Coronavirus Relief Bill Guide

What this page covers:

Guide to The Families First Coronavirus Response Act (FFCRA) – H.R. 6

(https://www.congress.gov/bill/116th-congress/house-bill/6201/text)

  • The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.
    • FFRCA is NOT retroactive
  • There are two protections, or rather, benefit carve-outs for eligible employees under FFCRA:
    • (1) Emergency Paid Sick Leave Act (“Emergency Paid Sick Leave”); and
    • (2) Emergency Family and Medical Leave Expansion Act (“FMLA Expansion”)
  • FFCRA (and the Emergency Paid Sick Leave and FMLA Expansion) apply to employers with fewer than 500 employees.
    • Small business exemption: If providing child care-related paid sick leave and expanded family and medical leave at a business with fewer than 50 employees would jeopardize the viability of the business as a going concern
      • To elect this small business exemption, the employer should document why its business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.
      • We are still awaiting forthcoming regulations that will provide greater clarity. But for now DOL is saying that businesses with fewer than 50 employees may “elect this small business exemption” by documenting that their viability would be jeopardized by providing paid leave. This likely requires documentation that the business lacks sufficient cash-flow to meet these obligations notwithstanding the fact that employer may claim tax credits.

 

FMLA Expansion:

  • FMLA Expansion (covered by Division C of the FFCRA):
    • Eligible employees may take FMLA leave for a “qualifying need related to a public health emergency,” which means that the employee is unable to work (or telework) in order to care for the employee’s own son or daughter under 18 years old because the child’s school or place of care has been closed or the child care provider of the child is unavailable, due to a public health emergency.
      • To be eligible, an employee must have been employed for at least 30 calendar days by the employer.
        • NOTE: which is significant reduction in working time required for benefits from the 1-year /1,250 hour requirement in the pre-amended FMLA.
        • NOTE: FMLA usually applies only to companies with 50 or more employees; however, under the FFCRA, paid FMLA leave requirements apply to small employers unless they qualify for an exemption.
      • In other words: Any employee who has worked for at least 30 days is entitled to take job protected FMLA leave to care for a child when their school or daycare is closed as a result of the COVID-19 pandemic.
  • The first 10 days of the leave are unpaid; however, during that period, employees may utilize any employer-provided sick leave balances that they have. (They also may use the sick leave entitlement provided under the Emergency Paid Sick Leave). After that 10-day period, the employer will have to pay the employee at least 2/3 the employee’s regular rate of pay for the hours the employee was or would have been normally scheduled to work.
    • There is a cap. An employee cannot receive more than $200 a day or $10,000 in the aggregate for the entire duration of the leave.
  • Employers are required to restore employees to their original positions, with the exception of employers with fewer than 25 employees in certain circumstances. For employers with fewer than 25 employees, if the employee’s position no longer exists due to economic conditions or other changes in the operating conditions of the employer that affect employment, and that are caused by a public health emergency during the period of leave, then they do not have to restore the employee’s employment. However, the employer must make reasonable efforts to restore the employee to an equivalent position.
  • An employer cannot require employees to substitute other leave. But an employer may offer the employee the option to substitute any accrued vacation leave, personal leave or other leave for the unpaid leave portion of the allowance, which, in application, could mean that during the 10-day waiting period, the employee could receive full wages as opposed to the 2/3 benefit amount.
  • If the employee’s need for leave is foreseeable, the employee must provide as much notice as possible.

 

Emergency Paid Sick Leave:

