Alert

UPDATE: President Trump Signs Families First Coronavirus Response Act into Law

March 19, 2020

*Note: this is an update to an alert that was originally published on March 17, 2020.

WHAT: As anticipated, President Trump signed the Family First Coronavirus Response Act into law. Wiley has been following the development of this legislation, the final provisions of which are summarized in the chart below. As we have previously advised, this legislation was created and passed very quickly, leaving a large number of questions unanswered, including how the number of employees will be determined in calculating whether an employer is subject to the 500-employee cap and how the small-business exemptions will be administered. Consultation with counsel is strongly advised.

WHEN: The Act goes into effect April 2, 2020. At that time, employers will have to ensure they are able to comply and are complying with its provisions. All employers must post a notice advising employees of their rights under the new law (available here). Wiley advises also providing that notice electronically, given that many employees are currently working remotely.

OVERVIEW OF PROVISIONS:  The Act impacts all employers with fewer than 500 employees primarily in two ways; through extension of the Family and Medical Leave Act and a mandate to provide sick leave under certain circumstances. The Act also includes tax credit provisions to help employers who are now required to provide paid leave, as well as some carve-outs for small businesses. The major provisions are summarized below.

Emergency Paid Sick Leave:

  • Covered Employers: Applies to all private sector employees with fewer than 500 employees. Secretary of Labor is authorized to issue regulations to exempt employers with under 50 employees for good cause.
  • Eligible Employees: All employees are immediately eligible.
  • Duration of Leave: Employer must provide 80 hours of paid sick leave for full-time covered employees and the number of hours equal to an average of two-weeks of work for part-time employees.
  • Qualifying Reasons for Leave:
    1. Employee is subject to a Federal, state or local quarantine or isolation order related to COVID-19;
    2. Employee has been advised by a health care provider to self-quarantine;
    3. Employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
    4. Employee is caring for an individual who is subject to quarantine pursuant to numbers 1 and 2, above;
    5. To care for a child or children whose school or care provider is unavailable due to COVID-19;
    6. Employee is experiencing a “similar condition” as specified by the Department of Health and Human Services, the Department of Labor or the Treasury.
  • Required Wage: In the case of Reasons numbers 1-3 above, the employer must pay the employee’s regular rate of pay with a daily cap of $511. For Reasons numbers 4-6 above, the employer must pay two-thirds (2/3) of the employee’s regular rate of pay with a daily cap of $200.
  • Tax Credits: Private sector employers with fewer than 500 employees may receive a tax credit for 100% of the required paid sick leave wages, plus certain health care expenses. This amount is also refundable if the tax liabilities are less than the required paid sick leave wages.

Emergency Family and Medical Leave:

  • Covered Employers: Applies to all private sector employees with fewer than 500 employees. Secretary of Labor is authorized to issue regulations to exempt employers with under 50 employees for good cause.
  • Eligible Employees: Employees who have been employed with the employer for at least thirty (30) days.
  • Duration of Leave: The first ten (10) days for which an employee takes the “emergency” FMLA leave may consist of unpaid leave, but an employee may choose to use any accrued regular leave during that time or the newly mandated emergency sick leave (described below). The employer must then provide paid leave for remainder of the emergency FMLA leave (up to ten (10) weeks) with a cap of $200 per day. 
  • Qualifying Reasons for Leave: Employee is unable to work or telework as a result of caring for a son or daughter under 18 years of age if the school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency.
  • Required Wage: The employer must provide two-thirds (2/3) the employee’s regular rate of pay, based on the number of hours the employee typically works with a daily cap of $200.
  • Tax Credits: Private sector employers with fewer than 500 employees may receive a tax credit for 100% of the required paid sick leave wages, plus certain health care expenses.  This amount is also refundable if the tax liabilities are lesser that the required paid sick leave wages.

Wiley has a dedicated team working to provide answers and support during the COVID-19 pandemic. They are available to advise on any matters related to COVID-19, including questions and concerns related to this legislation.

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