FAMILIES FIRST CORONAVIRUS RESPONSE ACT
In response to the coronavirus pandemic, Congress has passed, and the President has signed into law the Families First Coronavirus Response Act, 116 H.R. 6201 (FFCRA). This bill takes effect on or around April 1, 2020. Whether you are a sole proprietor or key decision maker for your company, you should be aware of the immediate impact this may have on you and your employees. The following are some important points to be aware of:
FAMILY MEDICAL LEAVE ACT
The Family Medical Leave Act (FMLA) has been modified to provide that employers with fewer than 500 employees must provide 12 weeks of FMLA leave for all employees who have been employed for 30 days or more for a “qualifying need related to a public health emergency.” COVID-19 or the “coronavirus” is currently defined as a public health emergency by both the Federal government and the state of Illinois.
The Secretary of Labor may issue regulations to exempt small businesses with fewer than 50 employees from the new FMLA provisions of the FFCRA when the imposition of such requirements would jeopardize the viability of the business as a going concern. This determination has not yet been made but should be clarified through regulations sometime in April 2020. We will keep you posted of any changes.
The term “qualifying need related to a public health emergency,” with respect to leave, means the employee is unable to work (or telework) due to a need for leave to care for a son or daughter under 18 years of age if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency.
The first 10 days of leave may be unpaid, but employees may opt to use accrued leave (PTO, vacation, sick time). Employers may not force employees to use accrued leave time.
After the first 10 days of leave, employers must continue to pay employees at a rate of no less than 2/3 of the employee’s regular rate of pay with a cap of $200 per day and $2,000 total pay for the duration of the leave.
Employers with fewer than 25 employees who are forced to close or eliminate positions due to the coronavirus epidemic are excepted from the FFCRA for displaced employees.
PAID SICK LEAVE ACT
The FFCRA also requires private employers with fewer than 500 employees to provide temporary sick leave to employees who are unable to work for a variety of different reasons related to the pandemic.
A formula to compensate employees is contained within the Act.
Part-time employees shall receive paid sick time during leave for the number of hours equal to the average number of hours they worked per day in the last 6 months.
Employers may not require employees to take any other accrued paid time off prior to using sick time granted under the FFCRA.
Paid sick time is available immediately, regardless of length of employment.
Under the FFCRA, the Department of Labor has the authority to issue regulations to exempt small businesses from paying sick time to an employee who is caring for a son or daughter whose school or place of care has closed, or whose childcare provider is unavailable, because of COVID-19 precautions if the imposition of such a requirement would jeopardize the employer’s ability to continue operating.
Employers are specifically prohibited from retaliating against any employee who takes leave or files any complaint or proceeding related to the FFCRA.
The FFCRA also requires employers to post notices of the requirements of the statute in conspicuous places on the employer’s premises. The DOL will create a posting of enactment for distribution.
An employer of an employee who is a healthcare provider or an emergency responder may elect to exclude such employee from the application of this section.
SMALL BUSINESS EXEMPTION
An employer with fewer than 50 employees (50 employees is generally the definition of a “small business”), is exempt from providing (1) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (2) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern as determined by an authorized officer of the business. In other words, a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if (1) the business has less than 50 employees; (2) leave is requested due one of the enumerated COVID-19 related reasons; and (3) an authorized officer determines that one of the enumerated conditions is satisfied.
TAX CREDITS FOR EMPLOYERS
The FFCRA includes terms that provide an employer with a refundable tax credit against payroll taxes for each calendar quarter in an amount equal to 100 percent of the qualified sick leave wages that the employer pays with respect to that calendar quarter.
BRE LAW CAN HELP
At BRE Law, we’re proud to help small businesses navigate these new laws and the uncertain economic landscape because of the global pandemic. If you would like to speak with an attorney regarding these laws or any other issue involving your business, please contact us.