On March 18, 2020, President Trump signed the Families First Coronavirus Response Act into law and most portions of this new law go into effect 14 days from that date. Here are perhaps the 2 most significant parts of this new law, applicable to most employers with fewer than 500 employees (and certain covered public sector employees):
- Emergency Family Leave: Eligible employees, those who have been employed at least 30 days, will be able to take up to 12 weeks of job-protected leave due to an inability to work (or telework) so as to care for a minor (under 18 years of age) child if the child’s school or place of child care is closed or unavailable due to a public health emergency. The first 10 days of leave can be unpaid, but the employer must provide paid leave for the remaining 10 weeks of leave, paid at two-thirds of the employee’s regular rate. This leave will be available to employees at present through the end of 2020. Employers may not require employees to use other paid leave prior to using paid sick time.
Importantly, this part of the law (but not the below “other part”) will likely exempt businesses having fewer than 50 employees, but those regulations are not yet final.
- Emergency Sick Leave: All employees are immediately eligible (as of 14 days from now) for paid sick leave due to any of the following reasons:
- the employee is subject to a governmental quarantine order for COVID-19;
- the employee has been advised by a health care provider to self-quarantine for COVID-19 concerns;
- the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- the employee is caring for someone who is subject to a governmental quarantine order or who has been advised by a health care provider to self-quarantine, for COVID-19 concerns;
- the employee is caring for a child whose school or child care center has been closed due to COVID-19;
- the employee is experiencing any other substantially similar conditions specified by the US Secretary of Health and Human Services.
Full-time employees are eligible for 80 hours of leave and part-time employees are eligible for their average hours worked in a two week period. This leave must be paid at the employee’s full “regular rate” (as defined by labor laws) if the reason is i) through iii) above and at 2/3 of the regular rate if the reason is iv) through vi) above. This leave presently will be available to employees through December 31, 2020. Paid sick time does not carry over from one calendar year to the next, and employers are not required to pay out unused time at an employee’s termination.
The paid leave provided by this law is in addition to any paid leave your company already provides. It cannot be combined with your current leave policies and your current leave policies cannot be revised after the passage of the law to avoid these additional leave obligations. However, once the reason for the leave ends, so does this new leave entitlement.
If the reason for paid sick leave is i) through iii) above, the employee need not be paid more than $511/day or $5,110 total; if the reason is one of iv) through vi) then the employee does not need to be paid more than $200 per day, or $2000 total. If the employee does not have set hours, then paid sick leave is based on that person’s average number of hours over the 6-month period prior to his/her using this leave.
Certain employed healthcare providers may be excluded from these new provisions, but that will apply as clarifying regulations are issued by the US Department of Labor.
Very importantly too, the new law includes significant tax credits against current employer social security taxes paid to offset these new cost to companies. For each dollar of paid leave under the new law paid in a calendar quarter, companies can take a credit against social security taxes paid in that same quarter. If your company pays more in paid leave than social security taxes, you will receive a refund check from the government for the overage.
The above is only a current and brief summary. Changes etc may still take place, including as noted above.