On March 18, President Trump signed into law the Families First Coronavirus Response Act (FFCRA, “Phase Two”). Certain provisions require private employers with fewer than 500 employees to provide paid sick leave and family medical leave to employees, and offers employers tax credits to comply. This law takes effect on April 2, 2020 and will continue through December 31, 2020.
How does this impact employers and employees?
Emergency Paid Sick Leave
The law requires employers with under 500 employees to provide paid sick leave to employees for any of the following reasons related to the coronavirus (COVID-19):
- Employee is subject to an order to quarantine from government, is advised by a healthcare provider to self-quarantine related to COVID-19, or is caring for a person subject to such order or advice
- Employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
- Employee is caring for children if school or childcare provider is unavailable due to COVID-19 precautions
- Sick leave payment is limited to two-thirds of the employee’s regular rate of pay when absent for this reason
- Any other substantially similar condition specified by the relevant federal agencies
Full-time employees are entitled to 2 weeks (80 hours) and part-time employees are entitled to the typical number of hours that they work in a typical two-week period.
Paid leave cannot exceed:
- $511 per day and $5,110 in the aggregate when the leave is driven by the employee’s own health or need to quarantine
- OR $200 per day and $2,000 in the aggregate when the leave is driven by the employee’s need to care for a quarantined family member or a child out of school
All employees are eligible for this paid sick leave regardless of their length of employment, and it must be made available for immediate use. An employer may not require that an employee use other personal time off (PTO) before using paid sick leave.
Emergency Family and Medical Leave
The FFCRA requires employers with under 500 employees to provide employees who cannot work (or telework) up to 12 weeks of leave in the case their child’s school is closed or their childcare provider is unavailable due to a public health emergency.
The first 10 days of this leave may be unpaid (due to the fact that Emergency Paid Sick Leave requires the first 10 days to be paid sick leave), however an employee may choose to use accrued PTO during this time.
After the initial 10-day period, employers must pay the employee in an amount not less than two-thirds of the employee’s regular rate of pay, calculated by of the number of hours the employee would otherwise be normally scheduled to work. Paid leave cannot exceed $200 per day and $10,000 in total.
Employees are eligible for this paid leave if they are unable to work or telework, and have been employed for at least 30 calendar days.
For employers with fewer than 25 employees, there is a narrow exception to the FMLA’s job reinstatement requirements. This exception will only apply under specific circumstances.
How will the government help businesses pay for this?
The FCCRA provides employers with tax credits towards the payments required under this new law:
- A paid sick-time payroll tax credit can be claimed on a quarterly basis (equal to 100% of the amount of sick leave wages paid):
- Credit is limited to $511 per day ($5,110 total) if employee takes time off to care for himself or herself. This matches caps from the Emergency Paid Sick Leave.
- Credit is limited to $200 per day ($2,000 total) if the sick leave is to care for a quarantined family member or a child out of school. This matches caps from the Emergency Paid Sick Leave.
- A separate payroll tax provision allows a 100% credit against the employer’s share of the payroll tax for each employee.
- Credit is limited to $200 per day ($10,000 per employee total) and matches the caps from Emergency Family and Medical Leave.
- In each case, the credits are refundable of it exceeds the amount the employer owes in payroll tax.