As each day comes and our COVID-19 crisis continues, we find quickly changing rules and legislation being brought into the dizzying environment of employment policy. Sifting through all the information, we have been able to compile these highlights for you.
The first piece of legislation, called the Coronavirus Preparedness and Response Supplemental Appropriations Act 2020 focused primarily on providing emergency funding for federal agencies to respond to the coronavirus crisis, as well as provide disaster loans to small business.
The second, and more applicable legislation to HR, is the Families First Coronavirus Response Act, signed into law and becomes effective no later than April 2, 2020. This provides two distinct emergency leaves for employees to access, and the components of each leave complements the other. Here are some things to take note:
- Neither of these leave acts preempt State or local laws. Both leaves will sunset on December 31, 2020.
- Part one: Emergency Family and Medical Leave Expansion Act. This falls under FMLA, but unlike all other aspects of FMLA, it applies to employers who have under 500 employees (even those with less than 50 employees). It also defines eligible employees to those who have worked for 30 days, decreasing the requirement of one year of service, 1,250 hours.
- The thing to note: these requirements above are only in cases that are related to the public health emergency currently happening. Not all FMLA cases brought to HR are eligible for these requirements – only those that are tied to the coronavirus pandemic.
- Specific to this emergency act is that it applies only when an employee is unable to work or telework due to the need to care for a child (or children) under the age of 18 because school or their place of care has been closed, or the provider is unavailable, due to this public health emergency declared by Federal, State or local authority.
- Should an employee be eligible for this FMLA expansion, it is important to note that the first 10 days are unpaid. The employee may substitute paid leave (sick leave, vacation, emergency paid sick leave, etc) for those 10 days if they choose. Then, the remainder of the 12-week leave must be paid at a rate of at least 2/3rds of the regular rate of pay up to $200/day, or $10,000 in the aggregate.
- Again, to note, this leave is only available for childcare purposes defined above. It is not available on the account of an actual COVID-19 infection or to care for someone else who is ill, or any other reason not related to the pandemic.
- Part two of this response act is the Emergency Paid Sick Leave Act. Same requirements of applicable employer size, where all businesses up to 500 employees are covered here.
- It grants two weeks of paid emergency “sick” and “caring for” leave to employees. It is applied when someone is unable to work or telework because of the following:
- Employee is subject to, or caring for someone, subject to quarantine or isolation order regarding COVID-19;
- The employee has been advised by a health care worker to self-quarantine;
- Employee is experiencing symptoms and seeks medical diagnosis;
- Employee is caring for a child whose school or childcare has been closed due to COVID-19 precautions; or
- Employee is experiencing substantially similar condition specified by Health and Human Services in consultation with Treasury and Labor.
- These 80 hours of paid leave is based on full-time work, and for part time and hourly employees it should be based on the two-week average, along with special rules for those with varying schedules based on a 6-month lookback.
- Within the 80 hours it is important to know whether an employee is taking it because they are sick, or because they are using it as “caring for” leave. Those who are taking because they are sick cap out in pay at $511/day, or $5,110 in the aggregate. If it is because they are caring for someone, it is paid at 2/3rds rate of pay, up to $200/day and $2,000 aggregate.
- This leave is granted immediately, there is no waiting period, and the Act restricts any carryover of leave from one year to the next, nor is there any payout of unused leave.
- For small businesses under 50 employees, there is an exception. This is a “good cause” exception where it would “jeopardize the viability of the business as a going concern”. Currently the DOL is working on emergency guidance and rulemaking in order to access this exemption.
So, what about all of that paid leave? It’s important to make sure our employees can be as minimally disrupted by all of this as possible, but it is difficult for most employers to be providing that paid time, too. This second act of legislation addresses this, too, with tax credits for the new paid leave entitlements:
- The credit is limited to wages required by reason of these new provisions (not applicable if paid leave is required by current state or local law);
- The credit is limited to the amount paid out to the employee based on the daily and aggregate caps per employee;
- The pending guidance from DOL and Treasury is an immediate dollar-for-dollar offset against taxes so that employers can retain an amount of payroll taxes equal to the amount of qualifying leave paid.
Undoubtedly more legislation is coming our way to help all of us in this. Feel free to reach out should there be questions about the latest best practice as we combat COVID-19!
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