On March 18, 2020 President Trump signed an updated version of the Families First Coronavirus Response Act (FFCRA) passed by the Senate. The FFCRA’s main effects on businesses are likely to come from two parts: the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLEA).
When do the Families First Coronavirus Response Act’s requirements apply?
There are two important points to keep in mind regarding the timing of all of the requirements of the FFCRA:
What are the paid sick leave requirements created by the Families First Coronavirus Response Act?
The requirements of paid sick leave are split in two separate categories. The first is the Emergency Paid Sick Leave Act, and the second is the expansion of the Family and Medical Leave Act contained in the EFMLEA.
Under the EPSLA, employers with fewer than 500 employees must provide two weeks of paid sick leave to employees who cannot work or telework because of any one of six scenarios:
Under the EFMLEA, employers with fewer than 500 employees must provide employees with sick leave for up to twelve weeks, some of which must be paid. This requirement only applies, however, if the employee is unable to work or telework because of a need to care for their child, and the child’s school, place of care, or child-care provider is closed or unavailable because of a COVID-19 emergency declared by a federal, state, or local government.
The first two weeks of leave provided by the FMLA expansion are unpaid, but the employee can elect to use any paid vacation, personal, medical, or sick time off (including time off provided by the EPSLA) to make these first two weeks off paid. The employer must begin paying the employee after the first two weeks.
What are the limitations on the requirements of the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act?
The EPSLA and EFMLEA are subject to a number of important limitations, which can be split into distinct categories: employer size, monetary amount, length of time, and occupational factors.
(A) Employer size limits for the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
Both the EPSLA and EFMLEA are inapplicable to employers with 500 or more employees. Also, the Secretary of Labor has the option of issuing regulations to exempt employers with under 50 employees whose businesses may be jeopardized by providing paid sick leave under either the EFMLEA or scenario 5 of the EPSLA above (caring for children who are home from school). Finally, employers with fewer than 25 employees may be allowed to replace employees in certain circumstances including those who use the EFMLEA.
(B) Monetary limits on the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
The monetary limits on paid sick leave under the EPSLA are based on the reason for the leave. Under scenarios 1-3 listed above, pay for each day off is limited to the lower of the employee’s typical daily wages or $511 (for a total limit of $5,110 over all available 10 days off). In scenarios 4-6, pay for each day off is limited to the lower of 2/3 of the employee’s typical daily wages or $200 (for a total limit of $2,000 over all available 10 days off). The pay for each day off under the EFMLEA is always similarly limited to the lower of 2/3 of the employee’s typical daily wages or $200. The total pay available under the EFMLEA is limited to $10,000, however.
Importantly, the typical daily wages of employees are calculated by multiplying the employee’s normal hourly rate by the number of hours the employee would otherwise be scheduled to work. If the number of hours worked per week varies significantly, the employer must use the average hours worked over the past 6 months, but the hours used to pay employees with relatively fixed schedules are based on the employer’s current schedule for that employee.
(C) Time limits on the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
Only 10 days of paid time off are available under the EPSLA (2 weeks, assuming a normal weekend schedule), but 12 weeks of time off are available under the EFMLEA, the last 10 of which must be paid.
(D) Occupational limits on the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.
Both the EPSLA and the EFMLEA contain exemptions for healthcare providers and emergency responders if the employer chooses not to participate.
More broadly, however, both acts are only applicable if the employee is unable to work or telework. Therefore, even if the employee is otherwise eligible for benefits under either act, if they are able to telework (i.e. they are fully able to work and aren’t either sick themselves or too busy caring for a family member), they cannot demand paid sick time off under either act.
Who pays for the time off required by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?
While employers are required to initially pay employees under both the EPSLA and EFMLEA, these payments act as credits towards the employer’s payment of payroll taxes each quarter. If the employer’s payment is more than its entire payroll tax obligation for that quarter, the extra is refunded at the end of the quarter, but the Secretary of the Treasury announced it will also release a claim form for expedited advance payments for such employers. More information will be issued as it becomes available.
This credit is also increased by employers’ costs of providing a group health plan, to the extent such costs can be attributed to the paid sick time off qualified under the EPSLA or EFMLEA.
Are there any notice requirements under the Families First Coronavirus Response Act?
Both employees and employers have notice responsibilities under the FFCRA. Employees must provide notice to their employers before taking the paid sick leave provided in the EFMLEA if it is foreseeable. After an employee takes paid sick time off under the EPSLA, the employer may also require the employee to follow reasonable notice requirements to continue receiving paid sick leave under the EPSLA.
The Department of Labor has prepared a notice informing employees of their rights under the EPSLA (see hyperlink to this poster at the end of the fact sheet). Employers must post this notice in conspicuous location on their premises where notices are typically posted (see also hyperlinks for fact sheets at the end).
Do self-employed individuals receive any benefits under the Families First Coronavirus Response Act?
Self-employed individuals receive a similar benefit under both the EPSLA and EFMLEA as employees do, but the credit is against the individual’s income and self-employment taxes. The per day credits are still equal to the lower of $200 (or $511 in scenarios 1-3 under the EPSLA) or 2/3 of the individual’s average daily self-employment income (or 100% in scenarios 1-3 under the EPSLA). The average daily self-employment income is calculated by dividing the individual’s net self-employment income for the year by 260.
How do I find help?
The experienced attorneys at Gielow, Groom, Terpstra & McEvoy in Muskegon are following the Families First Coronavirus Response Act and related legislation and regulations closely as they are updated, so we are well-equipped to help answer any more questions you may have about this piece of legislation and subsequent legislation and regulations that are expected to follow.
In addition, the Department of Labor has issued the following fact sheets:
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