News & Updates: Update: Families First Coronavirus Response Act

The Emergency Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, both enacted as part of the Families First Coronavirus Response Act, require employers to provide paid time off to employees unable to work for reasons related to COVID-19.  Below is a summary of key provisions of these new laws, which apply to leave taken between April 1 and December 31, 2020, as well as information on the payroll tax credit available to employers for the costs of paid time off required by the laws. Please note that the United States Department of Labor is expected to issue regulations interpreting the laws, so there may be clarification of requirements for employers before April 1.

Emergency Sick Leave Act

Starting April 1, all employees, regardless of length of service or hours of work, are entitled to two weeks of paid Emergency Sick Leave for certain COVID-related absences, in addition to any accrued paid sick leave or other paid time off that an employer already provides.

Reasons for Use: Employees must be allowed to use Emergency Sick Leave for the following six reasons:

Absences for Self-Care

1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID–19;
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19; or
3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.

Absences for Care of Others

4. The employee is caring for an individual (not just a family member) who is subject to an order or medical advice described in items 1 or 2 above;
5. The employee is caring for the employee’s minor child if the child’s school or day care has closed or the child’s child care provider is unavailable;
6. For other substantially similar reasons that may be identified by the Department of Health and Human Services.

Calculating Sick Leave Pay: The amount of pay an employee will receive for Emergency Sick Leave depends on the reason for the absence.

Employees who need sick leave for self-care reasons (categories 1-3 above) are entitled to their full regular rate of pay up to a maximum of $511/day or $5,100 total.

Employees who need sick leave to care for others (categories 4-6 above), employees are entitled to the greater of 2/3 of their regular pay or of the applicable minimum wage, up to a maximum of $200/day or $2,000 total.

Emergency Family and Medical Leave Expansion Act

This Act temporarily amends the federal Family and Medical Leave Act (FMLA) to add an additional reason for an employee to take FMLA leave—to care for a child under 18 years of age due to the closure of the child’s school or day care or the unavailability of the child’s child care provider (“Public Health Emergency Leave”).

Eligibility: Employees with thirty or more days of service with an employer employing fewer than 500 employees are entitled to up to 12 weeks of Public Health Emergency Leave. Unlike other FMLA leaves, there is no minimum hours-worked requirement for Public Health Emergency Leaves. Note: if an employee has already used FMLA leave during the same year, that earlier FMLA leave will reduce the amount of Public Health Emergency Leave available to the employee.

Pay and Benefits: As with other FMLA leave, the employer is required to continue to pay for the employee’s group health benefits during a Public Health Emergency Leave.

Unlike other FMLA leaves (which are unpaid), employers must provide partial pay during Public Health Emergency Leaves as follows:

• The first ten days of a Public Health Emergency Leave are unpaid, although an employee may elect to use Emergency Sick Leave or other accrued paid time off provided by the employer (such as sick leave, vacation or personal days). The employee can elect the sequence to use these forms of paid time off, and an employer cannot require an employee to use PTO or accrued sick leave before Emergency Sick Leave.
• After the first 10 days of a Public Health Emergency Leave, the employer must pay the employee 2/3 of the employee’s regular rate of pay up to a maximum of $200/day or $10,000 in the aggregate.

Reinstatement: For employers with 25 or more employees, the reinstatement requirements for other FMLA leaves apply to Public Health Emergency Leaves. Employers must generally reinstate an employee to the same position the employee held before the leave. If that position no longer exists, the employer may reinstate the employee to another position with equivalent pay, benefits and other terms and conditions of employment. Employees are not entitled to any greater job rights than had the employee not taken the leave.

Job restoration obligations for employers with fewer than 25 employees are more limited than for employers with more employees.

Notice to Employees The United States Department of Labor (“DOL”) has published a notice that covered employers are required to post in a “conspicuous place” on the employer’s premises. The DOL has indicated that an employer whose employees are working remotely may satisfy the posting requirement by emailing or direct mailing this notice to employees, or posting this notice on an internal or external website used for employee information.  A copy of the required notice is available here.

Payroll Tax Credit for Emergency Sick Leave and Public Health Emergency Leaves

The Families First Coronavirus Response Act allows employers to take credits against payroll taxes for each calendar quarter in an amount equal to wages that were required to be paid under the Emergency Sick Leave or Emergency FMLA Expansion Act, but only up to the caps set forth above. Employers are also given additional payroll tax credits for group health plan costs and Medicare payroll taxes associated with the payments required under the two acts.  In a March 20 announcement, the IRS explained that each quarter, “eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.”  According to the IRS announcement, the payroll taxes “available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. The IRS expects to issue guidance during the week of March 23 with more information. Important Note: Only pay required to be provided under the new laws is subject to the payroll tax credit. Therefore, employers should separately account for amounts paid as Emergency Sick Leave or Public Health Emergency Leave pay to be able to claim the tax credit. Employers should consider establishing separate payroll categories for these two new types of leave pay, distinguishing these new wages from other forms of paid time off.

Updated March 26, 2020