Below is a draft summary of the FMLA Expansion and Emergency Paid Sick Leave Act. We are still waiting on information as to how to implement these new laws that go into effect April 2, 2020. We assume there will be further guidance on mandatory FMLA documents/forms that will need to be updated to accommodate this new eligibility category and what will be required to track emergency paid sick leave. We will share new information and requirements when guidance is available. Many are advising that if you have not recently reviewed your current sick leave policies with an attorney, that now is a good time to do so.
The U.S. Senate approved the Families First Coronavirus Response Act in a 90-8 vote on March 18, 2020, and President Donald Trump signed it into law a few hours later. The new law will take effect on April 2, 2020, and will remain in effect until December 31, 2020.
The Families First Coronavirus Response Act (H.R. 6201) will provide:
- Free coronavirus testing;
- Paid emergency leave;
- Enhanced unemployment insurance;
- Additional funding for nutritional programs;
- Protections for health care workers and employees responsible for cleaning at-risk places, and
- Additional federal funds for Medicaid.
We have gathered information from trusted resources to provide you the following detail regarding The Families First Coronavirus Response Act. We hope that you find this information helpful.
Paid Family Leave
Employment protected leave requirements under the Family and Medical Leave Act of 1993, has now been expanded to include 12 weeks of public health emergency leave as a new type of eligible family medical leave (FML). The Act also requires that a portion of the FML (the remaining 10 weeks after a two-week elimination period) be paid and provides employers with payroll tax credits on wages paid for this purpose.
Which employers are subject to expanded FML under the Act?
The expanded FMLA requirements apply to any employer who employs fewer than 500 employees, whether on a full-time or part-time basis. The Act provides for discretion to the Department of Labor to issue regulations that exempt (1) health care providers, (2) emergency room responders, (3) employers with fewer than 50 employees of which the imposition of expanded FML would jeopardize the viability of their business.
Which employees are eligible for expanded FML under the Act?
- The employee must have been employed for at least 30 calendar days with the employer from which the FML is requested; and
- The leave must be to care for a son or daughter of the employee because, due to coronavirus, the school or place of care has been closed, or a childcare provider is unavailable.
What are the terms of the expanded leave?
- The expanded FML offers the same job protections as FMLA, which generally requires that the employee be reinstated to the same or an equivalent position upon their return to work.
- The first 10 days of this 12-week FML are unpaid, but the Act’s paid sick leave requirements (discussed below) provide for payment during these two weeks.
- An employee may elect to use any accrued vacation, personal, or medical/sick leave during the first 10 days of leave. After the initial 10-day period, the employer must pay the employee for the remainder of the 12-week period (10 weeks). Payment must be no less than two-thirds of the employee’s regular rate (determined under the Fair Labor Standards Act) multiplied by his/her regular schedule of weekly hours. This paid leave is capped at $200 per day and $10,000 total for the remainder of the leave.
*Multi-Employer collective bargaining agreements are specifically addressed in section 3103 of the FML Expansion Act.
Employer Posting Requirement: Employers must post a notice that advises employees of their rights under the Act. The Secretary of Labor is required to create a notice by March 25.
Tax Credits for Employers: Under the Act, employers that are required to provide the expanded FML would receive a tax credit that covers 100% of the payroll taxes (Social Security and Medicare) owed by the employer on wages paid to the employee for the leave (subject to caps of $200 per employee per day and $10,00 in the aggregate). The amount of the employer’s tax credit is also increased by the portion of the employer’s “qualified health plan expenses” attributable to the leave wages. For this purpose, qualified health plan expenses are amounts paid (or incurred) by the employer to provide a group health plan to the extent excludable from the employee’s gross income (e.g., medical insurance premiums).
Emergency Paid Sick Leave
Separate from the Paid Family Leave, The Emergency Paid Sick Leave Act requires 80 hours (10 days) of emergency paid sick leave for certain coronavirus-related absences that are in addition to any PTO the employer already provides. If an employee (or family member) is infected with the coronavirus, an employee may first use the emergency paid sick leave provided by this Act. An employer may not require an employee to use any other paid leave (i.e. under an existing policy) before the employee uses emergency paid sick leave. It is important to note that sick pay requests need to be evaluated separately from Paid Family Leave requests.
Which employers are required to provide Emergency Paid Sick leave?
Employers with fewer than 500 employees are required to provide Emergency Paid Sick leave.
Which employees are eligible for Emergency Paid Sick Leave under the Act?
An employee that is unable to telework because the employee:
- Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- Is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- Is caring for an individual who is subject to a governmental quarantine order or who has been advised by a health care provider to self-quarantine;
- Is caring for a son or daughter of the employee if school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions, or
- Is experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor.
Exceptions: If you are an employer of a “health care provider,” then you may elect to exclude an employee from the application of the Emergency Paid Sick Leave provisions.
*Multi-Employer collective bargaining agreements are specifically addressed in section 5106 of the Emergency Paid Sick Leave Act.
The sick leave must be paid in the following amounts:
The highest amount based on (1) the regular rate of pay as defined by the FLSA or (2) minimum wage in effect for the federal, state, and locality for an employee who:
- Is subject to Federal, State, or local quarantine or isolation order related to COVID-19; or
- Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
- Is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
The amount paid cannot exceed $511 per day and $5,110 in total for an employee using paid leave for any of these reasons.
Two-thirds of the highest amount based on (1) the regular rate of pay as defined by the FLSA or (2) minimum wage in effect for the federal, state, and locality for an employee who:
- Is caring for an individual who is subject to a governmental quarantine order or who has been advised by a health care provider to self-quarantine;
- Is caring for a son or daughter of the employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions; or
- Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
The amount paid cannot exceed $200 per day and $2,000 in total for an employee using paid leave for any of these reasons.
Tax Credits for Employers
As with the Act’s expanded FMLA, employers that are required to provide this paid sick leave would receive a tax credit that covers 100% of the Social Security and Medicare tax owed by the employer on wages paid to the employee for the sick leave. This credit would be subject to slightly different limits than the tax credit for expanded FMLA described above. Those limits are $511 per employee, per day and $5,111 in the aggregate if the sick leave is for the employee’s self-quarantine, and $200/day or $2,000 in the aggregate if the leave is to care for another individual. The Act allocates $15 million to the IRS to implement tax credits for paid sick and family medical leave.
If you have questions or need assistance, contact the Experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
- Join the Conversation in Our Coronavirus Facebook Group
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