On March 18, 2020 the Families First Coronavirus Response Act (FFCRA) was passed into law. The FFCRA contains extensive provisions, including a number of employment and employee benefits related laws, a brief summary of which are provided below. If you have specific questions or concerns about how this Act applies to you or your business, please contact our Employment Law group.
This update relates specifically to the newly passed federal law. If you have questions about Maine laws, unemployment eligibility in Maine, or general employer advice please review our earlier employer update or contact Sarah Newell or Matt Raynes with specific questions. For more information on tax credits available under the FFCRA, please see our COVID-19 Tax Credit Advisory or contact Dan Pittman.
NOTICE: THIS INFORMATION IS SUBJECT TO CHANGE BASED ON AMMENDMENTS TO FFCA IN THE CARES ACT AND DOL OR IRS GUIDANCE AND RULES AS THEY ARE PUBLISHED.
Importantly, it is crucial to convey to your employees that coverage of testing for COVID-19 must be provided at no cost to the consumer and that COVID-19 illness will be covered by two weeks of paid sick leave. It is in the interest of all employers and their continued business operations to ensure that sick employees stay home from work and that anyone exhibiting symptoms should seek medical advice immediately without fearing the cost of tests or the loss of income related to COVID-19. This includes diagnostic testing, costs of providers, urgent care center or emergency room visits for testing. Employers will receive a tax credit for paid sick leave and FMLA leave provided under this bill.
The FFCRA also includes provisions relating to spending appropriations for the COVID-19 emergency, as well as nutrition waivers, and other budgetary effects. If you have employees who may be eligible for these programs, particularly while they may be out of work or working limited hours due to COVID-19, additional resources may be available to them.
The Emergency Family and Medical Leave Expansion Act requires all employers with fewer than 500 employees to provide employees who have been working for at least 30 days the right to take up to 12 weeks of FMLA leave to care for the employee’s minor child if the child’s school or place of care has been closed or is unavailable due to COVID-19 and the employee is unable to work or telework.
The first 10 days of FMLA time under this law may be unpaid, unless the employee elects to use either the two weeks of paid sick leave available under the FFCRA or other accrued paid time off. Employers may not force employees to use accrued paid time off for FFCRA related leave. Following the first two weeks and for the duration of the FMLA eligible time off the employee will receive no less than two-thirds of the employee’s usual pay up to a cap of $200 per day or $10,000 total.
When the need for leave is foreseeable, employees must provide their employers with reasonable notice.
Exemptions exist for health care providers and emergency responders. There is also a narrow special exception to the usual FMLA job-protected status during leave for employers with fewer than 25 employees who meet specific requirements.
Emergency Paid Sick Leave Act
Employers with fewer than 500 employees and all government employers must provide all employees – full time and part time – two weeks of paid sick leave, paid at the employee’s regular rate of pay, 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 subparagraph (1) or has been advised as described in paragraph (2).
- 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.
- 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.
Full time employees are entitled to 80 hours of pay and part-time employees are entitled to the average number of hours they typically would work in a two week period. Part-time employees working varying schedules are entitled to the average number of hours worked per week in the prior 6 month period; if the employee has not worked for the prior 6 months, then they are eligible for the number of hours the employee reasonably expected to work at the time of hiring. Furthermore, employees who work under a multiemployer collective bargaining agreement must be provided with leave.
The FFCRA requires employers to pay eligible employees on COVID-19 related paid leave at the following rates:
| Reason for Leave | Daily Pay Rate | Aggregate Pay Cap |
|---|---|---|
| Employee ordered to quarantine or isolate | Regular rate of pay. Cap of $511 per day | $5,110 total. |
| Employee recommended to self-quarantine by a health care provider | Regular rate of pay. Cap of $511 per day | $5,110 total. |
| Employee experiencing COVID-19 related symptoms and seeking medical diagnosis | Regular rate of pay. Cap of $511 per day | $5,110 total. |
| Employee caring for another individual under quarantine or isolation order or under advice of healthcare professional | Two-thirds regular rate of pay. Cap of $200 per day. | $2,000 total. |
| Employee must care for child whose school or place of care has closed due to COVID-19. | Two-thirds regular rate of pay. Cap of $200 per day | $2,000 total. |
| 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. | Two-thirds regular rate of pay. Cap of $200 per day | $2,000 total. |
Please note, with the exception of the two-thirds pay rate indicated in the chart above, the rate of pay may not be less than the greatest of: (i) the employee’s regular rate of pay, (ii) the minimum wage rate in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)), or (iii) the minimum wage rate in effect for such employee in the applicable State or locality in which the employee is employed.
