As we head into the weekend, here is some updated information on the new Families First Coronavirus Response Act.
On March 18, 2020, Congress passed and the President signed into law the Families First Coronavirus Response Act.
There are two primary components to the Act that concern employers: (1) expansion of the Family and Medical Leave Act (FMLA) leave to include paid leave in certain circumstances related to coronavirus, and (2) paid sick leave. Both sections go into effect on April 2, 2020. There are additional regulations that could be added by the U.S. Secretary of Labor, and we will update this information if and when those regulations come out. Before we get into the details, there are a couple of other points to note:
- This Act only applies to employers with fewer than 500 employees, and there are exceptions even among covered employers.
- The Act caps amounts to be paid to employees and makes the payments to employees fully reimbursable via tax credits.
EXPANSION OF FMLA
What Employers Must Do Under The New Act:
Provide 12 weeks of job-protected, paid leave for employees unable to work or telework because they must care for children if schools are closed or daycares are unavailable because of a public health emergency, in this case COVID-19. This is the only reason this leave is permissible.
Which Employers Does This Apply To?
Employers with fewer than 500 employees.
Which Employees Are Eligible?
Employees who have been working for the employer for at least 30 calendar days.
How Much Must The Employees On Leave Get Paid?
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Payment begins 10 days after the leave begins and are paid at no less than two-thirds their regular rate. Payments to employees using this leave are capped at $200 per day and $10,000 in the aggregate. Employees must be allowed to use accrued personal or sick leave during the first 10 days. This includes any mandatory PTO that has been accrued under Nevada’s new leave law that went into effect on January 1, 2020.
Who Is Exempt?
An employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of these new FMLA provisions.
The Secretary of Labor shall have authority to further regulate how to exclude certain healthcare providers and emergency responders and to exempt businesses with fewer than 50 employees. Thus far, however, there are no regulations from the Secretary of Labor regarding these possible exemptions.
What Are The Tax Credits?
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Each quarter, employers subject to this new Act are entitled to a fully refundable tax credit of 100 percent of the payments made by the employer. When Does This Go Into Effect and When Does It Expire: These provisions of the Act go into effect on April 2, 2020 and expire on December 31, 2020.
PAID SICK LEAVE
What Employers Must Do Under The New Act:
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Employers must provide full-time employees with 80 hours of paid sick leave if the employee cannot work or telework for circumstances related to COVID-19. Part-time employees are entitled to the number of hours of paid sick leave equal to the number of hours they work on average in a two-week period.
What Are The Reasons An Employee May Use This Lease:
- A government quarantine or isolation order related to COVID-19.
- Advised by healthcare providers to self-quarantine due to COVID-19.
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- Caring for an individual subject to a quarantine order or self-quarantine.
- Caring for children if schools are closed or their caregivers are unavailable because of a public health emergency.
- Experiencing substantially similar conditions as those specified by the Secretary of Health and Human Services.
Which Employers Does This Apply To?
Employers with fewer than 500 employees.
Which Employees Are Eligible?
All employees, regardless of length of employment.
How Much Must The Employees On Leave Get Paid?
Payments to employees using this leave must be at the higher of (1) their regular rate of pay, (2) the federal minimum wage, or (3) the local minimum wage. Payments to employees using this leave are capped at $511 per day and $5,110 in the aggregate. Employees absent to care for a sick family member or a child unable to attend school are compensated at two-thirds of the rate they would otherwise receive, capped at $200 per day and $2,000 in the aggregate.
How To Handle This With Existing Sick Leave Policies:
This new paid sick leave requirement is in addition to any sick leave or other PTO already offered by the employer. An employer may not require an employee to use other paid leave before using the sick leave under this new Act.
Who Is Exempt?
Employers of employees who are healthcare providers or emergency responders may exclude those employees from eligibility for the paid leave.
What Are The Tax Credits?
Each quarter, employers subject to this new Act are entitled to a fully refundable tax credit of 100 percent of the payments made by the employer.
When Does This Go Into Effect and When Does It Expire?
These provisions of the Act go into effect on April 2, 2020 and expire on December 31, 2020.
IN CONCLUSION
Although the new Act has passed and will be effective on April 2, 2020, there are still regulations related to the Act that the U.S. Secretary of Labor can enact. There will also likely be further clarifications of the Act as we head toward April 2. We will keep our clients updated as new information comes to light.
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