Families First Coronavirus Response Act

CONGRESS PASSES PAID SICK LEAVE LEGISLATION IN RESPONSE TO CORONAVIRUS PANDEMIC

Families First Coronavirus Response Act (FFCRA)

Summary of the FFCRA

A new federal law requiring paid sick leave related to the coronavirus pandemic signed into law on March 18, 2020 and will take effect on April 2, 2020.

The FFCRA mainly affects employers through two separate laws that accommodate employees affected by coronavirus: one amending the Family Medical Leave Act (FMLA), and another implementing a new Emergency Paid Sick Leave Act. Employer costs will be offset by a quarterly credit against employment tax.

Covered Employers

Most employers with fewer than 500 employees will be affected.

  • Employers with fewer than 500 employees are covered by the FFCRA.
    • The FMLA amendment will affect employers with fewer than 50 employees who were not subject to FMLA before but will not subject them to regular FMLA terms.
    • The FFCRA allows the Department of Labor to exempt small businesses from the new laws if they have fewer than 50 employees and complying with the laws would jeopardize the business.
  • Employers who are health care providers and emergency responders may elect not to extend the FFCRA benefits to their employees.
  • The Paid Sick Leave Act relies on definitions from the Fair Labor Standards Act (FLSA), but the definition of employer also includes “any person acting directly or indirectly in the interest of an employer in relation to an employee,” which creates the possibility of personal liability for violations of this provision of the FFCRA.
Covered Employees

Virtually all employees will be eligible for some paid sick leave related to the pandemic.

  • FMLA: Employees who have worked for at least 30 days are eligible for amended FMLA benefits. This includes far more employees than the regular FMLA rule and includes part time workers.
  • Paid Sick Leave Act: All employees, regardless of length of service, are eligible for paid sick leave.
Benefits

Full time employees will be eligible for 80 hours of pay under the Paid Sick Leave Act (which will generally overlap with 10 days of unpaid leave under the amended FMLA), then some employees will be qualify for two-thirds pay under the amended FMLA.

  • FMLA
    • Unpaid Leave. Under the FMLA amendment, qualified employees are entitled to 10 days of unpaid leave for the following reason:
      • They are unable to work (or telework) because of a need to care for the employee’s child under 18 years of age due to school closing, daycare closing, or unavailability of a childcare provider, as a result of the public health emergency.
    • 2/3rds Paid Leave. After 10 days of unpaid FMLA leave, employees are entitled to two-thirds pay for days off, if they still need qualified leave.
      • Pay rates are calculated on the employee’s FLSA regular rate of pay, for the employee’s regularly scheduled hours.
      • Paid leave is capped at $200 per day, with a total of $10,000 for each employee.
    • Employers with fewer than 25 employees do not have to restore employees to their jobs if the employee’s job is affected or eliminated due to the pandemic, provided the employer must make reasonable efforts to restore the employee to an equivalent job, if available.
  • Paid Sick Leave Act
    • Employees receive paid sick time for the following reasons:
      • Employee is entitled to full pay ($511 per day/$5,110 total limit per employee):
        • Employee is subject to a government quarantine or isolation order;
        • Employee has been advised by a health care provider to self-quarantine due to COVID-19 related concerns;
        • Employee has COVID-19 symptoms and is seeking a diagnosis.
      • Employee is entitled to two-thirds pay ($200 per day/$2,000 total limit per employee):
        • Employee is caring for an individual who is subject to a quarantine order or who is self-quarantined as advised by a health care provider;
        • Employee is caring for the employee’s son or daughter because school is closed, daycare is closed, or childcare provider is unavailable because of COVID-19 precautions;
        • Employee is subject to conditions specified by HHS.
      • Sick leave limit is 80 hours for full-time employees; the limit for part time employees is prorated to the employee’s average work schedule over 2 weeks.
      • The benefits under the FFCRA do not carry over year to year. The employer may not require the employee to find a replacement for FFCRA sick leave. The employer may not require the employee to use other time off before taking FFCRA sick leave. Employers may not retaliate against employees who exercise rights under the FFCRA. Violations of the Paid Sick Leave Act will be treated as FLSA violations.
      • The DOL will provide a mandatory workplace poster for the Paid Sick Leave Act.

Tax Credit

  • Employers will be allowed an employment tax credit for 100% of qualified sick leave wages paid during each quarter. If the employer does not have enough tax liability to cover the payments, the difference will be treated as an overpayment to be refunded.
  • Payments to maintain group health coverage and excluded from employee gross income are also reimbursed in the tax credit.
  • Sick leave wages are not treated as wages; employers may not take a deduction for amounts subject to tax credit.
  • Employers may opt out of the tax credit.
  • Qualified self-employed workers are also qualified to take sick leave and will be eligible for the tax credit, provided they meet the criteria to be established by the Treasury.
  • Social security and Medicare contribution shortfalls caused by the tax credit will be made up from the general fund.