Put Families First Coronavirus Response Act To Work For You

The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020, takes effect on April 1, 2020 and expires on December 31, 2020. This email briefly summarizes those aspects of the Act applicable to employers with fewer than 500 employees. The key takeaways are that for COVID-19 related reasons, employees can receive up to 80 hours of paid sick leave and expanded paid child care leave when employees' children's schools are closed or child care providers are unavailable. Employers receive 100% reimbursement for paid leave pursuant to the Act; employers face no payroll tax liability. Self-employed individuals receive an equivalent credit.

EMERGENCY FAMILY & MEDICAL LEAVE
The Act amends the Family & Medical Leave Act (“FMLA”) by providing 12 weeks of job-protected leave for employees who have been on the job for at least 30 days, as follows:

• The emergency leave must be for an employee to quarantine due to exposure to or symptoms of coronavirus, to care for an at-risk family member who is quarantined due to exposure to or symptoms of coronavirus, or care for a child if the child’s school is closed or a child-care provided is unavailable due to the virus.
• The first ten (10) days of the leave may be unpaid (though the employee may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for unpaid leave), but the rest of the leave must be paid as follows: two (2) weeks of fully paid leave, and the remaining leave paid at two-thirds (2/3) the employee’s usual pay.
• Paid leave shall not exceed $200 per day and $10,000 in the aggregate.
• While employees taking this leave have the right to be reinstated in a position with equivalent pay and benefits, employers with fewer than 25 employees do not have to reinstate an employee if the position held by the employee when the leave commenced does not exist due to economic conditions or changes of operation that were caused by the public health emergency.
• Employees who are emergency responders or who work for health care providers may not be eligible for emergency FMLA.
• Employers with less than 50 employees can be exempted from the Act’s requirements when the imposition of such requirements would jeopardize the viability of the business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

EMERGENCY PAID SICK LEAVE
The Act also allows for paid sick leave for employees (the “Emergency Paid Sick Leave Act”) who are unable to work due to:

1. A governmental quarantine or isolation order related to COVID-19;
2. Advice from a health care provider to self-quarantine due to concerns related to COVID-19;
3. The employee experiencing symptoms of coronavirus and seeking a medical diagnosis;
4. A need to care for or assist an individual who is subject to a governmental quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
5. A need to care for a child whose school or place of childcare is closed or unavailable due to coronavirus.

Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer's business as a going concern.

Other highlights of the Emergency Paid Sick Leave Act include the following:

• Employers with fewer than 500 employees are required to provide up to 80 hours of paid sick leave for full time employees. Part-time employees can receive an amount equal to the number of hours the employee works on average over a two-week period.
• Employers may not require that employees use other paid leave time prior to using emergency paid sick time.
• Employers may not require employees who request paid sick leave to find a replacement to cover for their scheduled hours as a condition to grant the request.
• Sick time will not carry over after 2020.
• As with emergency FMLA, employers of health care providers and emergency responders may elect to exclude such employees from the application of the paid sick leave; and employers with less than 50 employees can be exempted from the Act’s requirements.
• This section of the Act makes it unlawful for an employer to discharge, discipline, or in any other manner discriminate against any employee:
(1) who takes leave in accordance with this Act, or
(2) has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act (including a proceeding that seeks enforcement of this Act), or has testified or is about to testify in any such proceeding.
• An employer who fails to provide sick leave as required under the Act shall:
(1) be considered to have failed to pay minimum wages in violation of section 6 of the Fair Labor Standards Act of 1938 and
(2) be subject to the penalties described thereunder with respect to such violation, including liquidated (double) damages for willful violations.
• As with other labor law posters, employers will be required to post notice of the Emergency Paid Sick Leave Act (to be provided by the Secretary of Labor) in a conspicuous place on the employer’s premises within seven (7) days from enactment.

TAX CREDITS AVAILABLE

Payroll Tax
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and Dec. 31, 2020. If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

Paid Sick Leave Credit
Employers who pay employees for emergency FMLA leave or sick leave under the Act are entitled to refundable tax credit taken against the employer’s share of certain employment taxes. The credits are limited up to $200 per day for up to 10 days for each employee who takes paid sick leave, but if the sick leave was for the employee’s own covered quarantine or isolation or for the time for the employee to receive his or her own diagnosis, the credit is limited to up to $511 per day.

Child Care Leave Credit
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee's regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Contact Us: This time of crisis requires everyone to be flexible – employers and employees – and employers must definitely check with their employment attorney to update their time off and sickness policies to reflect the changes imposed by the Act. Requirements are subject to a 30-day non-enforcement period for good faith compliance efforts. To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week. The bigger issue, and one which Congress may next have to address, is the slowing down of commerce and the lack of work in many sectors of the business community. How can our professionals help YOU? Send your questions to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Check our homepage for additional Coronavirus updates www.fuoco.com. If you would like the FFCRA poster, please email Susan at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .