Employee Rights
Paid Sick Leave and Expanded Family and Medical Leave Under the Families First Coronavirus Response Act
The Families First Coronavirus Response Act (FFCRA), which takes effect April 1, will give all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.
The legislation will ensure that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus while at the same time reimbursing businesses.
The three major components of this bill that will affect businesses of all sizes include:
Emergency Family and Medical Leave
Tax Credits
Emergency Paid Sick Leave (corrected 3.31.20 source Department of Labor)
The bill requires employers to provide each employee with employer-paid sick time to the extent the employee is unable to work (or telework) because:
Qualifying Reasons for Leave:
Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
- is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- has been advised by a health care provider to self-quarantine related to COVID-19;
- is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
- is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
- is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.
Duration of Leave:
For reasons (1)-(4) and (6): A full-time employee is eligible for 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.
For reason (5): A full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family & medical leave) at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
For leave reasons (1), (2), or (3): employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
For leave reasons (4) or (6): employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
For leave reason (5): employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period).
[4]
[1]
Certain provisions may not apply to certain employers with fewer than 50 employees. See Department FFCRA regulations (expected April 2020).
[2]
Under the Act, special rules apply for Health Care Providers and Emergency Responders.
[3]
Paid sick time provided under this Act does not carryover from one year to the next. Employees are not entitled to reimbursement for unused leave upon termination, resignation, retirement, or other separation from employment.
[4]
An employee may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for the first two weeks of partial paid leave under this section.
Emergency Family and Medical Leave
The provision expands the existing Family and Medical Leave Act (FMLA) requirements until Dec. 31, 2020. This generally applies to all employers with fewer than 500 employees, and applies to employees who have been employed at least 30 calendar days.
Subsequent changes in the House have significantly limited qualifying events, so that only employees who are unable to work (or telework) due to a need to leave to care for their son or daughter under the age of 18 if their school is closed or child care is unavailable due to COVID-19 qualify.
The Secretary of Labor will be granted the authority to issue regulations to exempt small businesses with fewer than 50 employees from these requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
The first 10 days for which an employee takes leave under this section may consist of unpaid leave. Employees elect to substitute any other available leave for the unpaid leave, but the employer may not require that.
After 10 days, the employer shall provide paid leave. Paid leave is calculated based on no less than two-thirds of an employee’s regular rate of pay and the number of hours the employee would otherwise normally be scheduled to work. However, pay is capped at $200 per day and $10,000 in aggregate per employee.
Tax Credits for Paid Sick Leave and Paid Family and Medical Leave
Employers will be allowed to claim a credit against their payroll taxes (specifically section 3111(a) of the Internal Revenue Code, the Old-Age and Survivors Insurance Trust Fund, commonly known as Social Security) an amount equal to 100% of the qualified sick leave wages paid by the employer, subject to the limits below.
Employers with group health plans may also be eligible for a credit claimed against the employer-paid health care costs while an employee is on leave.
Self-employed individuals also may qualify for tax credits. Under the bill, an eligible self-employed individual means an individual who regularly carries on a trade or business within the meaning of section 1402 of the Internal Revenue Code and would be eligible to receive either paid sick leave or FMLA leave if the individual were an employee of an employer (other than himself or herself).
Credit for Paid Sick Leave
Credit based on employees: For purposes of determining the credit for sick leave, the amount of qualifying sick leave wages may not exceed $511 per day for a maximum of 10 days. However, if the paid sick leave is used to care for a family member or for a child whose school has closed or where childcare is unavailable, the amount of qualified sick leave wages eligible for the credit is capped at $200 per day.
If the credit exceeds the amount owed under section 3111(a) for any calendar quarter, the excess is refundable.
For self-employed individuals: The bill provides a credit equal to 100% of the qualified sick leave amount for eligible self-employed individuals who must self-isolate, obtain a diagnosis or comply with a recommendation to self-isolate due to coronavirus. Under these circumstances, the credit amount is capped at the lesser of $511 per day or the average daily self-employment income for a maximum of 10 days. The credit is reduced to 67% when caring for a family-member or for a child whose school or childcare is closed. Under these circumstances, the credit is capped at the lesser of $200 per day or the average daily self-employment income.
The credit is claimed against income taxes and is refundable.
Credit for Family and Medical Leave
Credit based on employees: The amount of qualified family leave wage taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the amount owed under section 3111(a) for any calendar quarter, the excess is refundable.
For self-employed individuals: The qualified family leave equivalent amount is capped at the lesser of $200 per day or the average daily self-employment income. The maximum number of days is 50.
Lastly, the bill creates a special rule such as any wages required to be paid for emergency family and medical leave or sick leave shall not be subject to payroll taxes under section 3111(a). That saves employers the 6.2% social security tax on eligible wages. The bill also grants an employer an additional tax credit against Medicare taxes paid.
