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The two first of the reasons for
taking the Paid Public Health Emergency Leave Under the
Family and Medical Leave Act were eliminated in the final version of the
bill. They are indicated in red
below. Sorry for the error.
March 20, 2020
Yesterday, President Trump signed into law, ''The
Families First Coronavirus Response Act'' (the law). It becomes effective in
15 days, (April 2, 2020). The key employment-related aspects of the law are
provided below.
The law
provides two leaves, Paid Sick Leave and Paid Public Health Emergency Leave
Under the Family and Medical Leave Act. The law only applies to employers
with fewer than 500 employees. Part-time employees are included in this count
to assess coverage. Further, the below provisions can also be affected by
specific state and local laws.
Paid Sick
Leave
Employers
with fewer than 500 employees will be required to provide full-time employees
with 2 weeks (80 hours) of paid sick leave for the following reasons:
* To
self-isolate because of a diagnosis of COVID-19, or to comply with a recommendation
or order to quarantine due to exposure or exhibition of symptoms;
* To obtain a medical diagnosis or care if the employee is
experiencing symptoms of the coronavirus;
* To care for a family member who is self-isolating due to a
diagnosis of coronavirus, experiencing symptoms of coronavirus and needs to
obtain medical diagnosis or care, or quarantining due to exposure or
exhibition of symptoms; or
* To care for a child whose school has closed, or childcare
provider is unavailable, due to the coronavirus.
Employers
must compensate employees for any paid sick time they take at their regular
rates of pay (unless the leave is being used to care for a family member or
child, in which case the employee is only entitled to two-thirds of his or
her regular rate of pay). The sick leave is available for immediate use by
employees, regardless of length of employment.
Additionally,
part-time employees are entitled to the number of hours of paid sick time
equal to the number of hours they work, on average, over a 2-week period.
Employers
who already provide paid leave to employees on the day before the law is
enacted must provide this paid leave in addition to any paid leave already
provided-and may not change their paid leave policies on or after the date of
enactment to avoid compliance. Finally, employers cannot require employees to
utilize other paid leave before using the paid leave provided by this bill.
This part of
the law would also expire on December 31, 2020.
Paid Public
Health Emergency Leave Under the Family and Medical Leave Act
Employees of
employers with fewer than 500 employees can be provided with the right to
take up to 12 weeks of public health emergency leave under the Family and
Medical Leave Act ("FMLA").
Ten of these
twelve weeks are be paid at a rate of no less than two-thirds of the
employee's usual rate of pay. (FMLA leave for all other purposes remains
unpaid.) The first two weeks will be paid by Paid Sick Leave above.
To be eligible for paid leave, employees must have been on the
employer's payroll for 30 days and may use emergency FMLA leave for the
following reasons:
* To adhere
to a requirement or recommendation to quarantine due to exposure to or
symptoms of coronavirus;
* To care for a family member who is adhering to a requirement or
recommendation to quarantine due to exposure to or symptoms of coronavirus;
and
Note: These reasons were in the House
version of the bill, but were eliminated by the Senate in the final version.
* To care for a child of an
employee if the child's school or place of care has been closed, or the
childcare provider is unavailable, due to the coronavirus.
The
first two weeks of leave may be unpaid; the employee may choose to substitute
accrued paid time off or other medical or sick leave during this period, but
an employer cannot require an employee to do so. After the first two weeks of
unpaid leave, employers must continue paid FMLA leave at a rate of no less
than two-thirds of the employee's usual rate of pay.
As with
traditional FMLA leave, this leave is job-protected and an employer must
return the employee to the same or equivalent position upon their return to
work. This new law outlines an exception for employers with less than 25
employees if the employee's job no longer exists due to the coronavirus
pandemic, which requires employers to make reasonable efforts to restore the
employee to an equivalent position over a one-year period.
The
Secretary of Labor has the authority to issue regulations exempting: (1)
certain health care providers and emergency responders from taking leave
under the bill; and (2) small business with fewer than 50 employees from the
requirements of the bill if it would jeopardize the viability of the
business.
This
amendment to the FMLA would expire on December 31, 2020.
Within seven
days from enactment, the Secretary of Labor will provide a model notice to be
posted in areas that are readily accessible to employees (e.g., kitchens and
breakrooms) regarding the law. I anticipate direct notice might also be
required in the form of an email or letter.
Tax Credits
for Paid FMLA and Sick Leave and Grant of $1 Billion Dollars for Emergency
Unemployment Insurance
A series of
refundable tax credits are for employers providing paid emergency sick leave
or paid FMLA. The credits are as follows:
A refundable tax credit for employers equal to 100 percent of qualified
family leave wages required to be paid that are paid by an employer for each
calendar quarter. The tax credit is allowed against the tax imposed the
employer portion of Social Security taxes. The amount of qualified family
leave wages taken into account for each employee is capped at $200 per day
and $10,000 for all calendar quarters. If the credit exceeds the employer's
total liability for Social Security taxes for all employees for any calendar
quarter, the excess credit is refundable to the employer.
A refundable
tax credit for employers equal to 100 percent of qualified paid sick leave
wages that are paid by an employer for each calendar quarter. The tax credit
is allowed against the tax imposed by the employer portion of Social Security
taxes (6.2% of wages).
One billion
dollars in grants to states for emergency unemployment insurance, half of
which would be transferred to the states within 60 days after the enactment
of the bill (so long as the state complies with certain requirements, such as
requiring employers to notify employees of the availability of unemployment
compensation and permitting individuals to apply for unemployment
compensation in at least two of the following ways-in-person, by phone, or
online). The remainder of the grant would be reserved for states in which the
number of unemployment compensation claims has increased by at least 10% over
the same quarter in the prior calendar year. To receive access to the second
portion of the grant, states must, among other things, make it easier for
individuals to obtain unemployment compensation by waiving work search
requirements and waiting periods.
For a copy
of the law, please click on the link below:
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