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Families First Coronavirus Response Act Expands Employee Coverage Under FMLA and Provides Emergency Paid Sick Leave
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On March 18, U.S. President Donald Trump signed the Families First Coronavirus Response Act (H.R. 6201) into law. The law is set to take effect no later than April 2 and will continue to December 31, 2020. The act compels employers with fewer than 500 employees to provide paid family leave to employees with 30 days or more of tenure, who are unable to work or telework due to childcare needs triggered by COVID-19. It also calls for paid sick leave to all employees, regardless of tenure, who are unable to work because of government shelter in place orders, COVID-19-related illness and several other circumstances triggered by the pandemic.
Emergency Family and Medical Leave Act
1. This act allows an employee, who is unable to telework, to take up to 12 weeks of job-protected leave to care for the employee’s child (under the age of 18), if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a public health emergency.
2. The Secretary of Labor is authorized to issue regulations to exclude certain healthcare providers and emergency responders from the definition of eligible employee; and to exempt small businesses with fewer than 50 employees when providing such leave would jeopardize the viability of the business as a going concern.
3. The act applies to employees who have been employed for at least 30 calendar days prior to taking the Emergency Family and Medical Leave Act. The existing federal FMLA requirements that the employee has been employed for a year, worked for 1,250 hours, and works in a location where there are 50 employees within a 75-mile radius will not apply.
4. The first 10 days of the emergency leave can be unpaid, although employees may elect to use other paid benefits (accrued vacation/PTO, accrued sick leave, etc.) to cover that time.
5. For full-time employees, the remaining time must be paid at two-thirds of the employee’s regular rate of pay, for the number of hours the employee would otherwise be scheduled to work—this amount is capped to $200 per day and $10,000 in the aggregate, per employee.
6. For part-time employees or those who work irregular schedules, the remaining time must be paid based on the average number of hours the employee worked for the 6 months prior to taking Emergency FMLA.
7. For employees who have worked for less than six months prior to taking Emergency FMLA, the remaining time must be paid based on the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.
8. 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 or equivalent position upon return to work.
9. Employers with fewer than 25 employees are generally excluded from this requirement if the employee’s position no longer exists due to an economic downturn or other circumstances caused by a public health emergency during the period of Emergency FMLA.
Emergency Paid Sick Leave Act
This act applies to, and provides paid sick leave for, all employees (both full and part-time) of covered employers, regardless of the employee’s duration of employment, who are unable to work or telework because of the need to take emergency sick leave.
The act allows a full-time employee to take up to 80 hours of paid sick leave, paid at the employee’s regular rate, when 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; and/or
3. Experiencing COVID-19 symptoms and seeking medical diagnosis.
Emergency paid sick leave wages taken pursuant to numbers 1-3 above, are capped at $511 per day, up to $5,111 in the aggregate, per full-time employee.
The act allows a full-time employee to take up to 80 hours of paid sick leave, paid at two-thirds the employee’s regular rate:
4. To care for an individual for such purposes (see numbers 1-3 above);
5. To care for their child if the child’s school or place of care is closed or the child’s care provider is unavailable due to a public health emergency; and/or
6. If the employee is 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.
Emergency paid sick leave wages taken pursuant to numbers 4-6 above, are capped at $200 per day, up to $2000 in the aggregate, per employee.
The act allows a part-time employee to take up to the number of hours equal to the number of hours that such employee works, on average, over a two-week period, of paid sick leave, paid at the employee’s regular rate, when the employee is:
7. Subject to a federal, state or local quarantine or isolation order related to COVID-19;
8. Advised by a health care provider to self-quarantine due to COVID-19 concerns; and/or
9. Experiencing COVID-19 symptoms and seeking medical diagnosis.
Emergency paid sick leave wages taken pursuant to numbers 7-9 above, are capped at $511 per day, up to $5,111 in the aggregate, per full-time employee.
The act allows a part-time employee to take up to the number of hours equal to the number of hours that such employee works, on average, over a two-week period, of paid sick leave, paid at two-thirds the employee’s regular rate:
10. To care for an individual for such purposes (see numbers 7-9 above);
11. To care for their child if the child’s school or place of care is closed or the child’s care provider is unavailable due to a public health emergency; and/or
12. If the employee is 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.
Emergency paid sick leave wages taken pursuant to numbers 10-12 above, are capped at $200 per day, up to $2000 in the aggregate, per employee.
13. Part-time employees or those who work irregular schedules, must be paid based on the average number of hours they worked in the six months prior to taking the emergency sick leave.
14. Employees who have worked for less than six months must be paid based on the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.
An employer may not change its current paid leave policy after enactment, to avoid the obligations of the additional leave mandated by the act.
Coverage for Testing for COVID-19
Section 6001 of the act requires private health plans (including a grandfathered health plan) to provide coverage for COVID-19 diagnostic testing and related services to employees and their covered dependents, without cost sharing (e.g. deductibles, copayments and coinsurance).
Plans cannot require prior authorization or similar medical management requirement as a precondition; and this provision of the act will stay in effect through the end of the national emergency period.
Covered services and related cost waivers apply to:
1. Diagnostic testing;
2. Facility costs (physical office, urgent care center and emergency room); and
3. Healthcare provider services (in-person and telehealth).
Tax Credits
Section 7001 of the act provides a series of refundable tax credits for employers who are required to provide the Emergency FMLA and paid sick leave, which are allowed against the employer portion of the Social Security taxes. Employers will only be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.
Only employers who are required to offer Emergency FMLA and paid sick leave will qualify for these credits. Employers are entitled to a refundable tax credit equal to 100% of the qualified Emergency FMLA Leave wages paid by employers for each calendar quarter, capped at $200 per day, for each individual, up to $10,000 per calendar quarter.
Employers are entitled to a refundable tax credit equal to 100% of the qualified emergency sick leave wages paid by employers for each calendar quarter:
1. $511 per day, if the employee is taking the qualified sick leave to care for themselves, for up to 10 days per employee in each calendar quarter.
2. $200 per day, if the employee is taking the qualified sick leave to care for another individual, for up to 10 days per employee in each calendar quarter.
Further guidance from Congress and the Social Security Administration—who will be administering this act, is expected, and we will update this alert accordingly. If you have any questions or wish to discuss the impacts of these requirements, do not hesitate to reach out to the authors of this alert.