The two weeks of paid sick time is in addition to whatever paid sick time the employer already offered prior to the law being enacted, and employer may not require other accrued paid time off to be used before the mandated paid sick leave under this bill. The sick time mandated under this new law cannot carry over from one year to the next and must be available to all employees immediately, regardless of how long the employee has been employed for.
Additionally, employers are required to post this FFCRA employee rights poster in a conspicuous place on the employer’s premises.
The law comes with teeth – employers may not discriminate, discipline, or retaliate against employees who seek to take leave under this law, and willfully terminating an employee who tries to take leave under the law will result in penalties to the employer. Further, failure to pay sick leave will result in a violation for the Fair Labor Standards Act.
Emergency Unemployment Insurance Stabilization and Access Act of 2020
This Act provide states with substantial additional funding for unemployment benefits provided the state follows specific guidelines and rules. Employers should inform laid-off workers of their potential unemployment insurance eligibility.
Health Provision
Group health plans and health insurance insurers must provide coverage and not impose any cost sharing or prior authorizations for COVID-19 diagnosis products, office visits, urgent care center visits, and emergency room visits that result in an order for, or administration of, a diagnostic test. Further, there may not be any cost sharing for testing and testing services for those who are uninsured, covered by Medicare/Medicaid, CHIP, Tricare, veterans, federal civilians, or others not listed.
Tax Credits for Paid Sick and Paid Family and Medical Leave
Employers, including self-employed individuals, shall be eligible for a tax credit against the rate of tax imposed for each calendar quarter in an amount equal to 100% of the qualified sick leave and family leave wages paid by such employer with respect to such calendar quarter. The aggregate number of days taken into account for any calendar quarter shall not exceed the excess of 10, over the aggregate number of days so taken into account for all preceding calendar quarters.
The tax credit is designed to assist small and midsize businesses by providing an immediate and full dollar-for-dollar reimbursement for the cost of providing employees with COVID-19 related paid leave. Employers do not face payroll tax liability and health insurance costs are also included in the credit. The IRS has reported that employers should receive 100% reimbursement against for paid leave under the FFCRA as an immediate dollar-for-dollar tax offset against payroll taxes. Where refunds are owed, the IRS has stated that they will send refunds to businesses as quickly as possible. Details on the process for taking immediate advantage of the paid leave credits are forthcoming from the IRS.
Temporary Non-Enforcement Period
The Department of Labor has issued a temporary non-enforcement policy to allow employers 30 days after the Act takes effect on April 1 to come into compliance with the new law. According to the DOL, the Act will not be enforced against employers for the first 30 days “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 receives a written commitment from the employer to comply with the Act in the future.”
Small Business Exemption
The Act allows the Secretary of Labor “to exempt small businesses with fewer than 50 employees from the requirements of section 5102(a)(5) when the imposition of such requirements would jeopardize the viability of the business as a going concern.” DOL guidance on how this exception will be interpreted or applied is not yet available. As soon as guidance is available we will update.
DOL GUIDANCE
Additional guidance from the Department of Labor is available at the following links:
COVID-19 Resources:
Paycheck Protection for Small Businesses
Dealing with Debt: COVID-19’s Effect on Foreclosures, Bankruptcy, and Collections
COVID-19 and the Construction Industry
Delays and the AIA Owner – Contractor Agreements
Essential Businesses – Construction Industry
These materials have been prepared for general informational purposes only and are not intended as legal advice.