Background:
What is the Families First Coronavirus Act?
The Families First Coronavirus Response Act expands access to emergency paid sick leave to as many as 87 million U.S. workers. Many of these workers currently have no paid leave and are being forced to choose between their paycheck, their health, and the health of the people around them. The Act provides up to 2 weeks of Paid Sick Leave for employees to use for themselves or to care for a family member impacted by COVID-19. The Act provides Sick Leave to employees of employers with 500 or fewer employees and also provides extended leave for employees unable to work or telecommute due to school closures related to COVID-19 closures who work for employers with 50 or more employees.
When does the Act become Effective?
The Act becomes effective within 15 days of the President’s Signature (by April 2, 2020) the specific date will be determined by the Treasury Secretary. We will update the specific as soon as it becomes available.
Paid Sick Time:
How much Paid Sick Leave are employees entitled to under the FFCRA?
Full-time employees are entitled to up to 80 hours of sick time under FFCRA. Part-time employees are entitled to a number of hours equal to the number of hours that the employee works, on average, over a 2 week period.
What are the reasons an employee can use Paid Sick Leave under FFCRA?
An employee is eligible for paid sick leave under FFCRA if, due to COVID-19:
They’re subject to a Federal, State, or local quarantine
They’ve been advised by a health care provider to self-isolate
They’re experiencing symptoms of the illness
They’re caring for an individual who has been quarantined or advised to self-quarantine, or
They’re caring for a son or daughter whose school or place of care has been closed.
What is the amount of the sick time benefit an employee can receive under FFCRA?
Employees are entitled to 2 weeks, or 10 business days, of paid sick time. If the employee is a full-time employee, this is 80 hours. If the employee is a part-time employee, you determine the number of hours for which they’re eligible by calculating the average number of houses they work in a two week period.
How is this Paid Sick time compensated?
This sick time is provided by the employer, paid at the greater of the employee’s regular rate of pay, FLSA minimum wage, or applicable state or local minimum wage. The amount of pay is capped at $511 per day, or $5,110 in total if the employee is using the time for their own illness or quarantine. If the employee is using the time to care for another, the time is paid at 2/3 of the employee’s regular rate of pay, and the paid sick time is capped at $200 per day or $2,000 in total.
Does the Paid Sick time in this act carry over from year to year?
No, paid sick time in this act doesn’t carry over from 1 year to the next. This benefit expires on
12/31/2020.
Can an employer require the employee to find coverage for missed shifts while they’re using paid sick time?
No, and the employer can’t require that an employee try to find someone to cover their hours while they’re using sick time.
Can an employer require an employee to use their existing Paid Time O or Paid Leave before using paid sick time under FFCRA?
No, an employer can’t require an employee to use other paid leave provided by the employer before the employee uses paid sick time under FFCRA.
Does the bill exempt small businesses with fewer than 50 employees?
No, the bill does not exempt small businesses with fewer than 50 employees. Employees at these companies are eligible for emergency paid sick leave under this bill. Businesses with fewer than 50 employees can only qualify for a narrow exemption if the Department of Labor determines that providing these benefits would jeopardize the viability of the business
Paid Family Leave:
Which employers are required to offer this expanded FMLA under FFCRA?
This requirement applies to any employer who has 500 or fewer employees.
How much Paid Family Leave are employees entitled to under FFCRA?
Employees are entitled to 12 total weeks of FMLA under the FFCRA; the first two weeks may be unpaid and the remaining 10 weeks are paid at a rate of 2/3 the employee’s regular rate of pay.
Must the employees take the first two weeks unpaid? Can they substitute other paid time off during those weeks?
Yes, an employee may use accrued vacation leave, personal leave, sick leave, or other paid time, during this time
Which employees are eligible for this expanded FMLA?
Any employee who has been employed by the employer for at least 30 calendar days is eligible.
What are the reasons an employee can use FMLA under the FFCRA?
Employees are only able to use this expanded paid FMLA under FFCRA if they are unable to work, or unable to telework because they must care for a minor child whose school or place of care has been closed due to COVID-19.
What is the rate of pay for this paid FMLA?
This leave is paid at 2/3 of the employee’s regular rate of pay, for the number of hours the employee normally would have worked. This is limited to $200 per day or $10,000 in total.
Is this time job-protected as regular FMLA leave?
Yes, the employee’s job is protected during this leave, and the employee must be restored to the same or an equivalent position.
Are health care workers and emergency responders exempt from paid sick leave and paid family leave?
No, health care workers and emergency responders are eligible for paid sick leave and paid family leave under this bill. Given the capacity challenges facing the health care system, employers have the discretion to exempt health care workers and emergency responders from the paid sick and paid family leave provisions. The Department of Labor also has the authority issue regulations exempting health care workers and emergency responders from the paid sick and paid family leave provisions.
Who Pays for the Emergency Paid Family Leave and Paid Sick Leave?
Employers initially front the cost of emergency paid sick leave but will be fully reimbursed by the federal government within three months. The reimbursement will cover both the wages paid and the employer’s contribution to employee health insurance premiums during the period of leave. Employers will be reimbursed through a refundable tax credit that counts against employers’ payroll tax, which all employers pay regardless of non-profit/for-profit status. Employers will submit emergency paid sick leave expenses as part of their estimated quarterly tax payments. If employer’s costs more than offset their tax liability, they will get a refund from the IRS.
Tax Credit:
How will the credit be applied to my Payroll Taxes?
The credit can only be applied to the Employer’s portion of Social Security Taxes and is limited to the amount of the benefits provided to the employee plus the Employer’s portion of medical premiums associated with the leave payment.
How will the credit be reported?
IRS is in the process of developing guidance and any required updates to forms and will be working with the payroll industry during those efforts. We will continue to update our guidance and this FAQ as information becomes available.
What if I don’t have enough Employer Social Security tax to offset the sick pay and leave pay to employees?
The credit is refundable. Any amounts that cannot be applied to the current period’s portion
of Employer, Social Security tax will be refunded on a quarterly basis.
**Please contact us at info@hcmunlocked.com to discuss specific impacts on your organization at no cost.
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