Employers need to be prepared for the Families First Coronavirus Response Act (FFCRA) effective April 1, 2020. This briefly summarizes the overwhelming information with links to the Dept of Labor (DOL) and IRS websites for current information.
No later than April 1st, each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.
Non-Federal employers must post this Non-Federal Families First Coronavirus Response Act poster.
Federal employers must post this Federal Families First Coronavirus Response Act poster.
California employers need to keep in mind specific requirements as it pertains to the California State Paid Sick leave and other issues that are enforced by the CA Labor Commissioner –
State of California Dept. of Industrial Relations- COVID-19 FAQs on laws enforced by the Labor Commissioner’s Office
CITY OF LOS ANGELES EMPLOYERS
Employers within the City of Los Angeles boundaries, there is additional information regarding Paid Sick Leave in the City of LA:
Remember, the above Paid Sick Leave benefits are already in place and the new benefits provided by the FFCRA are “over and above” what you are already required to provide in the State of California and the City of Los Angeles.
SUMMARY OF FAMILIES FIRST CORONAVIRUS RESPONSE ACT ON EMPLOYERS
(Information as of March 25, 2020)
On March 18, 2020, the President signed into law, H.R. 6201, the “Families First Coronavirus Response Act” (FFCRA) which generally requires employers with less than 500 employees to provide a certain amount of paid sick and paid leave to employees affected by COVID-19, and provides affected employers with a corresponding employment tax credit. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern. To elect this small business exemption, the employer will need to document why their business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in forthcoming regulations.
The law also temporarily expands the Family and Medical Leave Act (FMLA) requirements to offer protected leave related to the Coronavirus. These new paid sick leave requirements are in addition to those already in effect at the state or local level and the new FMLA provisions apply to almost all employers. The U.S. Department of Labor (DOL) just posted information yesterday including an initial set of questions and answers (Q&As) concerning the Act. To access this information go to: https://www.dol.gov/agencies/whd/pandemic
We have found the information on the DOL website to be very helpful and written in laymen’s terms, therefore, I encourage all of my clients to view this information directly on the DOL website. You will find:
- Fact Sheets
- Questions and Answers
- Field Assistance Bulletin explaining the Temporary Non-Enforcement Period
Following are some key points of this Act:
EMERGENCY PAID SICK LEAVE ACT
- The Emergency Paid Sick Leave Act applies to companies with less than 500 employees.
- The bill takes effect on April 1, 2020 and will remain in place through December 31, 2020.
- There is no requirement for tenure of employment and the leave is a grant (not accrued) so the appropriate amount is available immediately.
- Full-time employees are entitled to take up to 80 hours of paid sick leave. Part-time employees are entitled to the “number of hours” equal to the number of hours that such employee works, on average over a 2-week period. For employees that do not have a set schedule, paid sick leave is based on the average number of hours the employee was scheduled per day over the six-month period prior to the use of the leave.
- Because the federal paid sick leave is in addition to other statutory paid sick leave (State or City-specific leave), an employer cannot incorporate it into an existing PTO policy. The additional time off must be separate. In addition, employers cannot require an employee to exhaust other forms of paid sick or paid time off before utilizing the new leave.
- Employers will be required to post a notice in a conspicuous place on its premises, informing employees of their expanded sick leave rights. I have attached a copy of the notice (for non-Federal employees), however, please go to the “Frequently Asked Questions” under “Posters” on the DOL website for a full explanation of the posting requirements, particularly in light of the fact that employees may be working remotely.
The paid sick leave is for COVID-19-related issues. There are six justifications for an employee using the leave and they have differing pay requirements. If the employee is:
- Subject to a federal, state, or local quarantine or isolation order for Coronavirus—paid at the regular rate of pay capped at $511 per day and/or $5,110 in total;
- Advised by a health care provider to self-quarantine due to Coronavirus concerns—paid at the regular rate of pay capped at $511 per day and/or $5,110 in total;
- Experiencing symptoms of Coronavirus and is seeking a medical diagnosis—paid at the regular rate of pay capped at $511 per day and/or $5,110 in total;
- Caring for an individual who is under a quarantine or isolation order or has been advised to self-quarantine—paid at 2/3 of the regular rate of pay capped at $200 per day and/or $2,000 in total;
- Caring for a child whose school or place of care has been closed (or child care provider is unavailable) due to Coronavirus—paid at 2/3 of the regular rate of pay and capped at $200 per day and/or $2,000 in total;
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services—paid at 2/3 of the regular rate of pay and capped at $200/day and/or $2,000 in the aggregate.
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
- The Emergency Family and Medical Leave Expansion Act applies to companies with less than 500 employees.
- The bill takes effect on April 1, 2020 and will remain in place through December 31, 2020.
- The expanded FMLA is specifically intended for childcare-related issues and has pay implications significantly different from the regular FMLA. It is available only when an employee is unable to work (or telework) due to a need to care for a son or daughter under the age of 18 if the child’s school or place of care is closed (or child care provider is unavailable) due to a public health emergency with respect to COVID-19 declared by a federal, state, or local authority.
- Employees who have been employed for at least 30 calendar days are eligible for up to 12 weeks of protected leave.
- If an employee takes leave to care for a child due to Reason #5 above, they are eligible for 2 weeks of paid leave (as outlined in the “Emergency Paid Sick Leave Act” section, followed by up to 10 weeks of paid expanded family and medical leave at 40 hours per week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period. The employee may elect (but may not be required) to use accrued vacation or sick leave during this time.
- After the first 10 days, the employer must provide paid leave of no less than 2/3 of the employee’s regular rate of pay, capped at $200 per day and up to a total amount of $10,000.
- An employee who uses this FMLA leave is entitled to reinstatement to the same or equivalent position UNLESS the employer has fewer than 25 employees for specified circumstances.
PAID FAMILY LEAVE AND PAID SICK LEAVE TAX CREDITS
Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the Families First Coronavirus Response Act. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. For more information, see the Dept. of the Treasury or IRS websites.
Here is information on the IRS website on how to recover the cost of providing Coronavirus-related leave: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus
PENALTIES AND ENFORCEMENT
Employers in violation of the first 2 weeks’ expanded family and medical leave or unlawful termination provisions of the FFCRA will be subject to the penalties and enforcement described in Sections 16 and 17 of the Fair Labor Standards Act.29.U.S.C.216;217. Employers in violation of the provisions providing for up to an additional 10 weeks of expanded family and medical leave to care for a child whose school or place of care is closed (or child care provider is unavailable) are subject to the enforcement provisions of the Family and Medical Leave Act.
The Department of Labor will observe a temporary period of non-enforcement for the first 30 days after the Act took effect (e. March 18 through April 17, 2020), so long as the employer has acted reasonably and in good faith to comply with the Act. For purposes of this non-enforcement position, “good faith” exists when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the Department of Labor (DOL) receives a written commitment from the employer to comply with the Act in the future.
Please note that the above are only the key points of the Act and additional key components of the Act can be found at: https://www.dol.gov/agencies/whd/pandemic
The DOL may release additional Q & As on more issues, or clarify issues in the existing guidance, before the law takes effect on April 1, 2020, therefore, we encourage employers to go the DOL website periodically for any updates.
Disclaimer: This information is provided for informational purposes only and does not constitute as legal advice. South Bay HR, Inc. encourages readers to consult with appropriate legal and/or tax advisors. South Bay HR Consultants are not attorneys. They can provide general information which is not a substitute for legal advice.
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