What you need to know about the Families First Coronavirus Response Act (FFCRA)

COVID-19 TASK FORCE ALERT

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What is it?

The Families First Coronavirus Response Act (FFCRA), which the President signed on March 18, 2020, is emergency legislation intended to help employers maintain payrolls and not shoulder the burden of doing so in this crisis.

What does it do?

The FFCRA vastly expands areas of Paid Sick Leave and the Family Medical Leave Act (FMLA) as set forth below. These provisions are potentially onerous and expensive! However, employers covered by these new laws will receive tax credits to cover 100% of the actual expense they incur within the maximum leave pay caps set forth below. If the tax credits exceed the employer’s actual tax liability, the employer will receive a refund of the difference. So, although employers should receive back the expenses incurred in paying these leave benefits, incurring these expenses up front could create cash flow difficulties for employers in an already challenging business environment. Be on the lookout for our upcoming article on how the tax credits will work.

Who does it apply to?

These provisions apply only to employers with fewer than 500 employees (which, under the original FMLA is calculated based on the number of full and part-time employees in 20 or more workweeks in the current or previous calendar year). However, employers of fewer than 50 employees may be exempted if providing the leave would jeopardize the viability of the business. The Department of Labor is expected to provide further guidance on this exemption standard.

When does it apply?

The effective dates of these provisions are from April 1, 2020 through December 31, 2020.

What are the specifics?

It has two main components: Emergency Paid Sick Leave and Emergency Family Medical Leave. Both are detailed below:

Emergency Paid Sick Leave Act (EPSLA):

Qualifying reasons for paid sick leave: A covered employer must provide to each employee paid sick leave time to the extent that the employee is unable to work (or telework) due to a need for leave because:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to a 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.
  5. The employee is caring for their own child if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions.
  6. The employee 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.

Eligibility: All employees of a covered employer that meet the qualifying reasons above are eligible to use this leave, regardless of how long they have been employed.

Amount and payment of sick leave:

  • Full-time employees receive up to 80 hours of paid sick leave at the employer’s regular rate of pay if any of the qualifying reasons (1), (2) or (3) above apply, or 2/3 of the regular rate if qualifying reasons (4), (5) or (6) above apply.
  • Part-time employees receive paid sick leave hours equal to the number of hours that such employee works, on average, over a 2-week period.
  • Maximum pay caps: The amount of sick leave to be paid is capped at $511 per day (up to $5110 total per employee) for qualifying reasons (1), (2) or (3), or $200 per day (up to $2000 total per employee) for qualifying reasons (4), (5) or (6).
  • Calculating the pay rate: The regular rate of pay is calculated per the Fair Labor Standards Act (but no less than the highest applicable minimum wage). For a part-time employee whose schedule varies from week to week to such an extent that the employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken paid sick time, the regular rate of pay is based on the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time, including hours for which the employee took leave of any type. The Secretary of Labor is tasked with issuing guidelines to assist employers in calculating the amount of paid sick time no later than April 1, 2020.

Timing of paid sick leave and other terms:

  • The paid sick leave is available for immediate use by the employee for the purposes described above, regardless of how long the employee has been employed.
  • End of sick leave- Paid sick leave provided to an employee under this Act will cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for paid sick leave.
  • Paid sick leave time does not carry over from one year to the next and is provided in addition to any paid sick leave that the employer already provides, like state-mandated or local sick leave.
  • An employer may not require, as a condition of providing paid sick time under this Act, that the employee involved search for or find a replacement employee to cover the hours during which the employee is using paid sick time.
  • An employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time under this Act.
  • The employee should give reasonable notice of the need to take the leave, if practicable.
  • Employers are required to post, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, to be prepared or approved by the Secretary of Labor, of the requirements described in this Act. Not later than 7 days after the date of enactment of this Act (i.e., March 25, 2020), the Secretary of Labor shall make publicly available a model of a notice that meets the requirements of this Act.

Emergency Family and Medical Leave Act (EFMLA): (limited to leave to care for a child based on school closures and the like)

Coverage/eligibility: Like the EPSLA, employers with fewer than 500 employees are covered under this Act, even employers who were not otherwise covered under the original FMLA. Additionally, the universe of eligible employees is expanded to those who were employed with the employer for at least 30 days prior to the start of the leave (compared to one year for the typical FMLA claim. This is a significant expansion of covered employers and employees over those covered by the original FMLA. Employers of fewer than 50 employees may be exempted if providing the leave would jeopardize the viability of the business. The Department of Labor has indicated that this exemption will be available “on the basis of simple and clear criteria” that involves jeopardy to the viability of an employer’s business as a going concern. The Department of Labor has promised further guidance and rulemaking to clearly articulate this standard.

Qualifying reasons for Emergency Family and Medical Leave: This leave is provided to an employee who is unable to work (or telework) due to a need for leave to care for a child under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of the employee’s child is unavailable, due to a public health emergency. The employee should give reasonable notice of the need to take the leave, if practicable.

Amount and payment under EFMLA:

  • Covered employees may take up to 12-weeks of job-protected leave as needed for the qualifying reason.
  • The first 10 days of the leave may be unpaid, but during this 10-day period, the employee may elect to use any accrued paid leave (such as sick leave under EPSLA or other paid sick leave, vacation or PTO).
  • After the 10-day waiting period, employees are entitled to 2/3 of the employee’s regular rate of pay for the number of hours the employee would otherwise be scheduled to work. This amount of pay is capped at $200 per day and an aggregate of $10,000 per employee, meaning the leave can be used for up to 10 weeks.
  • In the case of an employee whose schedule varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken leave, the calculation of pay is based on the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type.

Reinstatement rights:

  • For employers with 25 or more employees, the employee has the same reinstatement rights to the same or equivalent position as are provided per the original FMLA.
  • For employers with fewer than 25 employees, the original FMLA reinstatement rights do not apply IF:
    • the position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment;
    • the non-existence of the position is caused by a public health emergency during the period of leave;
    • the employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment;
    • if the reasonable efforts of the employer described above fail, the employer makes reasonable efforts to contact the employee if a position with equivalent employment benefits, pay, and other terms and conditions of employment becomes available, and if such contact occurs within the 1-year period beginning on the earlier of: the date on which the qualifying need related to a public health emergency concludes; or the date that is 12 weeks after the date on which the employee’s leave commences.

Of course, many questions remain such as to what extent related entities can aggregate their headcount to reach the 500 employee limit, or to what extent local social distancing orders fall within the definition of “quarantine or isolation order” that qualifies employees for the paid sick leave. Employers will be looking to the Department of Labor for further clarification and guidance. We will continue to update you. If you have questions about any of this, please view our FAQ or call one of Scali Rasmussen’s labor and employment attorneys.