COVID-19 Update: Families First Coronavirus Response

COVID-19 Update: Families First Coronavirus ResponseWhat employers need to know about the recently enacted emergency family leave and paid sick leave laws

The Families First Coronavirus Response Act (H.R. 6201), which was signed into law on March 18, 2020, provides paid emergency family leave and paid sick leave for people affected by COVID-19. These provisions take effect April 1, 2020 and expire on December 31, 2020. They will not be applied retroactively, according to the Department of Labor.

The Secretary of Labor has authority to issue regulations to exclude certain exempt small businesses with fewer than 50 employees (if the requirements would jeopardize the viability of the business going forward) as well as health care providers and emergency responders from the definition of eligible employee.

Each covered employer must post a notice of FFCRA requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees or posting it on an employee-information internal or external website.

Emergency Family and Medical Leave Expansion Act

  • Leave would cover employees who are unable to work or telework because they are caring for their child (18 years or younger) as a result of school closure or unavailable childcare provider due to a public health emergency.
  • All employees who have been employed for at least 30 calendar days by the employer are eligible.
  • Employers with 25 or fewer employees are not required to restore an employee once leave has been exhausted, if the position held by the employee when the leave began does not exist due to economic conditions or other changes in operating conditions of the employer caused by a public health emergency.
  • Employers with 500 or fewer employees would be required to provide the paid leave.
  • Employers are not required to pay the initial ten days of leave. An employee can opt to substitute accrued vacation, personal or sick leave during this time, but an employer may not require an employee to do so.
  • Employers must pay ten remaining weeks of leave at a rate not less than two-thirds of employee’s regular rate, not to exceed $200 per day and $10,000 in total.
  • For employees whose schedule varies from week to week, the employer should use:
    1. A number equal to the average number of hours the employee was scheduled per day over the six-month period ending on the date which the employee takes the leave, including hours for which the employee took leave of any type; or
    2. If the employee did not work over such period, the reasonable expectation of the employee at the time of hiring of the average number of hours per day the employee would normally be scheduled to work.

Emergency Paid Sick Leave Act

Private employers with 500 or fewer employees are required to provide 80 hours of fully paid sick leave to full-time employees (pro-rata rules would apply to part-time employees) on top of any other existing paid leave program of the employer. All employees are immediately eligible.

Covered employees eligible for paid sick leave include:

  1. Employee subject to a Federal, State, or local quarantine or isolation order related to coronavirus;
  2. Employee has been advised by health care provider to self-quarantine due to coronavirus;
  3. Employee is experiencing symptoms of coronavirus;
  4. Employee is caring for an individual who is subject to an order described in (1) or has been advised as described in (2);
  5. Employee is caring for their child because the school is closed or childcare provider is unavailable due to coronavirus; or
  6. Employee is experiencing a similar condition specified by Secretary of HHS.
  • For a use described in (1), (2), or (3), employers would be required to pay employees their full wages, not to exceed $511 per day and $5,110 in total.
  • For a use described in (4),(5), or (6), employers would be required to pay employees two-thirds of their wages, not to exceed $200 per day and $2,000 in total.
  • An employer can require the worker to follow reasonable notice procedures to continue receiving the benefit after the first workday an employee receives paid sick time under the act.
  • Employers are prohibited from retaliating against any employee who takes leave in accordance with the act. Employers that fail to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.
  • For employees whose schedule varies from week to week, the employer should use:
    1. A number equal to the average number of hours that the employee was scheduled per day over the six-month period ending on the date which the employee takes the leave, including hours for which the employee took leave of any type; or
    2. If the employee did not work over such period, the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

Tax Credits for Paid Sick Leave and Paid FMLA

  • A tax credit is created for each calendar quarter for an amount equal to 100 percent of the qualified sick leave wages and qualified family leave wages paid by an employer during the calendar quarter, including some costs associated with providing and maintaining a group health plan during such paid leaves.
  • Employers pay the paid leave and can take an immediate tax credit by retaining the amount of payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
  • The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
  • If the leave paid is greater than the amount of payroll taxes owed, employers will file a request for a refund from the IRS. They expect requests to be processed approximately two weeks from receipt.

KRS professionals are available and working remotely. Please contact us if you have any questions, concerns, or need advisement during this unprecedented time.