To Our Clients and Partners –
The COVID-19 pandemic continues to rock the legal landscape with unprecedented challenges to the workforce and a panoply of new and shifting laws and regulations affecting employers. The latest sea change in employment law, the Family First Coronavirus Response Act (FFCRA), outlines new requirements for Emergency Paid Sick Leave and Emergency Family Leave under the Family and Medical Leave Act (FMLA). As of April 1, 2020, the new laws will have an immediate impact on businesses with fewer than 500 employees, including significant new requirements for paid leave as well as refundable tax credits for employers who are required to offer those benefits under the bill.
Which Companies Are Affected by the New Law?
The FFCRA applies to:
- Business with 499 or fewer employees;
- Covered public sector employers of any size.
Companies with fewer than 50 employees may be able to obtain an exemption from the Secretary of Labor if they can demonstrate that the requirements of the paid leave mandate would jeopardize the viability of the business.
Businesses whose primary purpose is to provide health care workers and/or emergency responders may also be considered for exemption.
Do you need more information about whether you may qualify for an exemption? Contact us.
How Are Employees Counted?
In calculating workforce size, private sector employers should count:
- Full-time and part-time employees within the United States;
- Employees on leave;
- Temporary employees who may have other employment contracts with different employers; and
- Day laborers supplied by temp. agencies (regardless of whether the employer is the temporary agency or the client firm).
- Workers who are independent contractors under the Fair Labor Standards Act (FLSA) are not considered employees.
Additional considerations in calculating the number of employees extend to corporations with ownership interests in other corporations.
Not sure whether your business falls within the parameters of the <499 threshold? We can advise you on how to make an accurate, current employee count.
Which Benefits Am I Required to Provide?
Under the terms of the FFCRA, qualifying businesses are required to provide new benefits for:
- Emergency Paid Sick Leave (EPSL)
- Emergency Family Leave under the Family and Medical Leave Act (FMLA)
- Emergency Paid Sick Leave
Who is Covered
Effective April 1, 2020, the FFCRA requires qualifying employers to provide up to 80 hours of paid sick time to an employee who is unable to work or telework because:
- 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 because of COVID-19;
- The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- The employee is caring for an individual subject or advised to quarantine or self-isolate;
- The employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
- The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Unlike the emergency FMLA requirements, an employee is immediately eligible for this leave (there is no 30-day-on-payroll requirement). Part-time employees are entitled to a total number of hours of leave equivalent to their average number of work hours in a two-week period, including overtime, up to a total of 80 hours.
A full-time employee may take up to 80 hours of Emergency Paid Sick Leave. A part-time employee may take up to the number of hours they work in an average two-week period.
For employees who require paid sick leave for reasons 1, 2 and 3 (above) employers must pay regular compensation up to a maximum of $511/day, or $5,110 in total.
For employees who require paid sick leave for reasons 4, 5 or 6 (above), employers must pay the employee’s regular compensation up to $200/day, or $2,000 in total.
- Employers must post a notice about leave entitlements in a conspicuous location;
- Employers are prohibited from retaliating against any employee who takes leave under the terms of the new law;
- EPSL does not carry over into the following calendar year;
- Employers are not required to pay out the unused portion of leave upon employee’s separation from employment;
New EPSL requirements take effect on April 1, 2020, and expire on December 31, 2020.
Emergency Family Leave under the Family and Medical Leave Act (FMLA)
Who is Covered
Employees who have been on the payroll for at least 30 calendar days who are also
Employees who are unable to work or telework/work from home because they must care for a minor child whose school or place of child care has been closed or is unavailable due to a qualifying public health emergency.
Up to 12 weeks of job-protected FMLA leave, of which the first 10 days may be unpaid (although employees may choose to substitute accrued or unused vacation, PTO or paid sick leave benefits for the unpaid leave);
10 weeks (after the first 10 days) of paid leave at ⅔ of the employee’s customary rate for the number of hours the employee would otherwise be scheduled to work at
No more than $200/day up to $10,000 in total.
Emergency FMLA leave under the FFCRA is job-protected, which means that the employer must restore the employee to their prior position or equivalent upon the expiration of their need for paid leave except for employers with fewer than 25 employees, if the employee’s position no longer exists following the paid leave, due to operational changes caused by the public health emergency. Certain conditions apply to these exemptions.
Contact us for more information.
Expanded FMLA requirements go into effect on April 1, 2020, and expire on December 31, 2020.
Tax Credits for Qualifying Businesses
Employers who provide paid benefits to employees under the FFCRA will receive quarterly tax credits toward the employer’s portion of SSI.
Employers will receive credit for paid qualifying family leave wages up to $200/employee, up to a maximum of $10,000 for all employees per calendar quarter.
How Does the FFCRA Affect My Business?
Changes in your mandated obligations to your employees are complicated and they have been coming down the pike at blistering speeds. If you’re not sure whether your business qualifies for an exemption from the FFCRA, are unsure how to calculate the number of employees working for your business, or are unsure at what rate you are required to compensate employees, we can help.