On March 18, 2020, the President signed into law H.R. 6201, Families First Coronavirus Response Act (FFCRA). Among its provisions, which include an appropriation of federal funds to enhance the WIC Assistance program, supplement State unemployment insurance benefits, and provide certain tax credits, are two new laws that require employers to provide paid sick leave of up to two weeks, and paid family leave for up to 12 weeks due to the impact of COVID-19. Below is a summary of an employer’s obligations under the FFCRA, which is slated to take effect April 2, 2020:

Emergency Paid Sick Leave Act (EPSLA)

• Effective Date:  No later than 15 days from the date of enactment, which is April 2, 2020
• Expiration Date:  December 31, 2020
• Applicability:  Employers with less than 500 employees.  Note, however, that the Secretary of Labor has the “authority” to exempt small businesses with less than 50 employees when the payment of this sick leave “would jeopardize the viability of the business as a going concern.”  We do not yet have guidance on how this exemption would be applied.
• Eligibility:  All employees regardless of tenure.
• Requirements:  Employers must provide two weeks of paid sick leave to any employee unable to work or telework due to the following:

1. Government quarantine or isolation order related to COVID-19;
2. Doctor’s advice to self-quarantine due to COVID-19 concerns;
3. Employee experiencing symptoms of COVID-19 and seeking a medical diagnosis;
4. Employee’s need to care for someone who is subject to a quarantine, isolation order, or doctor’s recommendation to self-quarantine;
5. Employee’s need to care for a son or daughter who is home due to school or daycare closure related to COVID-19 concerns; or
6. Employee experiencing any other substantially similar condition specified by the Secretary of Health and Human Services (HHS)

• Amount of Paid Sick Leave:  For reasons 1-3 above, employers must pay 100% an employee’s regular rate of pay, or minimum wage, whichever is greater.  For reasons 4-6 above, employers must pay two-thirds of the employee’s regular rate of pay for up to two work weeks.
• Duration:  For full-time employees, employers must provide 80 hours of paid sick leave.  For part-time employees, employers must pay the average number of scheduled hours in a two-week period, or if the part-time employee’s hours are variable, the hours scheduled per day by taking the average over the most recent six months.
• Caps on Paid Sick Leave:  For reasons 1-3 above, the maximum sick pay is $511 per day and $5,110 total per employee.  For reasons 4-6 above, the maximum sick pay is $200 per day and $2,000 total per employee.
• Employee Notice Required:  As soon as practicable after the need for leave arises.  Employers may also require reasonable additional notices to continue providing paid sick leave.
• Exclusions:  Employers may exclude health care workers or emergency responders.
• Posted Notice:  By March 25, 2020, the Secretary of Labor will publish a model notice that employers must post in the workplace.
• Prohibitions:  Employers may not require an employee to find a replacement.  Employers are also prohibited from requiring employees to first use any accrued paid leave under its own policies.  
• Enforcement:  Unpaid sick leave under the FFCRA will be considered unpaid minimum wages under the FLSA and subject to the same fines.  Employers may not take any adverse employment action against anyone taking, seeking, or complaining about leave under the FFCRA. Penalties may include fines of up to $10,000 and six months imprisonment.
• Payroll Credit:  100% of paid sick leave wages will be offset or act as a quarterly credit against the employers quarterly IRS tax imposed, up to a maximum of all paid sick leave provided under the FFCRA, up to the daily maximums per employee, or the actual amount of the employer’s quarterly tax.  Same applies for self-employed individuals.

Emergency Family and Medical Leave Expansion Act (FMLA)

• Effective Date:  No later than 15 days from the date of enactment, which is April 2, 2020
• Expiration Date:  December 31, 2020
• Applicability:  Any employer with less than 500 employees.  Note, however, that the Secretary of Labor has the “authority” to exempt small businesses with less than 50 employees when the payment of this FMLA leave “would jeopardize the viability of the business as a going concern.”  We do not yet have guidance on how this exemption would be applied.
• Eligibility:  All employees employed at least 30 days.
• Requirements:  Employers must provide up to 12 weeks of FMLA leave to any eligible employee who is unable to work or telework due to a need for leave to care for a son or daughter under 18 if the school is closed, or the child care provider is unavailable, to due to a public health emergency.
• Amount and Duration of Paid FMLA Leave:  After the first 10 days of leave (which is unpaid but likely covered by the EPSLA above), employers must pay 2/3 of an employee’s regular rate of pay for all normally scheduled hours per day for up to 12 weeks.  For part-time employees, employers must pay the average number of scheduled hours in a two-week period, or if the part-time employee’s hours are variable, the hours scheduled per day by taking the average over the most recent six months.
• Caps on Paid FMLA Leave:  The maximum paid FMLA leave is $200 per day and $10,000 total per employee. 
• Employee Notice Required:  As soon as practicable after the need for leave arises. 
• Exclusions:  Employers may exclude health care workers or emergency responders.
• Posted Notice:  By March 25, 2020, the Secretary of Labor will publish a guidance for employers.
• Prohibitions:  Employers are prohibited from requiring employees to first use or substitute any accrued paid leave under its own policies; however, employees have the choice to first exhaust paid leave available under company policy.  
• Reinstatement:  Employers must reinstate the employee to the position held prior to leave, unless:
  • The employer has less than 25 employees; AND
  • The employee takes leave related to COVID-19, their position does not exist at the time they wish to return due to economic conditions or other changes in operations due to a public health emergency; AND
  • The employer makes reasonable efforts to reinstate the employee to an equivalent position with equivalent benefits, pay and other terms of employment; AND
  • If reinstatement efforts fail, the employer makes reasonable efforts to notify the employee of equivalent positions for one year after the date the need for leave ends, or 12 weeks after the employee takes leave, whichever is earlier.
• Tax Credit:  100% of paid FMLA leave wages will be offset or act as a quarterly credit against the employers quarterly IRS tax imposed, up to a maximum of all paid FMLA leave provided under the FMLA, up to the daily maximums per employee, or the actual amount of the employer’s quarterly tax.  Same applies for self-employed individuals.

Emergency Unemployment Insurance Stabilization and Access Act

• Effective Date:  No later than 15 days from the date of enactment, which is April 2, 2020
• Expiration Date:  December 31, 2020
• Relevant provisions:
  • Employers remain obligated under State law to provide notice of Unemployment Insurance (UI) benefits at the time of “separation of employment,” which may include a layoff (temporary separation) as well as termination
  • Eligibility criteria and waiting period for benefits will be eased to allow more individuals to qualify
  • Individuals are no longer required to search for work pending periods of unemployment
  • Charge-backs to employers are suspended if the business is affected by COVID-19 or mandatory closure
  • States will receive 100% federal funding for enhanced and extended UI benefits

Next Steps

As implementation of these rules begins, Congress is working on the next phase of its economic stimulus package, which promises an ever larger appropriation and assistance to help our citizens.  Legislation introduced today in the Senate would provide cash payments to families and grant tax relief to individuals and businesses in Congress’ third effort to stave off the economic effects of the coronavirus pandemic.  The Coronavirus Aid, Relief, and Economic Security Act, would authorize the Internal Revenue Service to pay out checks of up to $1,200 to individuals, increased by $500 for every child. The bill would also make a slew of tax changes, including delaying the April 15 tax filing deadline to July 15, pushing back estimated tax payments for corporations and deferring employers’ portions of Social Security taxes.

We will keep you updated as events unfold.