On March 18, 2020, President Trump signed the Families First Coronavirus Response Act. This was the second coronavirus-related act passed by Congress.
The Families First Coronavirus Response Act contains several important provisions, two of which are directly related to time off of work for employees related to COVID-19. The first, called the “Emergency Family and Medical Leave Expansion Act” substantially expands the federal Family and Medical Leave Act (FMLA) and provides for (mostly) paid FMLA leave. The second, called the “Emergency Paid Sick Leave Act” provides paid sick leave for many employees who otherwise may not receive such a benefit.
While both of these Acts provide for a significant amount of paid leave, the Families First Coronavirus Response Act also provides quarterly tax credits for employers (or reimbursement if costs exceed the tax credit) to cover the full cost of these benefits. Questions regarding how the tax credits and reimbursements will work go beyond the scope of this blog and should be directed to your CPA, accountant, or tax lawyer.
This blog addresses the Emergency Paid Sick Leave Act. Click here for my blog on the Emergency Family and Medical Leave Expansion Act.
Emergency Paid Sick Leave Act
This Emergency Paid Sick Leave Act takes effect on April 1, 2020 (NOTE: This date has been updated based on guidance issued on 3/24/20 by the Department of Labor), and will remain in effect through December 31, 2020, requires employers to provide paid sick time to an employee who is unable to work (or telework) for one of the following reasons related to COVID-19:
(1) The employee is subject to a quarantine or isolation order related to COVID–19.
(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
(3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to a quarantine or isolation order or has been advised by a health care provider to self-quarantine [note, this appears to not be limited to caring for a family member]
(5) The employee is caring for a child of the employee whose school or place of care has been closed or is unavailable due to COVID–19 precautions.
(6) The employee is 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.
* All employees are eligible for paid sick leave under the Act, without regard to how long they have been employed by the employer.
* Covered employers include any private-sector business engaged in commerce or in any industry or activity affecting commerce (which includes almost every business) that employs less than 500 employees.
* An employer of an employee who is a health care provider or emergency responder may elect to exclude such an employee from these sick leave requirements.
Amount of Paid Sick Leave
Full-time Employees: 80 hours of paid sick leave
Part-time Employees: The number of hours equal to the number of hours the employee works, on average, over a two week pay period. If hours vary from week to week to the point that an employer cannot determine with certainty the number of hours, then pay should be based on the average number of hours the employee was scheduled per day over the 6-month period ending on the date on which the employee takes paid sick time. If the employee did not work over the six-month period, then pay is based on the reasonable expectation of the employee at the time of hiring of the average number of hours the employee would normally be scheduled to work.
* An employer may not require an employee to use other paid leave provided by the employer before using the paid sick leave provided under this Act.
* Paid sick leave under this Act does not need to carry over from one year to the next.
* There is no obligation to pay for unused sick leave under this Act to an employee upon the employee’s termination, resignation, or other separation from employment.
Rate of Pay
If the employee is using paid sick leave for himself or herself (reasons 1 – 3 above), then the employee must be paid the employee’s regular rate of pay (or applicable minimum wage, if higher). If the employee is using paid sick leave for reasons 4 – 6 above, then the employee must be paid two-thirds of the employee’s regular rate of pay (or applicable minimum wage, if higher).
There is a cap on the amount of sick pay an employee can receive. If the employee is using paid sick leave for himself or herself (reasons 1 – 3 above), then the cap is $511 per day and $5,110 in the aggregate per employee. If the employee is using paid sick leave for reasons 4 – 6 above, then the cap is $200 per day and $2,000 in the aggregate per employee.
Employer Notice Requirement
Employers are required to post a notice containing the requirements of this Act in a conspicuous location where notices to employees are customarily posted. UPDATE: On 3/25/20, the Secretary of the Department of Labor issued the required poster, which can be found here: DOL FFCRA Poster.
Employee Notice Requirement
After the first workday (or portion thereof) that an employee receives paid sick time under this Act, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.
Penalties for Violation
An employer that fails to comply with the Act shall be considered to have failed to pay minimum wages required under the Fair Labor Standards Act (FLSA) and shall be subject to the penalties provided in the FLSA.
Relationship to Other Leave Entitlements
This Act does not diminish an employee’s right to paid sick leave under applicable Federal, State or local law, a collective bargaining agreement, or an existing employer policy.
Secretary of Labor Authority to Exclude Certain Employees
The Secretary of Labor can issue regulations to exclude certain healthcare providers and emergency responders from those employees eligible for paid sick leave, and to exempt businesses with less than 50 employees from the requirement to provide leave for reason 5 above (child care), if providing such leave would jeopardize the viability of the business as a going concern.