During the coronavirus pandemic, the brand new Families First Coronavirus Response Act provides paid leave to employees forced to miss work because of the COVID-19 outbreak through an emergency expansion of the Family Medical Leave Act (FMLA) and a new federal paid sick leave law.
Who: Businesses with fewer than 500 employees
When: The leave provisions take effect April 1, 2020, and remain in effect until December 31, 2020
Breakdown of the Families First Coronavirus Response Act
Emergency Family and Medical Leave Expansion Act
The Act lowers the FMLA eligibility requirement to include any employee who has worked a minimum of 30 days prior to the designated leave. Employers who weren’t subject to the FMLA before now may be required to provide protected leave to employees for a COVID-19 coronavirus-designated reason.
Employees, who are can’t work or telework, may take up to 12 weeks of job-protected leave to care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the provider is unavailable because of a public health emergency.
Employers with 25+ employees must guarantee any employee who has taken Emergency FMLA will return to the same or equal position. For employees with 25 or less workers, this requirement does not apply if the employee’s position is eliminated due to circumstances of a public health emergency (including economic downturn) while that employee is on Emergency FMLA.
Paid leave: The first 10 days (instead of 14) of Emergency FMLA may be unpaid but employees can use accrued paid leave during that time. After the 10 days, employers generally pay full-time employees at two-thirds the employee’s regular rate for the hours the employee normally works. The Act limits this pay to $200 per day and $10,000 altogether per employee.
Part-time employees may be paid based on the average number of hours they worked 6 months prior to taking Emergency FMLA. Employees who worked less than 6 months before leave are entitled to the expectation of the average hours the employee would normally work.
Emergency Paid Sick Leave Act
This Act expands the reasons employees can take sick leave to reflect the impact of COVID-19 in the US.
Eligible employees can take paid sick leave because the employee is:
- Is part of a federal, state or local quarantine or isolation
- advised by a health care provider to self-quarantine
- experiencing COVID-19 symptoms and seeking medical diagnosis
- caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine
- caring for the employee’s child if the child’s school or place of care is closed or unavailable due to public health emergency; or
- feeling any other significantly similar condition specified by the U.S. Department of Health and Human Services
This provision requires employers to provide full-time employees with 80 hours of paid sick leave at the regular rate (or two-thirds the employee’s regular rate for reasons 4, 5, or 6 above). This leave won’t carry over to the following year and may be on top of any paid sick leave currently provided by employers. Employers of healthcare providers or emergency responders have the option to make this leave available or decline to offer it.
Cap on Paid Sick Leave Wages: Paid sick leave wages are limited to $511 per day up to $5,110 total per employee for their own use and to $200 per day up to $2,000 total to care for others and any other substantially similar condition.
Emergency Unemployment Insurance Stabilization and Access Act of 2020
Under certain conditions, the act provides $1 billion in emergency grants to states for unemployment insurance benefit processing and payment services. These funds are allocated in two ways:
- Immediate funding to all states for administrative costs, providing that those states:
- Require employers to notify employees about unemployment insurance when an employee is separated from the company.
- Make sure unemployment compensation applications are available in multiple ways (at least two)—in person, by phone, or online.
- Share information about how to ensure the successful processing of an application and notify applicants when their applications are received and being processed.
- Emergency grants that provide 100 percent federally funded extensions of unemployment benefits (an additional 26 weeks beyond the initial 26 weeks) for states with a more than 10 percent increase in unemployment compensation claims compared to the same quarter in the calendar year before. To be eligible, states must:
- Commit to maintaining and building access to unemployment compensation
- Make plans to ease access and eligibility requirements by waiving waiting periods or work search requirements.
Refundable Tax Credits
Employers can partially offset the costs of these paid sick leave provisions via a refundable tax credit on some applicable employment taxes. Tax credits are limited to $200 per employee who takes the mandated paid sick leave, for up to 10 days per person. The limit rises to $511 per day per employee if the sick leave was for a covered quarantine or isolation, or covers time for the employee to receive a diagnosis.
Required Coverage for COVID-19 Testing
All diagnostic testing and related services for COVID-19 MUST be covered by private health plans (insured, self-insured, and grandfathered plans) for both employees and their covered dependents, without deductibles, copayments or coinsurance. Covered services apply services related to evaluating the need for COVID-19 diagnosis and treatment, and include testing, in-person, and telehealth providers, and facility costs. Plans are also not permitted to require prior authorization for these services.
Emergency Unemployment Insurance Stabilization and Access Act
This law provides $1 billion for emergency grants for state activities related to unemployment insurance benefit processing and payment, under certain conditions.
Half of the funding for states’ administrative costs will need to meet certain requirements:
- Employers must provide a notification of unemployment compensation availability at the time of employee’s separation
- Ensure unemployment compensation and assistance applications are accessible in a minimum of 2 ways (in-person, phone, or online)
- Notify applicants when their application is received and processed, and give information about what to do if the application cannot be processed.
The other half of the funding will be allocated to states that experience unemployment that is at least 10% higher compared to the same quarter of last year. Those states are eligible for additional funds, of up to 100%, if they meet the following requirements:
- Committing to maintain and improve access to unemployment compensation
- Committing to or taking steps to ease eligibility requirements and access
Note: Individual states may also have passed laws that go above and beyond the federal requirements.
How Does this Apply to Employers:
- Review your current policies and procedures and adjust them to comply with this new set of guidelines. Keep in mind how any state and local guidance may also impact your policies.
- Inform your employees about this new law and how this will impact their leave.
- Post the Department of Labor’s required, approved notice regarding the federal Act once that notice becomes available.