Workforce Coronavirus Relief
Updated: Aug 13, 2020
The federal Families First Coronavirus Response Act of 2020 ("Families First Act") is the second in a series of legislation to deal with the adverse health and economic effects of COVID-19. The Act applies to employers with fewer than 500 employees. Its major provisions require (1) paid sick leave, and (2) paid FMLA leave for child care during the pandemic. The Act's leave provisions are effective April 2, 2020 through December 31, 2020.
Paid sick leave. Employers subject to the law must provide up to 10 days of paid sick leave at the employee's regular rate of pay to enable the employee to self-quarantine or seek treatment for COVID-19 illness. Sick pay is limited to two-thirds of the employee's regular rate of pay/minimum wage when leave is taken to care for an ill family member.
Specifically, an employer must provide paid sick leave for any of the following reasons:
The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
The employee is caring for an individual who is subject to an order as described in the first point above or has been advised as described in the second point above. The employee is caring for his or her child because the child's school or place of care has been closed, or the child's care provider is unavailable, due to COVID-19 precautions.
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. (An employer of a health care provider or an emergency responder may elect to exclude the employee from this provision.)
Full-time employees are entitled to 80 hours of paid sick time. A part-time employee must be given a number of hours equal to the hours the employee works over a two-week average period. The pay cannot exceed $511 a day and $5,110 in the aggregate when the leave is required for the employee's own health or need to quarantine. Tt cannot exceed $200 a day and $2,000 in the aggregate when the leave is required to care for a family member or a child out-of-school.
Paid sick leave pursuant to the Families First Act must be granted in addition to any preexisting paid leave benefits the employee may have accrued. The employer may not alter its existing paid leave policy to avoid this requirement. Sick leave must be made available for immediate use by an impacted employee regardless of length of employment, and the employer cannot require that any employee first exhaust other paid leave benefits.
An employer who violates the Families First Act sick leave provisions is deemed to have failed to pay minimum wages in violation of the Fair Labor Standards Act and will be subject to its penalties.
Public health emergency child care leave. The Families First Act also amends the FMLA to provide up to 12 weeks of job-protected leave —10 of which must be paid, subject to a cap—to employees who have a qualifying need related to a public health emergency. This new type of leave can be used by an employee unable to report for work due to a need to care for the employee's minor child at home when the child's school or place of care has been closed, or the child's care provider is unavailable, due to a public health emergency.
The first 10 days of emergency leave may be unpaid because 10 days of paid sick leave are available for this purpose under the Families First Act. The employee may elect to substitute other accrued paid leave during this time. After the first 10 days, the employer must provide paid leave in an amount not less than two-thirds of the employee's regular rate of pay, capped at $200 a day and $10,000 aggregate. The Families First Act provides a calculation for employees with varying workweek schedules.
Emergency leave may be used by any employee employed for at least 30 calendar days by the employer - a much lower threshold than other FMLA leave. The regular requirement that the employee work at a job site with 50 employees within a 75-mile radius does not apply to emergency leave.
The Families First Act gives the Department of Labor the authority to exempt small businesses (those with fewer than 50 employees) from the emergency leave requirements when the viability of the business as a going concern would be jeopardized. Guidance is anticipated.
Employer tax credits. The Families First Act provides employers subject to it with payroll tax credits as a reimbursement measure. The paid sick leave credit is equal to 100% of the sick leave wages paid, including qualified health plan expenses related to those wages. The credit can be claimed quarterly. It is limited to $511 a day ($5,110 total) if an employee has taken time off for self-care, and to $200 a day ($2,000 total) if the leave have been taken to care for a family member who is quarantined or has symptoms of COVID-19, or a minor child whose school has closed.
For wages paid for public health emergency leave, an employer may take a payroll tax credit equal to 100% of the emergency leave wages paid, including qualified health plan expenses related to those wages. The credit is limited to $200 a day ($10,000 per employee total). Either credit is refundable if it exceeds the amount the employer owes in payroll tax.
To prevent a double benefit, employers must include the credits received in their gross income. Further, any wages taken into account in determining the credit allowed under the Families First Act will reduce the paid family and medical leave credit that may be available to the employer under the 2017 Tax Cuts and Jobs Act.