President Trump Signs Expanded FMLA for Paid Family and Sick Leave
Employers with 500 or fewer employees are impacted beginning in April 2020 through December 31, 2020.
President Trump signed into law the Families First Coronavirus Response Act late in the evening on March 18, 2020. The law will go into effect approximately April 2, 2020, and will remain in effect until December 31, 2020.
On March 16, 2020, the House of Representatives passed an amended version of the bill, which passed the Senate by a vote of 90 to 8.
The bipartisan law addresses three key parts of employer coverage: the Emergency Family and Medical Leave Expansion Act, the Emergency Paid Sick Leave Act and the Tax Credits for Paid Sick and Paid Family and Medical Leave.
Emergency Family and Medical Leave Expansion Act
All employers with 500 or fewer employees are subject to the Expansion Act. The Expansion Act significantly, but temporarily, expands the number of employers subject to the FMLA. It covers any employee who has been employed for at least 30 calendar days and is unable to work (or telework) due to a need for leave to care for a son or daughter under 18 when the school or normal place of care is closed.
Employers with 50 or fewer employees may be exempted from the Expansion Act when such requirements could jeopardize the viability of the business as a going concern. Certain health care providers and emergency responders may also be excluded from compliance with the Expansion Act.
The first 10 days for which the employee takes leave may consist of unpaid leave. Paid leave can be calculated based on an amount that is not less than two-thirds of the employee’s regular rate of pay multiplied by the number of hours the employee would otherwise be normally scheduled to work. Paid leave should not exceed $200 per day and $10,000 total.
Emergency Paid Sick Leave Act
Employers who employ fewer than 500 employees are required under the Expansion Act to provide paid sick leave coverage to all employees who are unable to work (or telework) due to a need for leave because of the following:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID–19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
- The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
- The employee is caring for an individual who is subject to an order as described above;
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions; or
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
According to the Emergency Leave Act, all full-time employees are entitled to 80 hours of paid sick time, and all part-time employees are entitled to paid sick time equal to the number of hours the employee works, on average, over a two-week period.
Paid sick time provided to an employee under the Expansion Act shall cease beginning with the employee’s next scheduled work shift immediately following the termination of the need for paid sick time as discussed above. An employer may not require, as a condition of providing paid sick time, that the employee search for or find a replacement to cover the hours during which the employee is using paid sick time and may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time allowed under the Expansion Act.
Emergency paid sick leave related to an employee’s own condition is calculated based on the employee’s regular rate or applicable minimum wage, whichever is greater, but is limited to $511 per day and $5,110 total. Emergency paid sick leave relating to situations where the employee is acting as a caregiver is based on two-thirds of the employee’s regular rate or applicable minimum wage, whichever is greater, and is limited to $200 per day or $2,000 total.
Employers must post a notice informing employees of their rights to emergency paid sick leave, a notice of which is forthcoming from the Secretary of Labor’s Wage and Hour Division: https://www.dol.gov/agencies/whd/employers.
Tax Credits and Employer Relief
Employers that are required to provide emergency paid sick leave under the Expansion Act may receive some relief in the form of refundable tax credits. They may be able to recover 100 percent of qualified sick leave wages paid. If the tax credit exceeds tax imposed on the employer for employment taxes, the excess would be treated as overpayment.
Employers should be careful of not discouraging or preventing eligible employees from claiming paid family leave or sick leave. Consult with your CPA and legal counsel regarding tax credits and compliance with the law as it applies to your business. This includes factors regarding discontinuance of paid leave and the employee’s return to work.
For more updates, refer to our COVID-19 Clarity Center.