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The Families First Coronavirus Response Act

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The Families First Coronavirus Response Act

In response to the coronavirus pandemic, President Trump signed HR 6201 — aka The Families First Coronavirus Response Act — into law on March 18.

The Families First Coronavirus Response Act

The legislation will authorize more than $100 billion in aid and address paid sick leave, assistance for families, free coronavirus testing, and expanded unemployment benefits.

The law will take effect no later than April 2 and will expire December 31, 2020.

The bill’s provisions include 2 significant sections that will have a direct impact on businesses with less than 500 employees.

They include:

·         The Emergency Family and Medical Leave Expansion Act (EFMLEA)

·         The Emergency Paid Sick Leave Act (EPSLA)

The Families First Coronavirus Response Act
Let’s break down how this legislation will impact your organization.

The Emergency Family and Medical Leave Expansion Act

Beginning April 2 through December 31, 2020, the Federal Family and Medical Leave Act has been amended to include several changes.

These changes expand the reasons employees can take leave during the COVID-19 outbreak, include job protections, and more.

The EFMLEA expands the language of the Federal Medical Leave Act (FMLA) for the duration of the crisis.

Here are the new definitions:

Qualifying events

The FMLA has been broadened to include employee rights to leave of absence in response to COVID-19.

All employees of businesses with less than 500 workers will be eligible to take leave under the EFMLEA for a “qualifying need related to a public health emergency.”

This expansion means employees will be eligible to take job-protected leave in the event:

·         The employee is diagnosed or quarantined due to COVID-19

·         A family member is diagnosed or quarantined due to COVID-19

·         An employee or family member quarantines or self-isolates because they may be sick

·         The employee or their family members are under quarantine or isolation by federal, state, or local authorities

·         The worker must care for a child (under 18) if the child’s school or place of care has been closed

·         The employee must care for a child if their child care provider is unavailable

Employee eligibility widened

In the past, employees must have completed 12 months and 1,250 hours with the company to be eligible for FMLA.

The EFMLA includes leave rights and protections for workers employed for at least 30 calendar days.

Employer threshold

The EFMLA applies to businesses that have employed 50 or more staff members. To meet the required threshold, 50 or more staffers must have put in a working day “during each of 20 or more calendar workweeks in the current or preceding calendar year.”

Job protection reduced

Unlike the FMLA, which requires employers restore workers to their original or a similarly situated position upon their return from leave, the EFMLA exempts some small businesses from job protection during or after the leave.

Employers with less than 25 staff members don’t have to provide job protection if:

·         The employee’s position no longer exists following the EFMLA leave due to an economic downtown

·         The employee’s position no longer exists following the EFMLA leave due to other circumstances caused by a public health emergency during the period of emergency FMLA

The Families First Coronavirus Response Act
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EFMLEA Exclusions may apply

The EFMLEA authorizes the Secretary of Labor to waive the rules “for good cause.”

The legislation currently states the secretary may “exempt small businesses with fewer than 50 employees from the requirements of section 102(a)(1)(F) when the imposition of such requirements would jeopardize the viability of the business as a going concern.”

It’s unclear at this time how a small business can request an exemption and for which guidelines under the legislation the exemption will apply.

Emergency Paid Sick Leave Act Paid Leave Requirements

The Emergency Paid Sick Leave Act (EPSLA) mandates employers will have to provide paid leave for eligible employees (see above) through the end of 2020

Leave requests and payments can begin as soon as the bill becomes law (April 2) and after a short waiting period.

The EPSLA requires business pay workers for sick time they need to take under these conditions:

·         The first 10 days of requested leave may be unpaid

·         Employees may elect to use any accumulated sick, vacation, or personal time during this leave

·         After 10 days employers must pay eligible workers no less than two-thirds their regular rate of pay for hours they would have normally worked

o    Full-time workers receive two-thirds their regular rate of pay

o    Part-time workers receive two-thirds their rate of pay for the average number of hours per day they were scheduled over the last 6 months of employment

·         If the employee worked less than 6 months, employers calculate the leave based on what the employee would have reasonably expected their hours to be at the time they were hired.

Paid leave is calculated at two-thirds the employees normal rate of pay but no higher than:

·         $511 per day, ($5,110 total, or 10 days) for employees who are sick with COVID-19

·         $200 per day ($10,000 total, or 10 weeks) to care for children whose schools or day care providers are closed due to COVID-19

Required paid leave must be:

·         No less than the applicable minimum wage where the staff member is employed

·         No more than the employee’s regular rate of pay

Currently the FFCRA caps employee paid leave at 10 weeks maximum. Benefits will only be in effect through December 31, 2020.

The FFCRA states companies with less than 50 employees can opt out of leave payroll payments, if they would jeopardize business viability. But again, it’s unclear at this time how a small business can request the right to opt out.

Some Relief for SMBs

Tax Credits for EPSLA payments

The cost of providing paid sick leave will likely be challenging for SMBs, but the FFCRA has offered some relief. Businesses can expect to be fully reimbursed by the federal government for leave pay they issue to employees through refundable tax credits.

For the self-employed

Self-employed individuals receive tax credits. Under the FFCRA, self-employed workers receive reimbursement in the form of tax credits if they calculate their “average daily self-employment income” and provide themselves with EPSLA payments during their leave.

Self-employed workers should calculate their net earnings for the taxable year, then divide by 260. This amount, subject to the limitations of $511 per day/10 days maximum or $200 per day/10 weeks maximum, should be fully refundable in the form of annual or quarterly tax payments.

Posting requirements

Employers will need to post the guidelines of the FFCRA prominently for all employees to see. Expect the Secretary of Labor to make a model notice available within 7 days after the FFCRA is in effect.

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