The recently enacted Families First Coronavirus Response Act (FFCRA) creates new obligations for employers in an attempt to relieve economic pain felt by their employees arising from the ongoing epidemic—but it also offers tax credits to defray the cost.
Among other things, the new law extends additional leave benefits to workers, most of which will have to be paid by their employers. It is one of several pieces of legislation that policymakers hope will strengthen the economy, which has been rocked by massive layoffs and state and business shutdowns that may last for months to come.
The FFCRA imposes changes in federal leave law that are scheduled to go into effect on April 2 but are not intended to linger forever—they are due to expire on Dec. 31, 2020.
In short, the law requires all employers that have fewer than 500 employees to provide their workers who have a qualifying Coronavirus-related need with up to two weeks of paid sick leave and up to 12 weeks of leave under the Family and Medical Leave Act (FMLA), 10 weeks of which also must be paid leave.
Keep in mind that this includes those businesses that have fewer than 50 employees, who under the law previously had no requirements under the FMLA but who now are responsible for complying with certain elements of the that law.
The new coverage applies to employees who go into quarantine, care for a family member in quarantine or children whose schools are closed. The law defines qualifying need as leave needed to comply with a recommendation or order by a public official or a healthcare provider holding that the physical presence of the employee on the job would jeopardize the health of other employees by exposing them to COVID-19.
The benefits also are available to employees whose family members’ presence in the community would jeopardize the health of others because of the exposure of the family member to COVID-19, or because they exhibit symptoms.
Timing Is Everything
Under the law, the first 14 days for which an employee takes Coronavirus leave may be in the form of unpaid FMLA leave, but the employee also may choose to substitute paid leave for the Coronavirus FMLA leave during that time. However, unlike previous FMLA-qualifying reasons for granting leave, under the new law the employer may not require the employee to substitute paid leave for the Coronavirus FMLA leave.
Under the FFCRA, following the first 14 days of Coronavirus FMLA leave, the employer must provide paid leave in an amount that is not less than two-thirds of the employee’s regular rate of pay, calculated based off of the number of hours the employee would otherwise be normally scheduled to work. The FMLA Expansion Act also provides a calculation formula for employees with varying workweek schedules.
Coronavirus-related paid sick leave must be provided in addition to the employer’s other existing paid leave policies. Employers may not require their workers to exhaust other employer-provided paid leave benefits before using Coronavirus-related paid sick leave mandated by the new law, and they are not allowed to amend their paid leave policies in such a way that makes the benefits run concurrently.
There are a few exceptions embedded in the new law that employers need to keep in mind, according to Rebecca Baker, Amy Karff Halevy and Robert Nichols, attorneys with the law firm of Bracewell LLP. For example, the U.S. Department of Labor has the authority to exempt small businesses with fewer than 50 employees from the leave requirements when their imposition would jeopardize the viability of the business as a going concern.
The law also requires employers to post a notice, that will be prepared by the Secretary of Labor, informing employees of their leave rights under the law. (Presumably via e-mail and on their company website if the employees are sequestered at home or are telecommuting.)
It’s not all bad. The FFCRA also calls for providing employers with tax credits for 100% of what they pay out to employees under the new law’s provisions, intended to reduce the cost burden of providing the benefits.
In addition, for unionized employers who are subject to multiemployer collective bargaining agreements, they are allowed to comply with the act via contributions to a multiemployer fund, plan or program.
“Make sure your business understands the ramifications and how it applies to your business,” warn Baker, Karff Halevy and Nichols. “It's essential to carry out the new law correctly.”