Virtus Law, PLLC is providing this quick update regarding the Families First Coronavirus Response Act, including commonly asked FAQ’s for businesses.
The Families First Coronavirus Response Act included a lot of legislation; but the most important section of the Act related to two types of employee emergency leave for COVID-19, Emergency Paid Sick Leave and Emergency Family Medical Leave. Both types of leave apply to employers with fewer than 500 employees (subject to certain exceptions).
Emergency Paid Sick Leave
This type of leave under the act applies just to the individual employee himself/herself and provides for 10 days (80 hours) of paid sick leave (paid at the employee’s regular rate of pay). The leave applies to situations where the employee:
- Is subject to a federal, state, or local quarantine or isolation order related to Covid-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to Covid-19;
- The employee is experiencing symptoms of Covid-19 and seeking medical diagnosis.
- The employee is caring for an individual who is subject to a federal, state, or local quarantine order, or the individual has been advised to self-quarantine due to concerns related to Covid-19;
- The employee is caring for the employee’s son or daughter, if the child’s school or child care facility has been closed or the child’s care provider is unavailable due to Covid-19 precautions; OR
- The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and the Department of Labor.
The sick leave is paid at the employee’s full salary if the sick leave is due to reasons #1, #2, or #3 above and is capped at $511 per day. The sick leave is paid at two-thirds the employee’s usual rate of pay if taken for reasons #4, #5, or #6 above, and is capped at $200 per day ($2,000 total).
Emergency Family Medical Leave
Under this type of leave, an employer must provide up to 12 weeks of job-protected PAID leave for a “qualifying need related to a public health emergency” to employees who have been on the employer’s payroll for 30 calendar days.
“Qualifying needs” include:
- Adhering to a requirement or recommendation to quarantine due to exposure or symptoms of coronavirus;
- Caring for an at-risk member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; or
- Caring for a child of an employee if the child’s school or place of care has been close or the childcare provider is unavailable due to a coronavirus.
There is a 10-day waiting period before this benefit applies. Employees can use existing sick or vacation time to cover the 10-day waiting period, or use Emergency Sick Leave (if applicable). However, employers cannot force employees to use sick or vacation time to cover it (that time must be unpaid if the employee requests it). After the 10-day waiting period, employees will be paid for the leave in an amount equal to two-third of the employee’s usual rate of pay, with a cap of $200 per day and $10,000 total. Businesses should note that, although called Family and Medical Leave (FMLA), this leave is different from traditional FMLA leave required by law pre-COVID-19.
- Which employers are NOT subject to the EFMLA and ESL requirements?
The new law applies to private companies with fewer than 500 employees, including non-profit and religious organizations. There are certain exceptions for employers of (1) first responders; (2) healthcare providers; and (3) employers with less than 50 employees who demonstrate certain “hardship criteria” (see question #5).
- What kind of documentation does the employer need to receive in order to get the tax credit?
The employer must retain records and documentation related to and supporting each employee’s leave to substantiate the claim for the credits, and retain the Forms 941, Employer’s Quarterly Federal Tax Return, and 7200, Advance of Employer Credits Due to COVID-19, and any other applicable filings made to the IRS requesting the credit.
- Can an employee use Emergency Family Medical Leave intermittently?
Yes, but only with the employer’s permission. Intermittent emergency family medical leave should be permitted only when the employee and employer agree upon such a schedule. The Department of Labor encourages employers and employees to collaborate and achieve agreement, therefore, if employers and employees agree to intermittent leave on a day-by-day basis, the Department of Labor supports such voluntary arrangements.
- Does a 2 week waiting period apply to Emergency Family Medical Leave?
Yes, the first two week (usually 10 days) are unpaid. They employee may use (but is not required to use) any other form of available paid leave during those first 10 days, including PTO, sick leave, or emergency sick leave.
- What is the FMLA guidance on employers with less than 50 employees, and is it applicable to household employee?
The amended act covers private employers with fewer than 500 employees and certain public employers. Small employers with fewer than 50 employees may qualify for an exemption from the requirement to provide paid leave due to school, place of care, or childcare provider closings or unavailability, if the leave payments would jeopardize the viability of their business as a going concern.
This means that a business must show one or more of the following:
- Providing paid sick leave or expanded family and medical leave would result in expenses and financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
- The absence of the employee(s) requesting paid sick leave or expanded family and medical leave would substantially risk the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; OR
- There are not sufficient workers who are able, willing, and qualified, and available to work at the time and place needed, to perform the labor/services provided by the employee(s) requesting paid sick leave or expanded family and medical leave, and such labor/services are necessary for the business to minimally operate.
There are no formal filing requirements for this exemption currently and each business should not send any materials to the Department of Labor when seeking a small business exemption for expanded family and medical leave. However, records concerning how a business determined they qualify for this exemption must be kept for 4 years.