Whatever else happens in 2020 it’s safe to assume it will forever be remembered as the year of the Coronavirus Pandemic. Despite there being a lot of information out there about the FFCRA, there still seems to be a lot of confusion. In this post, I endeavor to provide some clarity with relatively brief overviews of the extended FMLA and Emergency Paid Sick Leave provisions of the FFCRA. WARNING: This post will be a bit longer than usual, but I hope you will agree with me that it’s worth taking the extra time to read it. OK, let’s dive in. Emergency Paid Sick Leave An employee working for an employer of 499 or fewer employees may be eligible under the Paid Sick Leave portion for the following reasons:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
- The employee is quarantined at the direction of a health authority or healthcare provider to prevent the spread of COVID-19.
- The employee is experiencing symptoms of COVID-19 and is seeking a diagnosis.
- The employee is caring for another person who is subject to #1 or #2 above.
- The employee is caring for a child or another person due to closure of a school or other facility due to COVID-19.
- The employee is experiencing similar conditions that have been specified by the US Department of Health and Human Services (HHS).
Full-time employees get up to 80 hours ( 2 weeks), whereas part-time employees get up to the average number of hours worked in a two-week period. The amounts are capped, so the maximum amount of benefits depends on why the employee is taking the leave. Employees taking leave for reasons 1-3 may receive either their regular rate of pay, OR the FLSA minimum wage, or the state or locality’s minimum wage, whichever is greater, with a maximum amount of $511 per day for a total of 80 hours, bringing the 2-work-week total for full-time employees to $5,110. Employees qualifying for the Emergency Paid Sick Leave under reasons 4-6 above may receive 2/3 of the applicable rate, with a maximum benefit of $200 a day for a total maximum benefit of $2,000.
As with any law, there are conditions and exceptions. Here they are: The law only remains in effect through December 31, 2020, so there is no carryover of unused paid sick leave from one year to the next. Once an employee no longer qualifies for the Emergency Paid Sick Leave, then at the next shift or workday after the employee ceases to qualify, the Emergency Paid Sick Leave ends. Employees do not have to find someone to cover their shift. Employees can use Emergency Paid Sick Leave before using any accrued unused PTO if any, and this leave does not reduce other accrued unused leave. In other words, whatever you provide your employees for PTO cannot offset the 2 weeks’ Emergency Paid Sick Leave. You may not retaliate against employees who exercise or try to exercise their rights to Emergency Paid Sick Leave, and you must post all this information in a conspicuous location in your workplace. (The DOL has just provided a poster, which you can download here. If any of your employees are union members, then you must contribute expected amounts to a fund, and from there the union makes distributions to its eligible members.
The exceptions: There are only 2 and they’re fairly narrow. Employers with fewer than 50 employees may be exempt — with permission from the Secretary of Labor. Stay tuned for regulations that may discuss when and how one might get such an exemption. The point is you’re not automatically exempt just because you have fewer than 50 employees. Some employees who are healthcare workers or emergency responders can be excluded, presumably because they would be needed to help during this crisis. Not all healthcare workers can be excluded, however. The law basically borrows from the FMLA definition of healthcare provider, which generally means doctors, nurse practitioners, nurse-midwives, clinical psychologists and social workers practicing within the scope of their practice. Other health care workers would probably not be subject to such an exclusion.
OK, what’s the tax credit under the Emergency Paid Sick Leave portion? The tax credit comes in the form of a payroll tax credit (specifically an offset of the employer’s share of Social Security taxes) on a quarterly basis covering 100% of the emergency paid leave, capped at 10 days for each employee, including days in previous quarters. (Remember the limits for this type of leave is $511/day for employees who qualify under reasons 1-3 above and $200/day for employees qualifying for reasons 4-6 above. Note that quarterly tax credits cannot be more than an employer’s share of Social Security taxes in that quarter. What happens if there’s an excess? You can use that as an overpayment of taxes and apply it toward future taxes. Self-employed individuals unable to work can get the lesser of $511 or 100% of their average daily self-employment income but must show proof of eligibility.
By the way, the IRS has now promised immediate reimbursement. ‘Immediate’ may be a relative term, however.
Here are the key benefits:
- Eligible employees get two-thirds of their regular pay based on the hours they’d normally work.
- Benefit of up to $200 per day or the aggregate of $10,000 and 50 days.
- Variable-hour employees will be eligible based on the average number of hours they worked in the six months prior to the start of their leave.
- If the employee didn’t work in the last six months, then it will be based on the amount that was anticipated when they were hired.
Employees who have been on your payroll for at least 30 days and who cannot work or telework due to the need to care for a minor child whose school or place of care has been closed or is unavailable due to a COVID-19-related emergency. Employees who are health care workers or emergency responders may be excluded here as well, and as with Emergency Paid Sick Leave, employers with 499 employees or fewer have to comply. The first 10 days of this type of leave are unpaid, but employees may use other available paid leave, including Emergency Paid Sick Leave if they are eligible. For the remaining 10 weeks, employees get benefits as described above. Employees must provide notice as soon as is practicable. You can require documentation from employees, but, practically speaking, you may need to be flexible here. Doctors’ offices may be a bit overwhelmed and may not be able to respond to such requests immediately. Employees have the same rights to job-protection as under regular FMLA leave. If your employees are union members then you must contribute to a fund in the same way as with/for employees taking Emergency Paid Sick Leave.
As with Emergency Paid Sick Leave there is a narrow exception for employers with under 50 employees, but you need a determination from the Secretary of Labor that compliance will jeopardize your business’ viability as a going concern. If you have fewer than 25 employees then you may be exempt from the job restoration requirements, if and only if:
- The position no longer exists due to economic conditions caused by the PHE
- The employer makes reasonable efforts to restore the employee to a similar position with equivalent compensation and benefits
- If the above fails, the employer makes reasonable efforts in the year following the end of the leave (or 12 weeks after the leave starts, whichever is earlier) to let the employee know when an equivalent position exists again.
NOTE: The sunset date of December 31, 2020 applies to this portion of the FFCRA as well.
What are the tax credits under this part of FFCRA? Similar to those under the Emergency Paid Sick Leave provisions, up to 100% set off against your portion of quarterly Social Security taxes, with a max of $200/day or $10,000 a year. Here too, your credit can’t exceed your share of Social Security taxes in a given quarter, but you can apply excesses to future taxes. You can also include health plan expenses that you pay for employees on this type of leave, but you should do them on a pro-rata basis for each employee and they must be directly related to additional costs you incurred as a result of complying with these provisions. Self-employed people who are unable to work for reasons set forth in this part of the FFCRA may also be eligible for benefits 0f up to $200/day or 67% of their average daily self-employment income, whichever is lower but have a 50-day limit to use the credit.
Here again, the IRS has promised immediate reimbursement. Again, ‘immediate’ may be a relative term.
I hope this clears a few things up for you. Remember this is federal law. Many states have also passed emergency legislation and if you have employees working in any of those states you will need to comply with those laws as well.
Stay healthy, stay safe, and hang in there!
Watch the latest video clip in my series, “Ask the Employer’s Lawyer: My Employee Has Exhausted All Her FMLA Leave Time. What do I do?
Watch my television interview on Stop My Crisis with Vivian Gaspar.
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
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