home > blog

McKeel Group avatar

BLOG

blog

COVID-19: Federally Mandated Paid Family and Sick Leave (FFCRA)

Worker Pay

This update addresses new requirements for paid sick leave and family leave for companies with up to 500 employees under the recently enacted Families First Coronavirus Response Act (FFCRA).

Federally Mandated Paid Sick Leave for Small-Midsize Employers:

On Wednesday, March 18th, the Families First Coronavirus Response Act (FFCRA) was passed by Congress and signed into law, which provides paid sick leave, family leave and expanded unemployment benefits for employees of companies with 500 or fewer employees. The law provides paid leave and job protection to covered workers who must miss work for coronavirus-related reasons to care for themselves or their family members. The paid leave and paid job protection provisions require covered employers to provide two weeks of paid sick leave for employees; and up to 12 weeks of expanded Family and Medical Leave Act (FMLA) leave for employees to care for children whose schools or child care facilities are closed due to the virus, including up to 10 weeks of paid FMLA leave.

What companies are covered. The law only applies to companies with up to 500 employees. Companies with less than 50 workers can apply for a waiver from both the paid sick leave and paid family leave provisions upon a showing that the payments “would jeopardize the viability of the business,” which is necessarily an uncertain standard. The Department of Labor (DOL), Treasury Dept., and IRS are charged with enacting regulations to fill in gaps in administering the new law, and there are certain to be grey areas for employers as the new law is rolled out.

When does it take effect and what pay is required. 
The paid sick leave and expanded family leave provisions take effect April 2, 2020 and remain in force until December 31, 2020, and require the following covered leave:

Required Paid Sick Leave The bill requires two weeks (80 hours) of paid sick leave for employees who cannot work (including telework) due to the following:

  • isolation if the employee is diagnosed with coronavirus
  • to obtain medical care or diagnosis if the employee experiences symptoms of coronavirus
  • isolation to comply with the order or recommendation of a public health official or health care provider to avoid jeopardizing the health of the community due to exposure or exhibiting symptoms of coronavirus
  • to care for or assist a family member of an employee in isolation or seeking medical care for the same reasons
  • to care for the employee’s child if the child’s school or child-care facility is closed due to coronavirus
  • To address any other “substantially similar condition” identified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Sick leave must be paid:

  • at the employee’s regular rate for the first three reasons (during quarantine, while seeking a diagnosis or preventive care for coronavirus, or for recommended isolation for the employee’s own condition), with a $511 per day and $5,110 total per worker maximum.
  • paid at 2/3 the employee’s regular rate for the last three reasons (to care for a family member or child for coronavirus-related purposes, or to address substantially similar conditions identified by federal authorities), with a $200 per day and
  • $2,000 total per worker maximum.

Part-time workers are eligible for pay equivalent to the number of hours they typically work in a two-week period and the same maximums apply.

Additional provisions of the paid sick leave provisions:

  • Employers may not retaliate against employees for using this leave and may not require an employee to find a replacement to cover a missed shift.
  • Employers of health care providers or emergency responders may elect to exclude
  • such employees from these emergency leave provisions.
  • The mandated sick leave will be available for immediate use regardless of how long an employee has been employed and is in addition to all other vacation, PTO, or other leave provided by the employer. Employers may not require an employee to use other paid sick time or leave before giving access to the new federally mandated paid sick time. An employer must allow an employee to use this paid sick time first, and only after that federal paid sick time is exhausted, employees who need more time off may be required to use any accrued sick leave.
  • Any paid sick leave accrued due to coronavirus will not carry over to the following year.
  • The US Dept. of Labor (DOL) will provide a notice outlining employee rights that employers must post.
  • The DOL may also issue general hardship waivers to employers with fewer than 50 employees who demonstrate that compliance would jeopardize the viability of the business.

Expanded FMLA Rights The expanded FMLA provisions require employers to provide up to 12 weeks of FMLA-protected leave for all employees who have worked for the company at least 30 days, and who cannot work or telework for the following reasons:

  • To care for the employee’s child under 18 years old, if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to coronavirus.
  • (This is in contrast to earlier versions of the bill in Congress, which permitted leave for employees to quarantine due to exposure to or symptoms of coronavirus, or to care for family members who were quarantined due to exposure to or symptoms of coronavirus.
  • Importantly, the usual FMLA requirements that the employee has been employed for a year, worked for 1250 hours, and works in a location where there are 50 employees within a 75-mile radius do not apply. All employers with up to 500 employees are covered, with the exception of health care providers and emergency responders which may claim an exemption.
  • The first 10 days of the expanded FMLA leave for child care can be unpaid, although employees can use other available paid leave (such as PTO) to cover it. (However, employers cannot require employees to substitute available paid leave.)
  • The remaining portion of the 12 weeks of leave must be paid at 67 percent (2/3) of the person’s normal pay, up to a $200 per day and $10,000 total per worker maximum. This is in contrast to unpaid leave generally required under FMLA. Employers with less than 50 employees can apply for hardship waivers to the US Department of Labor upon a showing that compliance would jeopardize the viability of the business.
  • The FMLA restoration of employment after leave provisions apply to employees exercising the expanded rights; except, that the restoration provisions may not apply to employers with fewer than 25 employees, provided that certain conditions are met. Generally, such employers are not required to reemploy an employee who takes leave under the expanded law: if that employee’s job no longer exists; due to economic conditions related to the outbreak of the coronavirus; and the employer makes reasonable efforts to restore the employee to an equivalent position. However, notably, the employer must make reasonable efforts to contact the former employee for up to one year if a position becomes available.

How will employers cover their costs of the mandated leave? To cover the costs of paid leave for employers under the Coronavirus Response Act, the law provides a quarterly tax credit applicable against Social Security and other employment taxes due by employers equal to 100% of qualified sick leave and family leave wages paid under the Act.

You can access a sample FFCRA-compliant Sick Leave/PTO policy, which can be modified in order to assure compliance with the April 2, 2020 deadline.