Late in the evening on Wednesday, March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act ("Act"). The effective date has not been conclusively determined. Certainly, it will be effective not later than April 2, 2020.
This new law is an intertwining of multiple existing federal laws affecting certain federal entitlement and benefit programs such as the nation's nutritional waivers and SNAP programs, and it expands other federal acts such as FMLA to include paid sick time off to address COVID-19, Unemployment Insurance, and creates a new benefit for emergency paid sick leave to address COVID-19. Other provisions affect a new Social Security Entitlement and standards relevant to healthcare workers. Regulations will be developed to further interpret the final version of the law.
The information below addresses only those matters relevant to the Private Employer with fewer than 500 employees or any number of public employees.
Under the expansion of FMLA under the Act, all qualifying employers (those with fewer than 500 employees) are required to provide additional leave for a multitude of additional absences arising from the coronavirus as noted below. The first 10 days of this type of leave may be unpaid. All time after the initial 10 days of this leave is to be paid at two-third's (2/3rds) of the employee's regular pay rate.
Another of the Bill's provisions will require all employers with fewer than 500 employees to provide 80 hours for full time employees of paid sick leave at two-third's (2/3rds) the employee's regular rate of pay. For part time workers, a number of hours equal to the number of hours that such employee works on average over a two-week period. There is no distinction in the Bill between profit or non-profit employers. This law includes a sunset provision at the end of 2020. As such, there is no carry over for any unused paid sick leave benefit.
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
Under this provision of the Act, PUBLIC HEALTH EMERGENCY LEAVE is added to the definition of the kinds of 'leaves' available under FMLA allowing time off due to a qualifying need related to a public health emergency. This additional basis for FMLA leave shall exist during the period beginning on the date the Emergency Family and Medical Leave Expansion Act becomes law and ending on December 31, 2020.
PUBLIC HEALTH EMERGENCY is defined as an emergency with respect to coronavirus that is declared by a Federal, State, or local authority.
The PUBLIC HEALTH EMERGENCY LEAVE permits the following:
unpaid leave for the first 10 days and then paid leave for balance of leave at a rate of not less than 2/3rds the regular wages of the employee;
the employee may elect to substitute any accrued vacation leave, personal leave or medical/sick leave for unpaid leave;
after the expiration of the 10 unpaid days, an employer shall provide paid leave for any remaining leave available under FMLA if used for the purposes of COVID-19;
the employee's regular pay rate as defined by the FLSA is the rate to use to determine the 2/3rds requirement;
the 2/3rds pay must be for the same number of hours the employee would be otherwise normally scheduled to work (or the average number of hours calculated based on a varying schedule);
the definition of eligible employee for this leave is expanded to include any employee that has been employed for at least thirty days by the employer from whom the paid leave is sought;
the covered employer for this new leave is any employer with FEWER than 500 employees;
In no event shall paid leave exceed $200 per day and $10,000 in aggregate.
Keep in mind, any employee is entitled to 12 weeks (26 weeks for caregiver leave) total in a year for FMLA. To qualify for PUBLIC HEALTH EMERGENCY LEAVE, the employee must have a 'qualifying need related to a public health emergency,' which means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed or the child care provider of such son or daughter is unavailable, due to a public health emergency, as declared by a Federal, State or local authority to address COVID-19.
Restoration to Position. An employee taking a PUBLIC HEALTH EMERGENCY Leave will be returned to the same position they held prior to the leave; or the position they would hold if no such Leave had been taken. However, this restoration requirement shall not apply with respect to an employee of an employer who employs fewer than 25 employees if the conditions described below are met:
(A) The employee took this leave under the Public Health Emergency;
(B) The employee's position when the leave commenced does not exist due to economic conditions or other changes in the employer's operating conditions affecting employment and that are caused by the public health emergency during the employee's leave;
(C) If the employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave began with equivalent employment benefits, pay and other terms and conditions of employment;
(D) If the employer's reasonable efforts fail, the employer makes reasonable efforts to contact the employee if an equivalent position described becomes available.
The employer has one year in which to makes these reasonable efforts beginning on the earlier of the date the qualifying need concludes or 12 weeks after the date the employee's leave commences.
EMERGENCY PAID SICK LEAVE ACT
Under the new law, there is a new EMERGENCY PAID SICK LEAVE ACT that includes PAID SICK TIME REQUIREMENT. Under this provision, the Employer needs to be aware of the following:
An employer shall provide to each employee employed by the employer paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because of any of the following uses:
(1) To self-isolate or quarantine doe to Federal, State or local Order due to COVID-19;
(2) ) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
(6) 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.
The employee will be entitled to paid sick time for an amount of hours as follows:
(A) For full-time employees, 80 hours.
(B) For part-time employees, a number of hours equal to the number of hours that such employee works, on average, over a 2-week period.
(C) Paid sick time under this section shall not carry over from 1 year to the next.
Paid sick time provided to an employee under this Act shall cease beginning with the employee's next scheduled work-shift immediately following the termination of the need for paid sick time.
The amount of paid sick time benefit that an employee is entitled to receive under this provision is capped at $511 per day and $5,110 in the aggregate for matters related to subparagraph (1), (2) or (3) above. The amount of paid sick time benefit that an employee is entitled to receive under this provision is capped at $200 per day and $2,000 in the aggregate for uses related to subparagraph (4), (5), or (6) above.
As for the sequencing of benefits, an employee may first use this paid sick time benefit before any other employer sponsored benefit. An employer may not require an employee to use other employer sponsored benefit or paid leave before the employee uses this paid sick time benefit.
EMPLOYMENT UNDER MULTI-EMPLOYER BARGAINING AGREEMENTS.
An employer who is a member of a multiemployer collective bargaining agreement may, consistent with its bargaining obligations and its collective bargaining agreement, fulfill its obligations under the Bill by making contributions to a multiemployer fund, plan, or program based on the hours of paid sick time each of its employees is entitled to under the Bill while working under the multiemployer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement and for the uses specified under section 2(a).
TAX CREDITS FOR PAID SICK AND PAID FAMILY AND MEDICAL LEAVE AND PAYROLL CREDIT FOR REQUIRED PAID SICK LEAVE.
The employer shall be allowed as a credit against the tax imposed by section 3111(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such calendar quarter.
The amount of qualified sick leave wages taken into account under subsection (a) with respect to any individual shall not exceed $200 ($511 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act) for any day (or portion thereof) for which the individual is paid qualified sick leave wages. The aggregate number of days taken into account for any calendar quarter shall not exceed the excess (if any) of 10, over the aggregate number of days so taken into account for all preceding calendar quarters.
The credit allowed with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a) of the Code for such calendar quarter (reduced by any credits allowed under subsections (e) and (f) of section 3111 of such Code for such quarter) on the wages paid with respect to the employment of all employees of the employer.
If the amount of the credit exceeds the limitation for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded.
Obviously, this is a very fluid situation. As always, should you have any questions, please contact our office.
Professional Tax & Accounting LLC
(260) 484-1673
Disclaimer: This publication was made available to us by Barrett McNagny LLP. This publication is made available for educational purposes only and is not intended as legal advice.