You may have heard sound bites on the news, but how much do you really know about The Families First Coronavirus Response Act?
The Families First Coronavirus Response Act was signed into law on March 18, 2020, and will be effective on April 1, 2020. The Act aims to address the economic impact of COVID-19 on Americans. The Act, which remains in effect through the end of 2020, includes a package of laws that include free COVID-19 testing, an expansion of family and medical leave, emergency paid sick leave and employer tax credits.
Here are the key provisions.
Coverage for Testing for COVID-19
The Act requires private health plans to provide diagnostic testing of COVID-19 at no cost to the employee or others covered under the employee's health plan.
The Emergency Family and Medical Leave Expansion Act (EFMLEA)
The Act temporarily expands FMLA to include thousands of employers who weren't previously subject to this law and requires them to provide leave to employees for COVID-19 designated reason.
- The emergency act changes the FMLA eligibility threshold from employers with more than 50 employees to employers with less than 500 employees.
- The eligibility for employees to take EFMLEA is 30 days of employment with the company, unlike traditional FMLA, which is 12 months/1250 hours.
- The reason for emergency leave is to allow an employee who is unable to work or telework to care for the employee's child (under 18 years of age) if the child's school or place of care is closed or the childcare provider is unavailable due to a public health emergency.
- The first ten days of up to a 12-week leave may be unpaid, but an employee may elect to use accrued paid time off, including emergency paid sick leave as applicable, to cover this period.
- The employer may not require an employee to substitute any other leave before taking EFMLEA leave.
- After ten days, the employee will be paid leave based on an amount that is not less than two-thirds his/her regular rate of pay for the number of hours the employee would otherwise be normally scheduled to work for what remains of the 12 weeks.
- If an employee's schedule varies to the extent that an employer cannot determine the number of hours the employee would have worked, the number of hours will be the average hours worked per day for the prior six months. Or, if the employee worked less than six months, the employee's reasonable expectation at the time of hire regarding the average number of hours per day that they would normally have been scheduled to work.
- Pay entitlement is limited to $200 per day and $10,000 in the aggregate per employee.
- Employers with 25 or more employees would be required to reinstate employees after their FMLA period ends. Employers with fewer than 25 employees do not have to reinstate if they are experiencing significant economic hardship caused by the public health emergency during the period of EFMLEA but must make reasonable efforts to restore an employee for up to a year following the employee's leave.
- The Secretary of Labor has the authority to exempt employers with fewer than 50 employees if the provision of paid FMLA leave would jeopardize the viability of their business.
- Employers may exclude employees who are health care providers or emergency responders.
Emergency Paid Sick Leave Act (EPSLA)
The Act expands employer obligations for paid sick leave.
- Requires employers with less than 500 employees to provide 80 hours of paid sick leave (or for workers that work less than full time, the typical number of hours they are scheduled to work in a two week period), regardless of employee's duration of employment. This leave is in addition to any currently offered leave.
- Employers may exclude employees who are healthcare providers or emergency responders.
- Unlike EFMLEA, an employee is immediately eligible for this leave (there is no 30-day requirement).
- The employee is to be paid his/her regular rate for issues related to self (not to exceed $511 per day and $5,110 in the aggregate) but at a two-thirds rate for care of others or due to child school/place of care closing (not to exceed $200 per day and $2,000 in the aggregate).
- The employee is able to take EPSLA if they are:
- Subject to a federal, state, or local quarantine or isolation order related to COVID-19
- Advised by a health care provider to self-quarantine due to COVID-19 concerns
- Experiencing COVID-19 symptoms and seeking a medical diagnosis
- Caring for an individual (not limited to a family member) subject to a federal, state, or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns
- Caring for the employee's child when the school or place of care has been closed, or the child care provider is unavailable due to public health emergency
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
- The employer may not require the employee to use other paid leave options before using federal sick leave and may not retaliate against any employee.
- The federal paid sick leave does not carry over into the next year, and unless extended, the federal paid sick leave expires December 31, 2020.
Tax Credits for Paid Family and Medical Leave and for Paid Sick Leave
The Act provides payroll tax relief for wage payments made by employers that are required to offer paid sick and paid family leave. Employers will be reimbursed if their costs for qualified sick or family leave wages exceed the taxes they owe. We are currently awaiting further guidance on this measure and will communicate an update as soon as it's available.