In early 2020, Congress passed the Families First Coronavirus Response Act (also referred to in this article as the COVID Response Act) in response to the coronavirus pandemic. The act expands the Family Medical Leave Act (FMLA) and includes a new federal paid sick leave law.
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Emergency Family and Medical Leave Expansion Act
What it means: More employees are eligible for Family and Medical Leave under the act, and more employers must provide it.
- Any employee who has worked a minimum of 30 days prior to the designated leave is eligible.
- Employers who weren’t subject to the FMLA before now may be required to provide protected leave to employees for a COVID-19–designated reason.
- Employees who can’t work or telework* may take up to 12 weeks of job-protected leave to care for their children (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 may approve employees who are able to telework for Expanded FMLA if both parties mutually agree.
Employers must implement the act under these guidelines:
- 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 fewer 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.
- 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 first 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 Emergency FMLA pay to $200 per day and $10,000 per employee.
- Part-time employees are paid based on the average number of hours they worked six months prior to taking Emergency FMLA. Employees who worked less than six months before leave are entitled to the expectation of the average hours the employee would normally work.
Emergency Paid Sick Leave Act
What it means: Employees can take sick leave for reasons related to COVID-19, and employers must provide 80 hours of paid leave.
- Eligible employees can take paid sick leave because the employee is:
- Part of a federal, state or local quarantine or isolation
- Advised by a healthcare provider to self-quarantine
- Experiencing COVID-19 symptoms and seeking medical diagnosis
- Caring for an individual who is subject to a federal, state or local quarantine or isolation order or has been advised by a healthcare 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
- Experiencing any other significantly similar set of circumstances that have been specified by the U.S. Department of Health and Human Services
The Emergency Paid Sick Leave Act 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 in the list 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. Emergency Paid Sick Leave is also available as an intermittent leave in certain telework or remote working situations.
The act limits paid sick leave wages to $511 per day and $5,110 total per employee when the employee is taking paid sick leave for reasons 1, 2 or 3. Paid sick leave wages are capped at $200 per day and $2,000 total when the employee takes leave for reasons 4, 5 or 6.
Emergency Unemployment Insurance Stabilization and Access Act of 2020
What it means: Many unemployed people are eligible for unemployment benefits, and many states will extend the period of benefits payout by 26 weeks.
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, as long as they:
- Require employers to notify employees about unemployment insurance when an employee is separated from the company
- Make unemployment compensation applications 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% federally funded extensions of unemployment benefits (an additional 26 weeks beyond the initial 26 weeks) for states with a more than 10% 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
Note: Individual states may also have passed laws that go above and beyond the federal requirements.
Refundable Tax Credits
What it means: Employers are eligible for tax credits that offset the cost of COVID-related paid sick leave.
Employers can partially offset the costs of the paid sick leave provisions via a refundable tax credit on applicable employment taxes. The credits are a dollar-for-dollar reimbursement of the cost of providing paid sick leave under the act.
Tax credits are limited to $200 per day 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, for up to 10 days, if the sick leave was for a covered quarantine or isolation, or if it covers time for the employee to receive a diagnosis.
Tax Deferral
What it means: Employers may defer the deposit and payment of the employer’s portion of Social Security taxes and certain railroad retirement taxes.
Employers may defer the deposit and payment of the employer’s share of Social Security Tax from March 27, 2020, until Dec. 31, 2020. To avoid penalties, the IRS requires these deferred deposits be paid by:
- Dec. 31, 2021, 50% of the deferred amount; and
- Dec. 31, 2022, any remaining amount.
Your Next Steps
If you haven’t done so already:
- Review your current policies and procedures and adjust them to comply with this new set of guidelines. State and local regulations and guidance may also impact your policies.
- Inform your employees about this new law and how it will impact their leave.
- Post the Department of Labor’s required notice about the act.
