Families First Coronavirus Response Act

There have been a number of questions about the recently announced Families First Coronavirus Response Act. While the Act is yet to be finalized, please see below for a summary of the major provisions.Updated 3/23/2020 2:33pm ETEmergency Family and Medical Leave Expansion Act (EFMLEA)

  • Becomes effective on April 2, 2020, and is set to expire on December 31, 2020
  • Applies to all employers with < 500 employees
  • Small businesses with < 50 employees may be exempt from EFMLEA would jeopardize the viability of the business
  • The DOL has not yet issued the guidelines on the exemptions but should do so with a few days
  • Employees are eligible after 30 days of employment
  • At this time there is no distinction between full-time and part-time employees – only those employees who have worked at least 30 days
  • Between now and April 2nd, the employer’s PTO/vacation/sick pay policies still apply
  • This only applies to employees as of April 2nd. If the employer has laid off any of their employees prior to April 2nd, EFMLEA does not apply to former workers.
  • An employee can take leave under EFMLA when:
  • The employee is unable to work or telework due to the need to care for a son or daughter under the age of 18 or when the child’s school or daycare is closed due to the coronavirus
    • “Unable to work or telework” means that even if the employee has the tools to work from home but they have children at home making it difficult to actually work from home, they qualify for EFMLEA.
  • EFMLEA is unpaid for the first 10 days and the remaining days are paid with limits
  • The employee can use existing paid leave (vacation or PTO) but the employer cannot require this (unlike FMLA)
  • Employees can also use Emergency Paid Sick Leave (discussed below) for the 10 days of unpaid EFMLEA
  • After 10 days of unpaid leave expires, the employee will be paid 2/3 of regular salary or hourly rate
  • If the pay is irregular the employer can look back six months for the average number of hours worked per week
  • Maximum of $200 per day or $10,000 total – the remainder of the 12 weeks is unpaid
  • The employer is required to return the employee to work in the same or substantially similar position
  • Exception for an employer with < 25 employees
    • The position no longer exists because of economic or operating conditions caused by a public health emergency, AND
    • The employer makes reasonable efforts to restore the employee to an equivalent position within a one year period
  • The employer has a duty to contact the employee when an equivalent position becomes available

Emergency Paid Sick Leave Act

  • Becomes effective on April 2, 2020, and is set to expire on December 31, 2020
  • Applies to all employers with < 500 employees
  • Small businesses with < 50 employees may be exempt from EFMLEA would jeopardize the viability of the business
  • The DOL has not yet issued the guidelines on the exemptions but should do so with a few days
  • Employees are immediately eligible when the employee cannot work or telework:
  • Because the employee is subject to a federal, state or local quarantine or isolation order.
  • The employee has been advised by a health care provider to self-quarantine
  • The employee is experiencing symptoms of coronavirus and is seeking a medical diagnosis
  • The employee is caring for a person subject to a federal, state or local quarantine or isolation order or who has been advised by a health care provider to self-quarantine
  • The employee is caring for a son or daughter of the employee whose school or daycare is closed
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, the Secretary of the Treasury and/or the Secretary of Labor
  • Employers cannot require that employees take leave under existing policies first.
  • Full-time employees are entitled to 80 hours of paid leave
  • Part-time employees are entitled to be paid for the number of hours per day they worked on average over the prior two week period.
  • If the employee is subject to a federal, state or local quarantine or isolation order; the employee has been advised by a healthcare provider to self-quarantine or the employee is experiencing symptoms of coronavirus and is seeking a medical diagnosis,
  • The amount paid will be subject to a limit of $511 per day and a total of $5,110
  • If the employee is caring for a person who is subject to a federal, state or local quarantine or isolation order or who has been advised by a healthcare provider to self-quarantine; the employee is caring for a son or daughter of the employee whose school or daycare is closed, or the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, the Secretary of the Treasury and/or the Secretary of Labor
  • The amount paid will be subject to a limit of $200 per day and a total of $2,000

Tax Implications

  • Employers receive a refundable tax credit for qualified sick leave wages paid by the employer to the employee
  • The credit can be claimed quarterly equal to 100% of the amount of qualified sick leave wages (the $511 or $200 whichever situation applies)
  • Employers receive a separate refundable tax credit against payroll taxes
  • Limitation of $200 per day with a maximum of $10,000
  • The Act provides for similar refundable tax credits for self-employed individuals
  • The Act covers 100% of a self-employed individual’s sick leave equivalent amount (subject to requirements and limitations)
  • Refundable tax credit for family leave wages under the Act for self-employed individuals based on days unable to perform services (subject to requirements and limitations)

We will continue to update the provisions of this Act as they become available.