American flag flying in front of Congress

Congress passes Families First Coronavirus Response Act

Authored by Bukaty Companies on March 21, 2020

In response to the coronavirus (COVID-19) outbreak, President Donald Trump signed into law the Families First Coronavirus Response Act, a package of provisions providing relief to workers and families. The law, which took effect April 1, provides paid sick leave, free coronavirus testing, enhanced food assistance and unemployment benefits. It also requires certain employers to create and execute a comprehensive infectious disease exposure control plan.

Emergency Family and Medical Leave Expansion Act

The new law expands the Family and Medical Leave Act (FMLA) to provide a public health emergency leave for employers with fewer than 500 employees. Businesses with fewer than 50 employees can be exempt if certain conditions are met. Health care providers and emergency responders may also be excluded from emergency leave provisions.

Leave is granted to both full and part-time employees, who have been with the organization for at least 30 days (rather than the current-day FMLA requirement of at least 12 months and 1,250 hours worked). The employee must be unable to work (or telework) and be caring for their dependent child because the dependent’s school, place of care or day care facility closed due to COVID-19 to receive the benefit.

As with FMLA, employees taking emergency family and medical leave are entitled to have their position restored to their same or equivalent position. However, employers with fewer than 25 employees are not subject to this requirement if all conditions below are met.

  • The employee must take public health emergency leave.
  • The employee’s current position no longer exists due to economic conditions or other changes to the operating conditions that impact employment and are caused by a public health emergency that occurs during the leave period.
  • The employer makes reasonable efforts to restore the employee to a position equivalent in pay, benefits and conditions of employment to the job held prior to leave.

Emergency Paid Sick Leave Act

Another provision signed into law is the Emergency Paid Sick Leave Act, which operates alongside the emergency FMLA expansion and also applies to employers with fewer than 500 employees (similar small business exemptions described above may apply). The law requires covered employers to provide paid sick leave to full and part-time employees who are unable to work (or telework) regardless of their tenure. Full-time employees receive up to 80 hours of paid sick leave, while part-time employees receive payment based on their average hours worked over a two-week period. Employers cannot force employees to take any accrued PTO, sick or vacation time, but employees can use it if they choose.

If qualified for the leave, an employee must meet one of the four criteria below.

  • The employee is currently diagnosed with COVID-19.
  • The employee is quarantined or self quarantined based on the guidance of a health care provider, employer or government official.
  • The employee must care for a quarantined or COVID-19 diagnosed individual.
  • The employee must care for their dependent child because the dependent’s school, place of care or day care facility closed due to COVID-19.

Both the emergency FMLA and emergency sick pay provisions are in effect until December 31, 2020.

Tax credits

Covered employers can utilize payroll tax credits to cover 100% of the cost of wages paid under emergency paid leave. An additional credit will be allowed for the amount of the employer’s qualified health plan expenses incurred during the qualified sick leave. The credit will be taken out quarterly against the employer’s Social Security tax payments. Excess credit will be treated as an overpayment that will be refunded.

Below is a summary of the applicable sick pay and leave pay scenarios.

Table

Bukaty Companies will continue to provide updates as more information becomes available.

Blog Category: Benefits