Families First Coronavirus Response Act,
An Update for Employers
March 25, 2020
As promised, answers to the questions we have are being answered by various agencies. Yesterday, the Department of Labor clarified some of those, so we wanted to share them with you.
First, the new effective date for all provisions is April 1, 2020, not April 2 as published in the Act. Benefits are not payable retroactively under the law which means, if someone is out of work prior to April 1, no benefits are payable for that time.
Another question many have is “how do you count employees to determine if you have 500?” We now know that you include employees of all types: full-time and part-time employees, employees on leave, temporaries (even through temp agency) and day laborers supplied by temp agency. You do not include independent contractors. If common ownership between companies exist, you must count all employees combined as you would when testing your benefit plans for non-discrimination.
Small businesses (under 50 employees) may claim a Small Business Exemption by documenting why the business meets the criteria required. However, the criteria for this exemption are still pending.
The “regular rate of pay” for hourly (exempt) employees includes bonuses, commissions, tips or piece rates. All paid leave benefits must be paid based on the “regular rate of pay.” If you have questions about how this is calculated take a look at this fact sheet or reach out to our Payentry’s HR Professionals at hrservices@payentry.com.
The benefits available for the emergency paid sick leave and the emergency family and medical leave can be stacked. The first 10 days of the Emergency Family Medical Leave are unpaid. An employee can use the Emergency Paid Sick leave which has a benefit of 10 days, to cover this gap in pay.
More clarifications are coming as we learn more about the new law and others that will impact businesses and their employees.
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Families First Coronavirus Response Act…What Employers Need to Know Right Now
March 19, 2020
On March 18, the U.S. Senate approved the Families First Coronavirus Response Act and the President signed it into law a few hours later. Employers will be especially interested in the paid leave benefits and enhanced unemployment insurance benefits for people affected.
New Paid Leave
The new law creates two new paid leave programs that will take effect 15 days after the law was enacted, expires on December 31, 2020 and applies to employers with fewer than 500 employees. It also includes a series of tax credits that should help offset employer costs related to the new paid leave programs.
Emergency Paid Sick Leave
The legislation requires that two weeks of paid sick leave be available immediately to all employees for reasons related to COVID-19. The two weeks are defined as 80 work hours for full-time employees. For part-time employees, the two weeks are defined as the number of hours that a given employee typically works in two weeks. The qualifying reasons include:
- Self-quarantining due to coronavirus
- Obtaining a personal diagnosis or care for coronavirus exposure or symptoms
- Assisting a family member who is self-quarantined because of a coronavirus diagnosis or is experiencing symptoms of coronavirus and needs to obtain medical diagnosis or care
- Caring for a child whose school or place of care has been closed, or because the employee’s child care provider is unavailable due to coronavirus.
The definition of family member is broad and includes a parent, spouse and child under 18. It also includes a son or daughter, sibling, next of kin, grandparent or grandchild of the employee if that person is a pregnant woman, senior citizen, individual with a disability, or someone who has access or functional needs.
Employees are entitled to their full regular rate of pay if the leave is required for their own coronavirus illness. If employees are on leave to care for a family member who may be ill due to coronavirus or to care for a child whose school or child care provider is closed or unavailable due to the virus, the required pay is two-thirds of their regular rate of pay.
If an employer already provides paid sick leave, the new paid sick time (for a public health emergency declaration) specified under this bill must be offered in addition to their existing paid leave, and the employer may not change existing policies to avoid paid sick leave obligations. Also, an employer cannot require that employees use other paid time off — such as vacation, personal days or PTO banks—before using the new emergency paid leave.
Employers must post a public notice informing employees of their rights to emergency paid sick leave. The Department of Labor (DOL) will provide a model notice within seven days.
Emergency Family and Medical Leave
In addition to emergency paid sick leave, the Act expands the Family and Medical Leave Act (FMLA) provisions to require 12 weeks of job-protected public health emergency leave. The first ten days of leave can be unpaid and employees can, but do not have to, use other forms of accrued paid leave, such as vacation, personal leave or sick leave during that time. After the first two weeks, employers must pay workers at least two-thirds of their regular rate of pay. An employee would be entitled to the emergency leave if they have worked for an employer at least 30 calendar days.
Emergency leave would be available where an employee is unable to work because his or her minor child’s school, daycare, or other place of childcare has been closed or is unavailable due to a public health emergency.
Under the Act, the definition of family member is broad and matches the definition for emergency paid sick leave. The expanded FMLA emergency leave also applies to multiemployer plans in the same way that emergency paid sick leave does.
The Families First Coronavirus Response Act allows the DOL to issue regulations related to emergency family and medical leave to exclude certain health care workers and emergency responders and to exempt small businesses with fewer than 50 employees, if these requirements would jeopardize the viability of their business. There’s also an exception for employers with fewer than 25 employees concerning the job protection aspect of the bill. The employer is not required to protect jobs if employees go on emergency leave and their job doesn’t exist when they are able to return because the business has experienced an economic downturn or other changes due to the public health emergency. To qualify for this exemption, the employer would also have to make reasonable efforts to restore the employees to equivalent jobs for up to a year after the leave.
Tax Credits for Paid Leave
A refundable payroll tax credit will be available to employers that provide paid emergency sick leave or paid emergency family and medical leave through 2020 as follows:
- For paid emergency sick leave, the tax credit for employers will be 100% of wages paid up to $511 per employee per day for all employees taking leave for their own prevention, care or treatment of the coronavirus. If the leave is due to caring for a family member or because of a child’s school closing, the cap is $200 per employee per day.
- For paid emergency family and medical leave, the tax credit will be 100% of wages paid up to $200 per employee per day and no more than $10,000 total per employee.
EMERGENCY UNEMPLOYMENT INSURANCE STABILIZATION AND ACCESS ACT OF 2020
Unemployment laws in each state vary with respect to waiting periods, qualifications and payments. The Act provides each state with additional funds to address the increase in the number of workers who will be filing due to this emergency. In order to receive additional funding from the Federal Government to support the overwhelming impact of COVID-19, states must ease eligibility requirements and access to UE compensation for claimants including:
- Waiving work search requirements
- Waiving waiting period
- Not holding employers chargeable for these claims.
Several states have already made changes to their requirements and benefits. Click here for more details.
For questions, please contact hrservices@payentry.com to speak to an HR professional about how this may impact your business.