The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave for specified reasons related to COVID-19. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the April 2, 2020 effective date through December 31, 2020.
WHO DOES THIS APPLY TO?
Applies to employers, including government employers, with fewer than 500 employees. The Act reserves the right for the Secretary of Labor to exclude certain health care providers and first responders and to exempt certain small businesses with fewer than 50 employees if business viability is in jeopardy.
WHO IS ELIGIBLE?
Paid sick time is immediately available for everyone and may be taken for any of the following 6 reasons if the employee is unable to work (or unable to telework) due to a need for leave because:
The employee is subject to 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 due to a COVID-19 concern.
The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis.
The employee is caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns.
The employee is caring for a son or daughter (under the age of 18) when the school or childcare provider has closed or ceased operations due to COVID-19 precautions.
The employee is experiencing any other substantially similar condition specified by the Secretary of Health. Note: Paid sick time may be paid at two-thirds of the employee’s regular rate if taken for the items 4-6 above and tax credit cannot exceed $200 per day for up to 10 days.
HOW MUCH TO PAY THEM? HOW LONG?
For reasons (1)-(4) and (6): A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.
For reason (5): A full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
Calculation of Pay:
For leave reasons (1), (2), or (3): employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
For leave reasons (4) or (6): employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
For leave reason (5): employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave)
Employers will receive a dollar for dollar credit (up to the allowable limits) for wages paid against the employer’s portion of Social Security taxes. Employers will also receive credits for health care premium costs. Please seek guidance from your accounting professional relative to taking advantage of all appropriate tax credits resulting from COVID-19.
HOW YOU BENEFIT AS AN EMPLOYER: PAYROLL TAX CREDIT |HEALTH INSURANCE
Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. For more information, please see the Department of the Treasury’s website.
OTHER CONSIDERATIONS
Employers may not require employee to find a “replacement employee” to cover the hours during which the employee is using paid sick time.
Local sick or paid sick leave requirements may still be in force in given cities, states or communities.
POSTING REQUIREMENTS
Employers need to post the notice prepared and approved by the Secretary of Labor.
RETALIATION
It is against the law for any employer to discharge, discipline or in any other manner discriminate against any employee who takes leave in accordance with this Act or has filed any complaint or instituted or cause to be instituted any proceeding under or related to this Act.
CAN I ASK AN EMPLOYEE TO WORK REMOTELY RATHER THAN BE OUT ON EMERGENCY PAID SICK LEAVE?
A conversation can be held with the employee to identify scheduling options for working remotely.
DOES THE EMERGENCY PAID SICK LEAVE PORTION COVER SOMEONE THAT IS CONCERNED ABOUT CONTRACTING THE DISEASE?
Only if there is a documented autoimmune disorder or condition where a physician recommends quarantine or self-isolation.
DO EMPLOYERS HAVE TO CONTINUE EMPLOYEE BENEFIT COVERAGE IF THEY ARE OUT ON EMERGENCY PAID SICK LEAVE?
Yes, the employee would still be considered benefit eligible. This would also be an expense that can be claimed as a tax credit.
IS CARRYOVER REQUIRED FOR UNUSED EMERGENCY PAID SICK LEAVE?
The emergency paid sick leave provisions state that unused paid sick leave does not carry over from one year to the next. So, for example, if an employee didn’t use it this year, but wants to use it next year, the program doesn’t carry over. Right now, the program is in effect until 12/31/2020.
MUST AN EMPLOYER PAY OUT UNUSED EMERGENCY PAID SICK LEAVE IF THE EMPLOYEE SEPARATES FROM ITS EMPLOYMENT?
An employer is not required to pay unused paid sick leave if an employee separates from employment.
IF A COMPANY DECIDES TO SHUT DOWN TEMPORARILY, WILL EMERGENCY PAID SICK LEAVE STILL BE REQUIRED?
It depends – if the Company shuts down prior to April 2. If the Company shuts down after April 2, with fewer than 50 employees, the Company may be able to apply for an exemption. With a shut down, the employees would be considered eligible for Unemployment Benefits. Benefit providers may allow for additional exceptions in the near future for employers to continue paying for benefit coverage.
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