Last night, President Trump signed the Families First Coronavirus Response Act into legislation. The Act will require certain employers with under 500 employees to provide emergency paid sick leave for their employees. Our team has gone through this new legislation, and our general findings are below. It is important to note that this is not a full breakdown of the Act, however, a summary of the key points as they pertain to the majority of employers and their employees. We are happy to answer any questions, but would encourage all employers and employees to consult with a qualified Labor/Employee Law attorney. First, we will explore the Emergency Family and Medical Leave Act aspect, and then, the Paid Sick Leave aspect.
Emergency Family and Medical Leave Act
– Effective within the next 15 days, expires 12/31/2020.
– The Act targets employers with fewer than 500 employees, and pertains specifically to their employees who have been with the company for a minimum of 30 calendar days. However, it allows companies who employ health care and emergency responders to exclude those employees.
– Allows eligible employees to take up to 12 weeks of FMLA. To fit the criteria of, “…qualifying need related to a public emergency…”, the employee must fit into one of these categories…
- Caring for or assisting a family member who is either:
- Self-isolating due to coronavirus diagnosis
- Experiencing coronavirus symptoms and needs medical diagnosis or care
2. Caring for his or her child because the child’s school or place of care has been closed, or the child’s care provider is unavailable due to coronavirus
– While employees are eligible for up to 12 weeks (60 days), the employer is not required to pay for the first two weeks. For the remaining 10 weeks, the employee should be compensated at a rate that is equivalent to 2/3 of their standard pay, capped at a maximum of $200 per day.
– It is not fully clear if the employer can mandate that the employee use any existing PTO/Sick time for the initial unpaid 2 weeks.
– Eligible employees who take advantage of this new FMLA extension are job- protected, meaning that when they return to work, the employer must offer the same or an equivalent position. There is some wiggle room for companies with fewer than 25 employees who can demonstrate that a public health emergency has dictated operational changes. However, if that employee does not immediately return due to ‘operational changes’, the employer must make reasonable efforts to contact the employee for one year if an equivalent position does become open.
– Tax credits are available to compensate the employers. These credits will be applied against the employers portion of Social Security payroll taxes, and will be refunded on a Quarterly basis. If the employer’s liability exceeds the amount that he/she pays in on eligible employees Social Security payroll taxes, the excess amount will also be refunded to that employer on a Quarterly basis.
Emergency Paid Sick Leave Act
– Effective within the next 15 days, expires 12/31/2020.
– The Act targets employers with fewer than 500 employees, however, unlike the Emergency FMLA, there is no 30 day employment stipulation for employees to be eligible.
– If an employee falls into any of the following categories, he/she may be eligible.
- – 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 isolation;
- – 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.
– Full-time employees are eligible for 2 weeks PTO (10 days) at their standard rate of pay, with a $511 dollar daily cap. Part-time employees are also eligible for two weeks, but at an equivalent of their standard work hours, with a $511 dollar daily cap.
– As with the Emergency FMLA act, a tax credit will be available to the employers paid Quarterly against Social Security payroll taxes.
– There is a stipulation for self-employed individuals to also qualify at 100% for the two weeks, or at 2/3 pay if they are required to stay at home due to a sick child or family member.
This is a very fluid situation, and Congress is already working on ‘Phase 3’, which thus far, appears to put an emphasis on protecting small business owners. If you have any questions at all, please don’t hesitate to reach out to our team here at SPB, or a qualified attorney or CPA. Thanks – stay safe, and we will continue to keep you updated with the latest developments!