Federal Families First Coronavirus Response Act (the “Family First Act” or “Act”) was signed on March 18, 2020. The Act’s employment provisions become effective no later than April 2, 2020 and last until December 31, 2020.
The Family First Act includes two leave components: paid sick leave and paid family and medical leave. The Act supplements employees’ rights under any other applicable federal, state or local law, and existing employer policy.
1. Paid Sick Leave:
Provides for up to 80 hours (or 10 days) of paid sick leave for a “qualifying reason” related to COVID-19.
Coverage:
Employees: all employees (regardless of tenure)
Employers: All private employers with less than 500 employees.
Exempt Employers: the Department of Labor is authorized to issue regulations to exempt:
- Employers with less than 50 employees where such leave would “jeopardize the viability of the business as a going concern” and
- Health care providers and emergency responders.
Qualifying Reasons:
Leave applies to all employees who cannot work or telework because the employee.
- Is subject to a COVID-19 federal, state, or local quarantine order
- Has been advised by a health care provider to self-quarantine due to COVID-19 concerns
- Is symptomatic and seeking a medical diagnosis.
- Is caring for an individual subject to a quarantine order or who has been advised by a health care provider to self-quarantine.
- Is caring for a son or daughter whose school/day care is closed, or whose childcare provider is unavailable due to COVID-19 precautions.
- Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Amount of Time
- Full-time employees: 80 hours (10 days) of paid sick time
- Part-time employees: equal to the average number of hours the employee worked over a two-week period.
- Employees with variable schedules: equal to the average number of hours worked per day over the previous six months. If the employee has not worked six months, it is the employee’s reasonable expectation at the time of hire of the average number of hours per day they would normally be scheduled.
Pay Rate
- Employee Illness, Symptomatic or Subject to Quarantine Order: if leave is used for reasons (1)-(3), employee’s regular rate or minimum wage, whichever is greater to a maximum of $511/day (and $5,110 in the aggregate).
- To Care for Another, Childcare or “Substantially Similar condition”: if leave is used reasons (4)-(6), the rate is no less than 2/3 of employee’s regular rate, to a maximum of $200/day (and $2,000 in the aggregate) or minimum wage, whichever is the greater.
Other Rules:
- Vesting? No. If it is a “qualifying reason”, paid leave is immediately available. No waiting period permitted.
- Carryover/payout? No. Leave does not carry over to following calendar year. Unused leave is not paid out at termination.
- Exhaustion of Other PTO? No. Employers may not require employees with a qualifying reason to use other paid leave first.
- Notice? After the first workday on leave, employers may require reasonable notice to continue leave.
2. New Family and Medical Leave Act (“FMLA”)
Provides up to 12 weeks of job-protected leave (including up to 10 paid weeks), to employees unable to work (or telework) only due to a COVID-19 school and child-care closing.
Coverage:
- All Employees who have been employed for at least 30 calendar days with no minimum number of hours worked
- All employers with fewer than 500 employees subject to exclusions.
- Exemptions: the Department of Labor is authorized to issue the same carve outs under the Paid Leave component for small businesses (fewer than 50 employees) and health care providers.
Qualifying Reasons
Applies to employees who are unable to work or telework only due to the need to care for the employee’s minor child whose school/daycare has been closed or whose childcare provider is unavailable as the result of a public emergency relating to COVID-19
Amount of Paid Leave
- The first 10 days may be unpaid (during which an employee may utilize otherwise accrued paid leave).
- After the tenth day, leave must be paid at a rate of at least two-thirds of the employee’s regular rate according to the number of hours the employee is normally scheduled to work, up to a maximum of $200 per day ($10,000 in the aggregate).
Reinstatement
Employees are to be reinstated to the same or an equivalent position with a carve out for small businesses. Employers with fewer than 25 employees do not have reinstate the employee if: (1) the employee’s position no longer exists due to conditions caused by a public health emergency during the leave, (2) the employer makes reasonable efforts to restore the employee to an equivalent position, but those efforts fail and (3) the employer makes reasonable efforts to contact the employee if an equivalent position becomes available for one year after the earlier of 12 weeks after the employee’s leave commences or the date on which the qualifying need to use leave concludes.
Notice: where this leave is foreseeable, employees must provide employers with notice of the need to use leave as practicable.
Tax Credits
Effective no later than April 2, 2020 and expiring on December 31, 2020, employers are entitled to a refundable payroll tax credit equal to 100 percent of the leave paid as sick leave or as enhanced FLMA, with certain caps. The tax credit is allowed against the employer portion of Social Security and Medicare taxes. Self-employed individuals are entitled to a refundable income tax credit.
Sick Leave Cap
The paid sick leave credit is equal to the wages actually paid, up to a maximum of $511 per day while an employee is on paid sick leave to care for themselves, and $200 per day if the employee is on paid sick leave to care for a family member or child. The credit is also limited to 10 days per employee. The credit is refundable to the extent it exceeds the amount the employer owes in payroll taxes.
FMLA Cap
The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. The paid FMLA credit is not available to employers already receiving a credit under the Tax Cut and Jobs Act. The credit is refundable to the extent it exceeds the amount the employer owes in payroll taxes.