  • The Emergency Paid Sick Leave is provided for in Division E of the FFCRA. It states that employers must provide paid sick time immediately (as opposed to the 10-day waiting period in the FMLA Expansion) to an employee if the employee is unable to work (or telework) because of one of the following reasons:
    • The employee is subject to a 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 concerns related to COVID-19.
    • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
    • The employee is caring for an individual subject to a local quarantine or isolation order or who has been advised by a health care provider to self-quarantine.
    • The employee is caring for the employee’s child if the child’s school or childcare provider has been closed or is unavailable due to COVID-19 precautions.
  • Full-time employees are entitled to up to 80 hours of paid sick time, and part-time employees are entitled to a number of paid sick time hours equal to the number of hours that the employee ordinarily works, on average, during a 2-week period.
  • Paid sick time is immediately available for use, regardless of how long the employee has worked for the employer.
  • The Emergency Paid Sick Leave includes an express provision that 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 the Emergency Paid Sick Leave. An employer may not deny an employee paid sick leave even if the employer gave the employee paid leave for a reason identified in the Emergency Paid Sick Leave prior to the Act going into effect.
  • The Emergency Paid Sick Leave imposes a new leave requirement on employers that is effective beginning on April 1, 2020.
  • The sick leave provided under The Emergency Paid Sick Leave does not carry over from year to year, and unused paid sick time is not payable upon separation from employment.
  • The employer may require employees to follow reasonable notice procedures to continue to receive paid sick time.
  • The employer may not discriminate or retaliate against the employee for taking leave under the Emergency Sick Leave.
  • The penalty for failure to pay sick time under the Emergency Sick Leave is considered failure to pay minimum wage under the Fair Labor Standards Act, which would include liquidated damages of two-times the amount owed and attorneys’ fees.
  • NOTE: These requirements are subject to 30-day non-enforcement period for good faith compliance efforts. “Department of Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the act. Under this policy, Department of Labor will not bring an enforcement action against any employer for violations of the act so long as the employer has acted reasonably and in good faith to comply with the act. The Department of Labor will instead focus on compliance assistance during the 30-day period.” (https://www.dol.gov/newsroom/releases/osec/osec20200320)
  • Employee Notice: All businesses covered by The Emergency Paid Sick Leave are required to postthis notice, even if you are a small business owner.
    • Employers may satisfy the notice requirements of the law by emailing or direct mailing the notice to employees, or posting the notice on an employee information internal or external website. Since the law only applies to current employees, the notice does not have to be shared with laid-off individuals.
    • Employers can obtain the notices free of charge by contacting DOL’s Wage and Hour Division at 1-866-4-USWAGE (1-866-487-9243) or an employer can download and print the notice yourself.
  • Small Business Exemption: “Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. The Department of Labor will provide emergency guidance and rulemaking to clearly articulate this standard.” (release dated March 20, 2020:https://www.dol.gov/newsroom/releases/osec/osec20200320)
  • The U.S. Department of Labor will issue more details on the small business exemption soon. But employers wishing to seek the exemption should, at this time, document why their business meets such criteria.

 

Pay under the Emergency Paid Sick Leave & FMLA Expansion:

  • Calculation of the Number of Hours:
    • The FMLA Expansion requires an employer to pay an employee for hours the employee would have been normally scheduled to work even if that is more than 40 hours in a week.
    • However, the Emergency Paid Sick Leave requires that paid sick leave be paid only up to 80 hours over a two-week period. For example, an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week. In any event, the total number of hours paid under the Emergency Paid Sick Leave is capped at 80.
    • A part-time employee is entitled to leave for his or her average number of work hours in a two-week period. Therefore, an employer calculates hours of leave based on the number of hours the employee is normally scheduled to work. Such a part-time employee may take paid sick leave for this number of hours per day for up to a two-week period, and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that.
  • Calculation of the Amount of Pay:
    • The amount of pay for an employee while taking paid sick leave or expanded family and medical leave under the FFCRA, depends on the employee’s normal schedule as well as why he/she is taking leave.

Paid Sick Leave:

  • If the employee is taking paid sick leave because he/she is unable to work or telework due to a need for leave because the employee (1) is subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) are experiencing symptoms of COVID-19 and are seeking medical diagnosis, the employee will receive for each applicable hour the greater of:
  • His/her regular rate of pay,
  • the federal minimum wage in effect under the FLSA, or
  • the applicable State or local minimum wage.

In these circumstances, the employee is entitled to a maximum of $511 per day, or $5,110 total over the entire paid sick leave period.

  • If the employee is taking paid sick leave because he/she is: (1) caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (2) caring for his/her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; or (3) experiencing any other substantially-similar condition that may arise, as specified by the Secretary of Health and Human Services, the employee is entitled to compensation at 2/3 of the greater of the amounts above.

Under these circumstances, the employee is subject to a maximum of $200 per day, or $2,000 over the entire two week period.

FMLA Expansion:

  • If the employee is taking expanded family and medical leave, he/she may take paid sick leave for the first ten days of that leave period, or the employee may substitute any accrued vacation leave, personal leave, or medical or sick leave he/she has under the employer’s policy. For the following ten weeks, the employee will be paid for his/her leave at an amount no less than 2/3 of the employee’s regular rate of payfor the hours the employee would be normally scheduled to work. The regular rate of pay used to calculate this amount must be at or above the federal minimum wage, or the applicable state or local minimum wage. However, the employee will not receive more than $200 per day or $12,000 for the twelve weeks that include both paid sick leave and expanded family and medical leave when the employee is on leave to care for his/her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons.

