Families First Coronavirus Response Act

The Families First Coronavirus Response Act is a bill containing economic measures as a response to the spread of COVID-19. This bill responds to the coronavirus outbreak by providing paid sick leave, free coronavirus testing, expanding food assistance and unemployment benefits, and requiring employers to provide additional protections for health care workers.

It was passed by the House of Representatives and the Senate, and this morning, the President signed this $100 billion bill into law.  It will go into effect on April 1, 2020.  Employers are required to print and post this poster in a conspicuous area in your workplace. 

The Act contains two segments majorly impacting business owners and employees: the Emergency Paid Sick Leave Act and the Emergency Family Medical Leave Expansion Act.

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act (EPSLA) requires employers with fewer than 500 employees to provide paid sick leave to employees who, regardless of how long they’ve worked for the company, are unable to work (or work remotely) for any of the following categories related to COVID-19:

1. The employee is subject to a Federal, State or local quarantine or isolation order.
2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to the virus.
3. The employee is experiencing symptoms of the virus and seeking a medical diagnosis.
4. The employee is caring for another individual who is subject to categories 1 or 2 above.
5. The employee is caring for their child if the child’s school or place of childcare has been closed or is unavailable due to the virus.
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

For sick leave, full-time employees are entitled to 80-hours of paid sick leave. Part time employees are entitled to an equivalent number of hours they work on average over a two-week period.

If the leave is taken for categories 1-3, the employers must pay the leave at the employees’ normal rates, subject to a per-employee maximum of $511 per day and $5,110 in total. 

If leave is taken by reason of categories 4-6, the leave must be paid at a rate equal to at least 2/3 their normal rate, subject to a per-employee maximum of $200 per day and $2,000 in total.

Exceptions:

1. The Secretary of Labor may provide exemptions to employers with fewer than 50 employees if providing leave to employees would jeopardize the viability of the business.
2. Employers of healthcare workers or first responders may elect to exclude their employees from benefits under the Act.

Emergency Family Medical Leave Expansion Act

The Emergency Family Medical Leave Expansion Act (EFMLEA) is an expansion of the Family and Medical Leave Act of 1993 (FMLA) and now applies to all businesses with fewer than 500 employees Here are the essential things to know:

Qualifications:  An employee qualifies if they’ve been on their employer’s payroll for at least 30 calendar days.  The employee must be unable to work (or work remotely) due to a need to care for a child under the age of 18 if their school or place of childcare has been closed or is unavailable due to a public health emergency related to COVID-19.

The First 10 Days: The first 10 days of absence will be unpaid leave. An employee may opt to use their accrued vacation, personal or sick leave, but the employer can not require them to do so. Additionally, the employee can be paid via the Emergency Paid Sick Leave Act, which would allow them to receive pay at a rate equal to at least 2/3 their normal rate, subject to a per-employee maximum of $200.

EFMLEA Leave: After the first 10 unpaid days of EFMLEA leave, the employers must pay employees no less than 2/3 of the employee’s regular rate for his or her usual hours worked.  The benefits under the Act are limited per employee to $200 per day and $10,000 in total.

For part-time or employees who work variable hours, the leave is calculated based on the average hours the employee was scheduled per day over the six-month period prior to the employee taking leave under the Act.  If the employee did not work over the previous six months, benefits are calculated based on a reasonably expected average hours per day that the employee would normally be scheduled to work at the time of hiring.

Employer Tax Credits

The Act provides tax credits for employers to offset the cost of wages that are paid to employees as part of the bill’s family leave and sick leave provisions, through the end of 2020.

The credit for sick leave paid under the EPSLA is equal to the actual wages paid by the employer, subject to a limit of $511 per day, per employee, if paid for reasons of categories 1 through 3 above.  The credit is limited to $200 per day if the sick leave is used to care for another individual or child under categories 4 through 6 above. The credit for leave paid under the EFMLEA is limited for each employee to $200 per day, with a maximum of $10,000 per employee. Additionally, the Act allows an additional payroll tax credit for any group health plan expenses that are related to the sick leave or emergency family medical leave benefits paid.

The credits are reported each quarter on the employer’s payroll tax return and are refundable to the extent that the credit exceeds the employer’s payroll tax liability.

The Act also provides for similar benefits for self-employed individuals who would be eligible for EPSLA benefits had they been an employee of a business, via refundable payroll tax credits.  Finally, the Act makes these same wages not subject to the employer’s share of the Social Security portion of FICA tax (6.2% of wages).