New Guidance relating to The Families First Coronavirus Response Act
The U.S. Department of Labor (“DOL”) has published its interpretation of employees’ paid leave rights under the Families First Coronavirus Response Act. It can be found at: https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave. While the DOL interpretation is not the last word, it is often a safe harbor for businesses to follow and is given a measure of deference by the Courts. The DOL’s interpretation of the Act is consistent with our own (as detailed below), but also interprets the Act to require a covered employer to provide, beyond the initial two weeks (up to 80 hours) of paid sick leave, the following:
- Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
Due to the school closings across the state, this could cover a significant number of employees. However, note that all of the exceptions for large and small businesses listed below still apply, and employers are expected to be reimbursed for these expenses via a refundable tax credit.
In addition, the DOL made clear that where leave is foreseeable, an employee should provide notice of leave to the employer as is practicable. After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving paid sick time.
It appears that the DOL may require employers with less than 50 employees and who believe that the sick leave requirements will jeopardize the viability of the business as a going concern, apply for an exemption for the law, and may limit the exemption to only the requirement to provide paid leave due to school closings or child care unavailability.
Finally, on March 25th, the Senate passed another stimulus bill that likely has additional employer mandates. We will update our blog when those changes become clear. The crisis and the responses from the federal, state and local governments change rapidly such that you should contact us before taking any action.
The Families First Coronavirus Response Act provides:
• Emergency FMLA leave.
• Paid sick leave.
• Enhanced unemployment insurance.
• Additional funding for nutritional programs.
• Protections for health care workers and employees responsible for cleaning at-risk places.
• Additional federal funds for Medicaid.
• Free coronavirus testing.
The President signed the FFCRA Act (H.R. 6201) on the evening of March 18, 2020, which means the leave provisions will go into effect on April 2, 2020.
Large and Small Business Exceptions
The Emergency FMLA applies to employers with fewer than 500 employees, unlike the original FMLA which applies to Employers with 50 or more employees. It also lowers the eligibility requirement such that any employee who has worked for the employer for at least 30 days prior to the designated leave may be eligible to receive paid family and medical leave.
Importantly, the Act exempts small businesses with fewer than 50 employees if the required leave would “jeopardize the viability of their business.” The exemption applies to the paid family and sick leave described below.
The Act also includes language allowing the Secretary of Labor to exclude healthcare providers and emergency responders from the definition of employees who are allowed to take such leave.
Paid Family Leave
Any individual employed for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave to allow care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency. This is now the only qualifying need for Emergency FMLA. The first 10 days of Emergency FMLA leave may be unpaid. Payments will be capped at $200 a day (or $10,000 total) and expire at the end of the year.
During the first 10-day period, an employee may elect to substitute any accrued paid leave (like vacation or sick leave) to cover some or all of the 10-day unpaid period. After the 10-day period, the employer generally must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.
Job Restoration After FMLA Leave
Employers with 25 or more employees will have the same obligation as under traditional FMLA to return any employee who has taken Emergency FMLA to the same equivalent position upon the return to work. However, employers with fewer than 25 employees are generally excluded from this requirement if the employee’s position no longer exists following the Emergency FMLA leave due to an economic downturn or other circumstances caused by a public health emergency during the period of Emergency FMLA. This exclusion is subject to the employer making reasonable attempts to return the employee to an equivalent position and requires an employer to make efforts to return the employee to work for up to a year following the employee’s leave.
Paid Sick Leave
The Act provides that many employers with less than 500 employees will have to provide 80 hours of paid-sick-leave benefits if the employee is: (1) subject to a federal, state or local quarantine or isolation order related to COVID-19; (2) advised by a health care provider to self-quarantine due to COVID-19 concerns; (3) experiencing COVID-19 symptoms and seeking medical diagnosis; (4) 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; (5) caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or (6) 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.
This provision requires paid sick leave to be paid at the employee’s regular rate (or two-thirds the employee’s regular rate to care for qualifying reasons 4, 5, or 6 listed above). The benefits will be capped at $511 a day, up to $5,100 total, for a worker’s own care, and $200 a day, up to $2,000 total, when the employee is caring for someone else.
Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work over a two-week period.
Note that a business is required, at the request of the employee, to pay a full-time employee for 80 hours of mandated emergency paid sick leave instead of the initial 10 days of unpaid leave permitted by the Emergency FMLA Act
This benefit will also expire at the end of 2020 and will not carry over into the following year.
Benefits for Employers
Covered employers that are required to offer emergency FMLA or paid sick leave will be eligible for refundable tax credits. Gig-workers and other self-employed workers will be eligible for a tax credit to cover the benefits. These tax credits will be allowed against the employer portion of Social Security taxes. While this limits application of the tax credit, employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe. Specifically, employers will be entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter in adherence with the Emergency Paid Sick Leave Act. Similarly, employers will be entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the Emergency FMLA Act. Only those employers who are required to offer Emergency FMLA and Emergency Paid Sick Leave may receive these credits.
If you have questions or would like to discuss COVID-19 concerns, please contact Attorney Michael P. Doherty, Attorney Andrew M. Kepple, Attorney Gabriel W. Bell, or one of our other employment attorneys at 508-541-3000.
This blog is for informational purposes only. It should not be considered legal advice. All those who read this blog should seek the advice of a professional before taking action based upon any information provided herein.
© 2020 Doherty, Dugan, Cannon, Raymond & Weil, P.C.
Article by Attorney Michael P. Doherty
Attorney Michael P. Doherty represents organizations and individuals in business, succession planning and litigation matters, and also assists clients with estate planning, wills and trusts.
124 Grove Street, Suite 220
Franklin, MA 02038
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