On March 18, 2020, the U.S. Senate passed H.R. 6201, the Families First Coronavirus Response Act (FFCRA). This legislation is part of an initiative to focus on the anticipated social impacts and economic toll of the COVID-19 pandemic. Key provisions include emergency paid leave time for certain workers, unemployment insurance benefits and employer tax credits among other provisions.
Under the FFCRA, which will be in effect from April 1, 2020 through December 31, 2020, eligible employees are defined as those who work for employers in the private sector with fewer than 500 employees.
The FFCRA relief package includes two distinct provisions that provide emergency leave to employees: (1) the Emergency Paid Sick Leave Act (“EPSLA”); and (2) the Emergency Family and Medical Leave Expansion Act (“EFMLEA”).
Emergency Paid Sick Leave Act (EPSLA)
FFCRA requires that certain employers provide their employees with emergency paid leave that includes up to two weeks (80 hours) of paid sick time if the employee is unable to work or telework for one or more of the qualifying reasons stated by the Department of Labor:
- Is subject to a federal, state, or local quarantine* or isolation order;
- Has been advised by a health care provider to self-quarantine;
- Is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
- Is caring for an individual subject (or advised) to quarantine or isolation;
- Is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions; or
- Is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services.
*Official quarantine must be advised by listed official. Those adhering to “Stay at Home” directives and have not sought medical advice from a health care provider do not meet EPSLA eligibility requirements.
Emergency Family and Medical Leave Expansion Act (EFMLEA)
The EFMLEA allows employees 12-weeks of job-protected leave if an employee is unable to work or telework because the employee is needed to care for their child (under the age of 18) due to school or childcare facility closure and unavailability in light of the public health emergency.
EFMLEA also lists that while the first 10 days of the leave may be unpaid, the remainder must be paid at no less than two-thirds of an employee’s regular rate of pay, not to exceed $200 per day and $10,000 in the aggregate (employees may choose to use previously available sick/vacation leave or paid time off – employers cannot require to utilize such leave, however). During this 10-day period, employees are also eligible to utilize their 80 hours of emergency paid sick leave (EPSLA).
Employer Tax Credits
Applicable businesses will be able to take advantage of new tax credits to offset new costs associated with paid emergency leave and sick leave benefits implemented under the bill, as well as providing credit for health plan expenses affiliated with emergency and sick leave wages. The FFCRA provides a refundable tax credit against the employer’s payroll tax deposit. The tax credits are equal to 100% of the amount an employer pays under the EFMLEA and the EPSLA up to a per employee cap.
Employers are limited to a refundable credit for wages paid pursuant to sick leave at two separate pay rates depending on the reason the person is unable to work:
1. If the employee is unable to work because the employee has Coronavirus symptoms or is in a Coronavirus quarantine, whether a self-quarantine or not, the employer’s tax credit is capped at the employee’s regular pay rate, up to $511 per day, for up to 10 days, or $5,110 total aggregate per employee; or
2. If an employee is unable to work because the employee is caring for a family member with Coronavirus or caring for a child because of school or childcare facilities closing and the closing is related to COVID-19, the employer’s tax credit is capped at the employee’s regular pay rate, up to $200 per day, for up to 10 days, or $2,000 total aggregate per employee.
To view the complete Families First Coronavirus Response Act (H.R. 6201) and for more information on emergency paid sick and medical leave qualifying reasons for employees, click here.
For more information on how Clearview Group can assist your business as it relates to Human Resources during this time of uncertainty, email Tina Miceli at: firstname.lastname@example.org.