Stay tuned for more updates and resources.