Last updated 4.10.2020 @ 12:10 pm
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Attorney Elizabeth Bolduc covers the Families First Coronavirus Response Act, with an in-depth discussion on the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act.
Trump Signs Families First Coronavirus Response Act into Law
President Trump signed the Families First Coronavirus Response Act into law. The bill was enacted in response to the spread of the coronavirus (COVID-19) and provides guaranteed free coronavirus testing, establishes paid leave, enhances unemployment insurance, expands food security initiative and increases federal Medicaid funding. The law will become effective April 1, 2020. By way of background, On March 18, 2020 the Senate passed the Families First Coronavirus Response Act which was previously passed in the House March 14 with revision on March 16. The March 16 revisions to the bill was a result of concerns on the harsh economic impact on small businesses the bill would impose. The DOL has announced it will not sue employers for violation of the FFCRA through April 17, 2020, provided that the employer has made “reasonable, good faith efforts to comply with the Act.” An employer acts “reasonably” and “in good faith” when:
- the employer remedies any violations, including by making all affected employees whole as soon as practicable.
- The violations of the Act were not “willful.” (i.e. whether the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited…”)
- The Department receives a written commitment from the employer to comply with the FFCRA in the future.
The department will retain its right to exercise its enforcement and make the violated parties whole if an employer willfully violates the act, fails to provide written commitment to comply with the FFCRA in the future, or fails to remedy the violation.
The bill includes the Emergency Family and Medical Leave Expansion Act, the Emergency Paid Sick Leave Act and the Emergency Unemployment Insurance Stabilization and Access Act of 2020. Below is an outline of each Act.
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT (see video above or FMLA page for more details)
What: The Emergency Family and Medical Leave Expansion Act is a temporary amendment to the Family and Medical Leave Act of 1993 (FMLA). The FMLA requires covered employers to provide eligible employees up to 12 weeks of unpaid leave for qualifying reasons. The bill, which is set to become effective no later than 15 days after it is enacted, ends on December 31, 2020.
Covered employer: All employers with fewer than 500 employees and government employers for each working day for 20 or more calendar workweeks in the current or preceding calendar year. Small businesses with fewer than 50 employees may be exempt from the bill if such leave would jeopardize the viability of the business.
Eligible Employee: Full-time or Part-time employees that have been employed for at least 30- calendar days.
Reasons for FMLA Leave: Circumstances where an employee is unable to work or telework due to the need to care for a minor child if the child’s school or place of child care has been closed or the child care provider is unavailable, due to a public health emergency.
Pay during Leave: The first 10-days of leave may be unpaid. While employees may elect to substitute any accrued vacation, personal, medical or sick leave during such time, the employer may not require the employee to use the paid leave benefits. After the 14-days, employers must pay employees on leave no less than two-thirds of the employee’s usual pay. Paid leave is limited to $200 per day and $10,000 in total.
Job Restoration: Employers with fewer than 25 employees are not required to restore an employee’s job if the employee’s position no longer exists after the leave due to an economic downturn or other changes in operations affecting employment due to a public health emergency during the leave period.
Exclusions: Employers with less than 50 employees in a 75-mile radius are immune from civil FMLA damages in an FMLA lawsuit. Employers may exclude employees who are health care providers or emergency responders from this emergency FMLA entitlement.
EMERGENCY PAID SICK LEAVE ACT (see video above or Paid Sick Leave page for more details)
What: Requires Employers with fewer than 500 employees and government employers to provide all employees upon hire two weeks of paid sick leave, paid at the employee’s regular rate.
Effective date: The bill would become effective 15 days after its enactment and terminates on December 31, 2020.
Reasons for Sick 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 because of COVID-19;
- The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- The employee is caring for an individual subject or advised to quarantine or isolation;
- The employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
- The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
- Full-time employees are entitled to 2 weeks (80 hours) of usual pay.
- Part-time employees entitled to the typical number of hours that they work in a typical two-week period.
Limits of Sick Pay: Limits paid leave to $511 per day and $5,110 in total where leave is taken for an employee’s illness or quarantine reasons (1), (2), and (3) noted above. Limited to $200 per day and $2,000 in total where leave is taken for care for others and school closure reasons (4), (5), or (6). Employees are paid at two-thirds the employee’s regular rate to care for a family member for such purposes or to care for a child whose school has closed, or childcare provider is unavailable, due to the coronavirus.
Requirement to use paid time off: An employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time.
Carryover: These benefits shall not carry over from 1 year to the next.
Exemption: An employer may exclude employees who are health care providers or emergency responders from this coverage. The bill also grants the Secretary of Labor the authority to issue regulations to exclude certain health care providers and emergency responders from the definition of employee. Small businesses with fewer than 50 employees are also exempt from these requirements if they jeopardize the viability of a business as a going concern.
Retaliation: The bill prohibits retaliating against any employee who takes leave under the new law.
Penalties: The bill further provides that the failure to pay required sick leave will be treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act.
EMERGENCY UNEMPLOYMENT INSURANCE STABILIZATION AND ACCESS ACT OF 2020 (see Unemployment page for more details)
What: The Bill amends the Social Security Act by providing $1 billion in 2020 for emergency grants to states for activities related to processing and paying unemployment insurance (UI) benefits, under certain conditions.
$500 million would be reserved for emergency grants to states which experienced at least a 10 percent increase in unemployment. Those states would be eligible to receive an additional grant, in the same amount as the initial grant, to assist with costs related to the unemployment spike, and would also be required to take steps to temporarily ease eligibility requirements that are limiting access to UI during the COVID-19 outbreak, like work search requirements, required waiting periods, and requirements to increase employer UI taxes if they have high layoff rates.
EMPLOYER TAX CREDIT
The Families First Coronavirus Response Act (the “FFCRA”), signed by Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
Eligible Employers claiming the credits for qualified leave wages (and allocable qualified health plan expenses and the Eligible Employer’s share of Medicare taxes), must retain records and documentation related to and supporting each employee’s leave to substantiate the claim for the credits, and retain the Forms 941, Employer’s Quarterly Federal Tax Return, and 7200, Advance of Employer Credits Due To COVID-19, and any other applicable filings made to the IRS requesting the credit.
Documentation for Employee Eligibility
An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:
- The employee’s name;
- The date or dates for which leave is requested;
- A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
- A statement that the employee is unable to work, including by means of telework, for such reason.
In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.
In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
Eligible Employer Documentation
An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if, in addition to the information set forth for Eligible Employee Documentation, the employer creates and maintains records that include the following information:
- Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
- Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
- Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).
An Eligible Employer should keep all records of employment taxes for at least 4 years after the date the tax becomes due or is paid, whichever comes later. These should be available for IRS review.