** UPDATED March 30, 2020 **
With coronavirus spreading, it goes without saying that things are changing day-by-day. As more people in the United States become infected, businesses and their employees are beginning to feel the economic impact of COVID-19. Businesses are placing business continuity plans into place and preparing for more updates as they are announced, like The Families First Coronavirus Response Act.
On Saturday, March 14, the House of Representatives passed a bill that will aid those affected by coronavirus, particularly American workers. The Families First Coronavirus Response Act is an economic boost plan aimed at addressing the impact of COVID-19. The bill includes many provisions that apply to employers, such as paid sick leave for employees impacted by the virus and those serving as caregivers for those affected.
The House passed the bill on Saturday, March 14 and the Senate passed the bill relatively unchanged four days later. The bill was signed into law by the President on Wednesday, March 18.
The bill is the second in a three-layer approach to halting the spread of the pandemic.The first action was last week’s $8.3 billion emergency funding bill aimed at halting the spread of the virus, including vaccine development medical equipment for hospitals, and international efforts to stop the disease spread. The third part would be a proposed stimulus package, which is still in development and may include direct cash payments to adults and potential bailouts to several industries.
There are three provisions relating to employees being forced to miss work because of the COVID-19 outbreak: an emergency expansion of the Family Medical Leave Act (FMLA), a new federal paid sick leave law, and expanded unemployment insurance benefits. Here are some highlights from the bill that pertain to businesses:
Emergency Family And Medical Leave Expansion Act
Expanded Coverage And Eligibility – The Act significantly amends and expands the FMLA on a temporary basis. The current employee threshold for coverage would be changed from only covering employers with 50 or more to employers covering any workplace with fewer than 500 employees. It also lowers the eligibility requirement such that an employee who has worked for the employer for at least 30 days prior to the designated leave is eligible to receive paid family and medical leave. This means that thousands of employers not previously subject to the FMLA must provide job-protected leave to employees for a COVID-19 coronavirus-designated reason.
Reasons For Emergency Leave – Specifically, any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of paid, job-protected leave to allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) to care for an at-risk family member who is adhering to requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; or to (3) to care for the employee’s child if the child’s school or place of care (including if the childcare provider is unavailable) has been closed due to a public emergency.
Paid Leave – The first 10 days of Emergency FMLA may be unpaid, but an employee may elect to substitute any accrued paid time off, including vacation or sick leave, to cover some or all of the 10-day unpaid period. After the 10-day period, the employer must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. Employers with bargaining unit employees would apply the Emergency FMLA provisions consistent with the bargaining agreement.
Expanded Definitions – The Act also expands the definition of who is eligible as a “parent’ under FMLA, which includes a parent-in-law of the employee, a parent of a domestic partner of the employee, and a legal guardian or other person who served as the employee’s parent (also know as in loco parentis) when the employee was a child.
Small Business And Other Exemptions – The bill also gives the Secretary of Labor the authority to issue regulations to exempt some small business with fewer than 50 employees (when the imposition of such requirements would jeopardize the viability of the business as a going concern), and to exclude certain healthcare providers and emergency responders from the list of those employees eligible for leave.
Effective Date And Expiration – This program will become effective within 15 days of enactment and remain in effect until December 31, 2020.
Emergency Paid Sick Leave Act
This provision of the new act requires employers with less than 500 employees to provide employees with 80 hours of paid sick leave at the employee’s regular rate (or two-thirds the employee’s regular rate to care for a child whose school or daycare has closed due to coronavirus, or to care for a family member who is self-isolating due to a coronavirus diagnosis, who is showing symptoms and needs to obtain medical care, or who is complying with a requirement or recommendation to quarantine).
Reasons For Paid Sick Leave – The new law would allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) self-isolate because the employee is diagnosed with coronavirus; (3) obtain a diagnosis or care because the employee is exhibiting symptoms; (4) to care for or assist an at-risk family member who is self-isolating due to a diagnosis, who is exhibiting symptoms of coronavirus and needs to obtain medical care, or who is adhering to requirement or recommendation to quarantine due to a exposure to, or symptoms of, coronavirus; or (5) to take care of the employee’s child if the child’s school or place of care has been closed due to the COVID-19 coronavirus (including if the childcare provider is unavailable).
Carryover – This paid sick leave will not carry over to the following year and is in addition to any paid sick leave currently provided by employers.
Calculating Rate Of Pay – Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. A business employing fewer than 500 employees is required, at the request of the employee, to pay the employee for 10 days of mandated emergency paid leave instead of the initial 10 days of unpaid leave required by the Emergency Family and Medical Leave Expansion Act (summarized above).
An employer cannot change its current paid leave policy after the law passes to avoid the obligations of the additional leave mandated by the Emergency Paid Sick Leave Act. This program will be administered by the Social Security Administration over the next year until these requirements expire on December 31, 2020.
LATEST UPDATES on the Families First Coronavirus Response Act (FFCRA) – 3/30/2020
Since the bill was signed into law on March 18, new details about the guidelines and enforcement of the act. Here are a few of the most notable new tidbits:
- The Department of Labor (DOL) has released a mandatory employee rights poster for the FFCRA. It should be posted or distributed to employees electronically (via email or online portal) by April 1.
- The DOL will not bring enforcement actions against employers for violations of the FFCRA prior to April 17, 2020, provided that the employer has made reasonable, good faith efforts to comply with the Act.
- New Guidance from the DOL on Administering FFCRA Leaves
- Leaves are not available to employees with reduced hours, furloughed employees, or employees whose workplaces are closed.
- These leaves are not available to employees whose workplaces are closed due to a federal, state, or local shelter-in-place or stay-at-home orders, or due to business slowdowns.
- These leaves (and payroll tax credit) are not retroactive. Employees are not entitled to pay under these leaves if they were absent or out of work (for any reason) prior to April 1.
- Both emergency paid sick leave (EPSL) and emergency Family and Medical Leave (EFMLA) can be taken on an intermittent basis in certain situations.
- Employees may not be required to use other forms of paid leave prior to or concurrently with EPSL or EFMLA.
- Employers should keep documentation to show that employees who received leave were actually in need of leave. The documentation requirements will be outlined in soon-to-be-released IRS guidance.
As the world seeks to stop the spread of coronavirus (COVID-19), businesses like yours are working diligently to remain in operation, adapt their policies, and ensure the safety of their employees. Netchex is here to help you accomplish all of this and more.