 

Interaction of Emergency Paid Sick Leave & FMLA Expansion:

  • If an employee is at home with his/her child because his or her school or place of care is closed, or child care provider is unavailable, does the employee get paid sick leave, expanded family and medical leave, or both?
  • The employee may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. The employee may take both paid sick leave and expanded family and medical leave to care for his/her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons. The Emergency Paid Sick Leave provides for an initial two weeks of paid leave. This period thus covers the first ten workdays of expanded family and medical leave, which are otherwise unpaid under the Emergency and Family Medical Leave Expansion Act unless the employee elects to use existing vacation, personal, or medical or sick leave under the employer’s policy. After the first ten workdays have elapsed, the employee will receive 2/3 of the employee’s regular rate of pay for the hours the employee would have been scheduled to work in the subsequent ten weeks under the Emergency and Family Medical Leave Expansion Act.
  • NOTE: an employee can only receive the additional ten weeks of expanded family and medical leave under the FMLA Expansion for leave to care for his/her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons.

 

Reimbursement of Employers for Payments to Employees under these Acts:

  • Division G provides for tax credits for paid sick leave and paid FMLA and provides that an employer will be allowed a tax credit against the employer’s excise tax.
  • “Employers will receive 100% reimbursement for paid leave pursuant to the FFCRA. Health insurance costs are also included in the credit. Additionally, employers face no payroll tax liability.
  • Reimbursement will be quick and easy to obtain. An immediate dollar-for-dollar tax offset against payroll taxes will be provided. Where a refund is owed, the IRS will send the refund as quickly as possible.
  • To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released the week of March 23rd.
  • When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941series) with the IRS.
  • Under guidance that will be released next week (the week of March 23rd), eligible employers who pay qualifying sick or child-care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child-care leave that they paid, rather than deposit them with the IRS.
  • The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes and the employer share of Social Security and Medicare taxes with respect to all employees.
  • If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week (the week of March 23rd).

 

Examples:

  • If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
  • If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments, and file a request for an accelerated credit for the remaining $2,000.
  • Equivalent child-care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.” (https://www.dol.gov/newsroom/releases/osec/osec20200320)

**Information above obtained from: (https://www.dol.gov/agencies/whd/pandemic/ffcra-questions)

 

Examples:

Hourly Employee Example

An employee’s child’s school has been shut down by government closure since March 16, 2020 and the employee, who earns $18 an hour and regularly works 8 hours a day and 40 hours a week, took off work that day to care for the employee’s under 18-year-old daughter. The FFCRA becomes effective April 1, 2020. The employee’s 10-day unpaid leave period is from April 1, 2020 through April 11, 2020. During this time, the employee complies with all eligibility requirements under the Emergency Paid Sick Leave and the business is not an employer with fewer than 50 employees that has been approved for an exemption for these employees, and eligible to receive 7 workdays of pay during that time period / 8 hours a day (assuming the employee was scheduled to work weekdays only) for a total of 56 hours and $672 (at the employee’s 2/3 hourly rate). As of April 12, 2020, the employee also would be eligible for the FMLA Expansion, but would have 24 hours remaining under the Emergency Paid Sick Leave Act. Employee would use remaining 24 hours of Emergency Sick Leave through April 14, 2020 and, beginning, April 15, 2020, be eligible for the 2/3 rate under the FMLA Expansion, which would continue for up to $200 a day / $10,000 in total benefit.

In the event the business is a small employer with fewer than 50 employees and properly applies for and received an exemption under the Emergency Sick Leave (assuming that the Secretary of Labor allows it), the employee (so long as employed by the employer for 30 days and off work due to a child’s school closure or impossibility) would not be entitled to any compensation until eligible under the FMLA Expansion as the Emergency Sick Leave would not be available.

Salaried Employee Example

Using the same dates, but changing the scenario using a salaried employee who earns a $60,000 annual salary, beginning April 14, 2020, the employer would pay the employee $153.84 a day (the employee’s regular rate would be $28.85 and 2/3 that rate for 8 hours a day would be $153.84). If the child’s school (would be different if the leave is for a child care impossibility) is closed until the end of the school year, May 29, 2020, the employer would be responsible for paying the employee for 34 days, for a total of $5,230.56.”

(https://www.jdsupra.com/legalnews/employers-top-ten-10-burning-questions-65826/)

 

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