On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”), emergency legislation that imposes upon employers both paid family leave and new paid sick leave obligations. The measure will have a major impact on employers with fewer than 500 employees.
Expanded Family Medical Leave Act Coverage
The legislation amends and expands the Family Medical Leave Act, and applies more broadly to all employers with fewer than 500 employees. The new statute also expands coverage to reach all employees who have worked at least 30 days for the employer. The paid leave is available where the employee “is unable to work due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”
This first 10 days of the emergency FMLA leave period are unpaid. Thereafter, the emergency FMLA is a paid leave equal to two-thirds of the employee’s regular rate of pay for their normal number of scheduled work hours. However, this amount is capped at $200 per day and $10,000 in the aggregate. The new leave provisions are only intended to cover public health emergencies related to the COVID-19 coronavirus, and will expire on December 31, 2020.
Employees that take emergency FMLA leave are entitled to reinstatement. But, employers with fewer than 25 employees do not have to reinstate an employee if the position held by the employee at the time the leave commenced no longer exists due to economic conditions or changes of operation caused by the public health emergency. In such cases, the employer is required to make a reasonable effort to restore the employee to an equivalent position with equivalent pay, benefits and other conditions of employment. If the employee still cannot be restored to work, then the employer has an obligation to offer the employee a position within a year ending the earlier of (1) 12 weeks after the leave commenced; or (2) 12 months after the end of the public health emergency. Health care providers and emergency responders may elect to exclude such employees from the application of the emergency FMLA.
Emergency Paid Sick Leave
The FFCRA also contains separate provisions that require mandatory paid sick leave for employees who are unable to work (or telework) due to:
- A governmental quarantine or isolation order related to COVID-19;
- Advice from a health care provider to self-quarantine due to concerns related to COVID-19;
- Employee’s experiencing symptoms of coronavirus seeking medical advice;
- A need to care for or assist an individual who:
- Is subject to a governmental quarantine related to COVID-19;
- Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- A need to care for a child whose school or place of childcare is closed or unavailable due to coronavirus.
Employers with fewer than 500 employees are required to provide up to 80 hours of paid sick leave for full time employees and for part-time employees an amount equal to the to the number of hours the employee works on average over a two-week period. There is no carry over right. Moreover, an employer may not require that employees use other paid leave time prior to using the emergency paid sick time.
Employers of health care providers and emergency responders may elect to exclude such employees from the application of the paid sick leave.
The new paid sick leave provisions also will expire on December 31, 2020.
Refundable Tax Credits
Employers may offset these paid leave expenses through a refundable tax credit taken against employment taxes. The credits are limited up to $200 per day for up to 10 days for each employee who takes the mandated paid sick leave unless the sick leave was for the employee’s own covered quarantine or isolation or for the time for the employee to receive his or her own diagnosis. In such cases the limitation is up to $511 per day.