On March 18, 2020, President Trump signed the “Families First Coronavirus Response Act” into law. The leave provisions go into effect April 2, 2020 and expire on December 31, 2020.
The following are the key provisions of the legislation that are likely to impact employers:
Emergency Paid Sick Leave Act
- Employers with fewer than 500 workers (and governmental entities) will have to provide employees who cannot work or telework with paid sick time off if the employee is: (i) an employee subject to a coronavirus quarantine or isolation order; (ii) an employee who has been advised by a health care provider to self-quarantine due to coronavirus concerns; (iii) an employee who is experiencing symptoms of coronavirus and is seeking a medical diagnosis; (iv) an employee caring for an individual described in (i) or (ii) above; (v) an employee caring for a child whose school or place of care is closed, or the regular child care provider is unavailable, due to coronavirus precautions; or (vi) an employee who is experiencing any other substantially similar condition specified by U.S. Department of Health & Human Services in consultation with the Treasury and Labor Departments.
- Exception: Healthcare providers and emergency responders are not required to provide paid sick leave to employees. Employees, who are laid off before the paid sick leave requirements are effective, will not be eligible for paid sick leave. However, paid sick leave requirements may apply to employees who were furloughed or placed on paid or unpaid leave prior to enactment. Further guidance is anticipated.
- Full-time employees are to receive two weeks (80 hours) of sick leave, and part-time workers are granted leave equivalent to their average hours worked in a two-week period, with the sick leave in either instance being available for immediate use regardless of the employee’s tenure at the employer.
- Paid sick time will not carry over from year to year.
- Workers taking leave for themselves will have to be paid at least their normal wage or the applicable federal, state, or local minimum wage, whichever is greater. Workers taking time off to care for family members must be paid at two-thirds of the employee’s regular rate of pay. Sick leave is capped at $511 per day and $5,110 in the aggregate for leave taken in categories (i) through (iii) described above (i.e., on one’s own behalf), and capped at $200 per day and $2,000 in the aggregate for leave taken in categories (iv) through (vi) (i.e., to take care of another).
- Wages required to be paid under the emergency sick leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.
- Employers with existing paid leave policies will be required to provide workers with the sick leave under this emergency program. An employer cannot require a worker to use any other available paid leave before using the sick time.
- Employers are prohibited from (i) requiring workers to find replacements to cover their hours during time off; or (ii) discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer related to such.
- Employers will have to post a notice containing information regarding the emergency sick leave provisions; the Labor Department is to create a model notice no later than seven days after the Act is enacted.
- The Department of Labor will be authorized to issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern”, and (iii) ensure consistency between the emergency sick leave provisions and emergency family leave provisions described below.
- Workers under multiemployer collective bargaining agreements whose employers pay into pension plans will have access to paid emergency leave.
Emergency Family Leave Act
- Employers with fewer than 500 workers (and governmental entities), will have to provide up to 12 weeks of FMLA leave for employees who have been on the job for at least 30 days, and who are unable to work or telework because they have to care for a minor child if the child’s school or place of care has been closed, or if the child care provider of that child is unavailable due to a coronavirus emergency.
- An employer of an employee who is a health care provider or an emergency responder may elect to exclude the employee from the emergency family leave provisions.
- The first 10 days of leave can be unpaid (a worker could opt to use accrued vacation days or other available paid leave for those days). For subsequent days of leave, workers will receive a benefit from their employers equal to at least two-thirds of their normal pay rate. The paid leave is capped at $200 per day and $10,000 in the aggregate.
- Generally, the employee on leave must be restored to his or her prior position; however, this requirement does not apply to employers with fewer than 25 employees if the position held by the employee on leave no longer exists due to economic conditions or other changes in the employer’s operating conditions caused by the coronavirus pandemic, and the employer makes reasonable efforts to restore the employee to an equivalent position.
- Wages required to be paid under the emergency family leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.
- The Department of Labor will be authorized to issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, and (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
- Workers under multiemployer collective bargaining agreements whose employers pay into pension plans will have access to paid emergency leave.
Requirements for Group Health Plans:
Group health plans and health insurers must cover, may not impose any cost sharing, (deductible, copayments and coinsurance) for, and may not impose prior authorization or medical management requirements on the following:
- FDA approved products used to test for COVID-19 and the administration of such products
- Items and services furnished to an individual during visits to a health care (including telehealth), urgent care center , or emergency room that result in COVID-19 testing
These provisions are effective on the date of enactment and expire when the Secretary of Health and Human Services determines that the emergency has ended.
Employer Tax Credits
There are tax credits allowed for qualified family leave wages paid. Credits are subject to caps and limitations. The US. Department of Treasury will issue guidance. Please consult with your firm’s Tax Counsel / Payroll Provider for specifics.
We expect additional guidance from the U.S. Department of Labor, specifically on how the 500-employee thresholds are determined and the Notice, which will be required to post consistent with other labor law posters. Please contact your Sentinel Client manager for any questions.
For more news and information regarding COVID-19, please see our COVID-19 Resources page.
