SPECIAL REPORT: COVID-19 – FFCRA

Families First Coronavirus Response Act Passed What Employers Need to Know

Over the weekend, the U.S. House of Representatives passed the Families First Coronavirus Response Act (the FFCRA). The FFCRA was sent to the Senate, with some amendments to the original bill. It was passed by the Senate and signed by President Trump on March 18, 2020; it becomes effective in fifteen days, on April 2, 2020. This is one of several relief acts expected to deal with the Coronavirus Pandemic.

There are a number of divisions of the FFCRA. For employers and employees there are two provisions with immediate impact. Division C, the “Emergency Family And Medical Leave Expansion Act,” provides leave, part of which is paid, to employees who cannot work in order to care for children under 18 who are home related to school and childcare closures. Division E, the “Emergency Paid Sick Leave Act,” provides paid sick leave for certain employees. Both Divisions apply to employers with less than 500 employees. For employers, an additional section, Division G –“Tax Credits For Paid Sick And Paid Family And Medical Leave” is also important and provides tax credits for both of the paid leave benefits required under Divisions C and E.

Both the benefits under the Emergency Family and Medical Leave Expansion Act (Emergency FMLA) and the Emergency Paid Sick Leave Act (Emergency Sick Leave) will be available April 2, 2020 and expire December 31, 2020.

DIVISION D – EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT

The Emergency FMLA amends the existing Family and Medical Leave Act of 1993 (FMLA) in several significant ways:

The Emergency FMLA applies to employers with less than 500 employees.
Employees are eligible for leave under the Emergency FMLA if he or she has been employed with the employer or for at least 30 calendar days. (This expands coverage beyond the FMLA which requires employment for 12 months.)
The Emergency FMLA provides leave when there is a “Qualifying Need Related to a Public Health Emergency.” This means that the employee is unable to work or telework because the employee must provide care for a child under 18 where the child’s school or place of care has been closed, or the childcare provider is unavailable, due to the public health emergency. For purposes of the Emergency FMLA, “Public Health Emergency” means an emergency with respect to COVID-19 which has been declared by a federal, state or local authority.
Leave is available up to 12 weeks and part of it is paid:
1. The first 10 days of such leave may be unpaid (but see section on Emergency Sick Leave below which may apply in this period). In the employees’ discretion (the employer may not require substitution of paid leave), the employee may elect to substitute accrued vacation leave, personal leave, or medical or sick leave for the unpaid portion of the Emergency FMLA.
2. After 10 days, the employer must provide paid leave for each day of leave under the Emergency FMLA.
3. The paid leave shall be not less than two-thirds of the employee’s regular rate of pay and is based on the number of hours the employee would otherwise be normally scheduled to work.
4. There is a cap on the paid leave – $200.00 per day or $10,000.00 in the aggregate.

Like the FMLA, the Emergency FMLA provides for job restoration, except that job restoration is not required for employers with fewer than 25 employees if:
1. The position held by the employee when the leave begins does not exist due to economic conditions or other changes in the operations of the employer that affect employment and are caused by the public health emergency during the leave;
2. The employer makes reasonable efforts to restore the employee to a position equivalent to that which the employee held when the leave commenced; and
3. If reasonable efforts to restore the employee fail, the employer must continue to contact the employee if an equivalent position becomes available for a period of one year beginning the earlier of the date on which the qualifying need concludes, or 12 weeks after the date on which the employee’s Emergency FMLA leave commences.

The Secretary of Labor may issue regulations:
1. Which exclude from the Emergency FMLA certain healthcare providers and emergency responders from the definition of eligible employees; and
2. Exempt small business with fewer than 50 employees from the requirements of the Emergency FMLA when imposition of such requirements would jeopardize the viability of the business as a going concern.

It is unknown what the requirements for these exemptions will be. However, regulations are expected in the near future.

DIVISION E – EMERGENCY PAID SICK LEAVE ACT

Generally, there is no federal requirement to provide paid sick time. Florida also does not have such a requirement. However, under Emergency Paid Sick Leave, certain paid sick time will be required of all employers. The most immediately relevant portions are:

It applies to all employers with less than 500 employees.
Emergency Sick Leave is available for immediate use regardless of how long the employee has been employed (i.e. leave time is not accrued based on time worked).
It provides that an employer shall provide each employee paid sick time if the employee is unable to work or telework because:
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 healthcare 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 described in (a) or (b) above;
5. The employee is caring for a son or daughter whose school or place of care has been closed, or a childcare provider 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 Treasury and Secretary of Labor. (We do not yet have clarification on what this is intended to address.)

An employer of an employee who is a healthcare provider or emergency responder may elect to exclude such an employee from these requirements.
The following applies to the Emergency Paid Leave:
1. Full-time employees are entitled to 80 hours;
2. Part-time employees are entitled to the number of hours that the employee works on average over a two-week period;
3. Emergency Sick Leave does not carry over from one year to the next, and terminates at the end of 2020;
4. Employers may not require employees to try to find someone to cover the hours the employee misses while using Emergency Sick Leave; and
5. The employee may first use Emergency Sick Leave and the employer cannot require the employee to first use other paid leave provided under its policies – thus, it appears this leave is in addition to, and does not run concurrently with other time off available under current policies.

Calculation and Caps:
1. Emergency Sick Leave is calculated based on the employee’s regular compensation and the number of hours the employee would otherwise normally be scheduled to work. If the employee’s hours vary from week to week, they are calculated based on the average number of hours the employee was scheduled to work per day over the six-month period ending on the date on which the employee takes the leave.
2. Sick time for an employee’s own health is paid at the employee’s regular rate. Paid sick time for the other circumstance is paid at not less than two-thirds of the employee’s regular rate. This is capped:
  1. Emergency Sick Leave shall not exceed $511.00 per day, or $5,110.00 in the aggregate, for any circumstance in which the employee is using the leave because of the employee’s own required quarantine or symptoms as described in paragraphs (3) (a)-(c) above.
  2. Emergency Sick Leave shall not exceed $200.00 per day, or $2,000.00 in the aggregate, for any employee using the sick leave to care for a child, individual subject to quarantine or experiencing symptoms, or the “other substantial similar condition” specified in the Act – symptoms as described in paragraphs (3) (d)-(f) above.

FOR EMPLOYERS

The FFCRA also provides certain tax credits to assist with the required paid leave under the Emergency FMLA and Emergency Sick Leave. There will be a tax credit for each calendar quarter in an amount equal to 100% of the qualified sick leave wages paid. The tax credit is equal to the amount paid and utilizes the same caps which apply to the paid sick leave. It further provides that if there is any excess credit for any calendar quarter, it shall be treated as an overpayment and refunded. Division G also provides certain credits for eligible self-employed individuals.

Access the full text of the FCRA here.

The regulations to implement the FFCRA are expected within 15 days and will hopefully provide some additional clarity. In the meantime, please review your existing paid time off policies and begin to consider how the Emergency FMLA and Emergency Sick Leave will be utilized in your place of business.