UPDATE: What Employers Need to Know During the COVID-19 Pandemic
By: Robert W. Small
March 23, 2020 - 11:06 AM
In prior client alerts, I described the recently enacted federal Families First Coronavirus Response Act, which will take effect on April 2nd and expire on December 31st, and discussed how COVID-19 could impact the employment arena. This Alert will summarize and supplement those prior Alerts.
The FFCRA actually consists of two separate laws: The Emergency Paid Sick Leave Act ("EPSLA"), which requires Employers to give paid sick leave to workers who must stay at home to care for themselves or others who are subject to the Virus; and the Emergency Family and Medical Leave Expansion Act ("ÉFMLEA"), which expands both Employers and employees who are required to provide or may receive FMLA leave and, requires that some portion of that leave be paid. Here are the basics:
What Employers are covered?
All Employers regardless of the number of employees; although the Secretary of Labor may, by regulation, exempt Employers with less than 50 employees, if complying with the Act would jeopardize the Employer's viability as a going concern.
What Employees are covered?
All employees (including part-time employees) who have worked for their Employer for at least 30 days.
Who receives paid leave and in what amount?
The EPSLA creates six categories of paid sick leave for workers who cannot work or telework. Three of the categories relate to the employee being subject to a federal, state, or local quarantine order or contracting or seeking a diagnosis of the Virus, and three relate to the care of others. (See prior Alerts for more specifics as to these categories) For the three categories related to the employee, the employee is entitled to 80 hours of paid sick leave at the employee's regular rate of pay as calculated under the Fair Labor Standards Act, capped at $511 per day and $5,110 in the aggregate, per employee. For leave taken to care for others, the employee is entitled to sick pay with caps of $200 per day and $2,000 in the aggregate per employee.
Are Employers reimbursed for the paid sick leave, and, if so, how?
Yes. Employers may take a credit against the Employer's portion of Social Security and Medicare taxes subject to the above per employee caps. It is believed that in most cases, the tax credit will equal the paid leave payments. For example, if an Employer paid $7,000 in sick leave and normally would be required to pay $10,000 in payroll tax, it need only pay $3,000 in payroll taxes. If the Employer paid $7,000 in sick leave and owed $5,000 in payroll taxes, the entire amount of taxes due would be offset by the sick leave paid.
As noted, the EFMLEA expands both the class of covered Employers and covered employees. It provides for up to 12 weeks of "public health emergency leave" when needed to care for a son or daughter under age 18, if the child's caregiver is unavailable due to the emergency. The first ten days of the leave are unpaid, but the employee may elect to use any other PTO available from the Employer or under state or local law. Employers, too, may require employees to use any available PTO when leave is taken for this purpose. The effect of the EPSLA, however, is that employees will not need to use other PTO during the first ten days of leave.
After the first 10 days, employees must be paid at the rate of at least two-thirds their regular rate of pay, capped at $200, per day and $10,000 in the aggregate.
The EFMLEA does exempt Employers with less than 25 employees from the provisions of the FMLA that require reinstatement to a prior position following leave if the position is eliminated due to economic factors caused by the Virus. Employers must make reasonable efforts to restore the employee to an equivalent position if one exists during the 12 months following the end of the leave period. Employers will be able to offset payments with payroll deduction offsets. By regulation, the Secretary of Labor may exempt employers with fewer than 50 employees if compliance with the Act would threaten the Employer's economic viability.