Summary of the Coronavirus Response Act

by | Mar 19, 2020 | Insight, News

Families First Coronavirus Response Act (“FFCRA”) Summary

President Trump signed the Families First Coronavirus Response Act into law March 18, 2020.  The Act generally applies to employers with fewer than 500 employees and will be effective April 2, 2020.  Employers need to take note of two main aspects of the Act: (1) new paid sick leave requirements, and (2) emergency expansion of the Family Medical Leave Act (FMLA).

Employers will pay the employee benefits under this law directly, but the Act provides some relief as refundable payroll tax credits.  The payroll tax credits are available through 2020 and charged against your 6.2% Social Security payroll tax for wages paid to employees while they take time off under the Act’s sick leave and family leave programs.  The payroll tax credit can be claimed on a quarterly basis, equal to 100% of the wages paid.   The credits are refundable if they exceed the amount you owe in payroll tax.

  • Mandatory Paid Sick Leave

Pursuant to the FFCRA, you must provide eligible employees with mandatory paid sick leave (“Mandatory Paid Sick Leave”).  There is no waiting period for this benefit; it applies immediately upon hire.

  • Eligibility for Time Off – Mandatory Paid Sick Leave may be used when the employee is unable to work (or telework) for any of the following reasons:
  1.  Employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2.  Employee is advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3.  Employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4.  Employee is caring for an individual who is subject to a government isolation or quarantine order or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  5.  Employee is caring for a son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of the son or daughter is unavailable due to COVID-19 precautions; or
  6.  Employee experiences a substantially similar condition specified by the U.S. Secretary of HHS.
  • Mandatory Paid Sick Leave Pay Period and Benefit
    • Mandatory Paid Sick Leave is calculated as follows:
      • Full-time employees – 80 hours per year; and
      • Part-time employees – the number of hours you work, on average, in a 2-week period.
    • Under Mandatory Paid Sick Leave, you must pay the employee’s regular rate of pay for the number of regularly scheduled hours during the days missed, but shall not exceed:
      • $511 per day if the absence is for reasons 1, 2 or 3 above, capped at $5,110; or
      • $200 per day if the absence is for reasons 4, 5, or 6 above, capped at $2,000.
    • Employees cannot be required to exhaust other available paid time off, such as sick or vacation pay, prior to using Mandatory Paid Sick Leave. After exhausting available Mandatory Paid Sick Leave, employees may use any other available, accrued paid time off for absences thereafter.  Employees are not entitled to payment for any unused Mandatory Paid Sick Leave upon separation from employment and Mandatory Paid Sick Leave does not carryover at the end of the calendar year.

Mandatory Paid Childcare Leave

  • Starting April 2, 2020, and continuing through December 31, 2020, an employer with fewer than 500 employees must provide up to 12 weeks of paid, job-protected Mandatory Paid Childcare Leave (“Childcare Leave”) to eligible employees to care for the employee’s child when the child’s school is closed, or a childcare provider is unavailable as a result of COVID-19. There may be an exception for businesses with fewer than 50 employees in the future, but that is not in effect as of now.
  • Eligibility – Employees must work for you for at least 30 days to qualify.
  • Reason For Leave – Childcare Leave may be used if the government declares a public health emergency (like Ohio has), and the employee is unable to work (or telework) in order to care for the employee’s child when the child’s elementary or secondary school is closed, or a childcare provider is unavailable as a result of COVID-19.
  • Length of Leave – The maximum amount is 12 workweeks in any 12-month period. However, if both parents work for you and are eligible for leave, the parents will be limited to a total of 12 workweeks off between the two of them. Also, there is no intermittent leave; whatever number of weeks are utilized by an employee must be continuous, up to the 12-week maximum.
  • Unpaid Leave – The first 10 workdays of Childcare Leave are not paid; however, the employee can use any available accrued paid time off, vacation pay or sick pay during that time.
  • Paid Leave – Starting day 11 and through the remainder of the leave, you must pay the employee at a rate equal to two-thirds (2/3) of the employee’s regular rate of pay for the number of hours the employee would have regularly worked on each day missed; not to exceed $200 per day or an aggregate of $10,000.
  • Notice – All employees requesting Childcare Leave must provide you with notice of leave as soon as practicable. Once Childcare Leave has begun, you may require the employee to follow reasonable notice procedures to provide updates on the employee’s status. 
  • Employer Notice – You must post a notice of Childcare Leave as soon as the appropriate form is published by the Secretary of Labor.
  • Job Reinstatement – At the expiration of the leave, you must reinstate employees to the same position they held at the time of the leave or to an equivalent position as if they had been continuously employed. However, if you have fewer than 25 employees, you do not have to reinstate the employee if COVID-19 eliminates the employee’s position (but you still must make reasonable attempts to rehire the employee for one year following the employee’s leave) or if you go out of business.
  • Multi-Employer Bargaining Agreements – Paid leave provided under a multi-employer collective bargaining plan will count toward the requirements of Paid Childcare Leave.

Nondiscrimination – You cannot discriminate against employees for using Childcare Leave or Mandatory Paid Sick Leave.

Conclusion

  • We will keep you informed as more information becomes available due to the Act’s rapidly moving law-making process. Employers with fewer than 500 employees must prepare to implement these policies because they are to begin on April 2, 2020.  Please call us if you have questions.
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