On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“the Act”) into law.
While the legislation has many provisions, there are four key areas that address the unprecedented impact of COVID-19 on our companies, organizations and our workforce:
- Emergency Family and Medical Leave Expansion Act (EFMLEA)
- Emergency Paid Sick Leave Act (EPSLA)
- Payroll Tax Credit
- Group Health Plan Benefit Mandate
These provisions and requirements are effective April 2, 2020 and will cease December 31, 2020, unless subsequent legislation extends or modifies them.
Emergency Family and Medical Leave Expansion Act (EFMLEA)
- Applies to employers with less than 500 employees and most public employers.
- Available to both full-time and part-time employees, who have been employed for at least 30 days (exceptions allowed for health care providers and emergency responders.)
- The Secretary of Labor can make exceptions for employers of less than 50 employees who substantiate that compliance jeopardizes viability of their business.
- Provides 12 weeks of job-protected leave in circumstances where an eligible employee cannot work because he/she needs to care for a minor child due to day care or school closure due to COVID-19, and no other childcare is available.
- The first 10 days of EFMLEA are unpaid days. However, the employee may use available Sick Leave or Paid Time Off time if it is part of his/her company’s benefit package, or may use the newly available EPSLA as outlined below. The remaining 10 weeks are to be paid by the employer at two-thirds of the employee’s regular pay for his/her regular hours, capped at $200.00 per day and $10,000.00 total.
- Job protection under EFLMEA does not apply for employers of less than 25 employees if the job no longer exists due to COVID-19. However, in such an instance, that employer must make reasonable efforts to rehire that displaced employee for up to one year.
Emergency Paid Sick Leave Act (EPSLA)
- Applies to employers who employ less than 500 employees and most public employers with the same possible exclusions as outlined above (health care providers and emergency responders)
- Available in six (6) circumstances:
- An employee is subject to a federal, state or local quarantine or isolation order related to COVID-19.
- An employee is advised by a health care provider to self-quarantine due to COVID-19 concerns.
- An employee is experiencing symptoms of COVID-19 and is seeking medical diagnosis.
- An employee is caring for an individual who is subject to a quarantine or isolation order or who has been advised to self-quarantine due to COVID-19.
- An employee is caring for his/her son or daughter (as defined under the regular Family Medical Leave Act) if that son/daughter’s school or place of day care is closed related to COVID-19 or that son/daughter’s day care provider is unavailable due to COVID-19.
- An employee is experiencing any other substantially similar condition as specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
- Full-time employees are entitled to 80 hours of paid leave under EPSLA at their regular pay to care for themselves or two-thirds of their pay to care for someone else due to COVID-19.
- Part-time employees are entitled to payment equal to the number of hours they work on average over a two-week period.
- EPSLA pay is capped at $511 per day and $5,110 total per employee for use under circumstances 1, 2, or 3 and capped at $200 per day and $2000.00 total per employee for use under circumstances 4, 5, or 6.
- EPLSA is in addition to an employer’s existing paid leave policy, if one exists.
- Unused EPSLA time does not carry over after December 31, 2020 and does not get paid out at an employment separation.
- Employers may not substitute EPSLA for any prior paid leave they may have provided to employees for COVID-19 related reasons (or any other reason).
- Employers my allow employees to use EPSLA paid leave before they use any accrued paid leave that the employer provides.
- After the first workday of receiving EPSLA pay, employers may require employees to provide notice pertaining to status of absence in accordance with existing policies pertaining to “call outs.”
- Employers are required to post a notice in the workplace alongside other related labor law posters regarding the availability of EPSLA (Secretary of Labor must provide the notice by March 25th).
- Employers are not permitted to retaliate against an employee who uses EPSLA and there will be penalties to employers for failure to pay under the provisions of EPSLA.
Payroll Tax Credits for Employers
In light of the payment requirements outlined above, employers will be granted refundable tax credits against the employer portion of Social Security taxes. The tax credits are 100% of EPSLA and EFMLEA payments made by the employer, up to the aforementioned per employee caps.
- Applies to both the emergency EFMLEA expansion and the EPSLA.
- Dollar for dollar credit for EPSLA and paid EFMLEA wages, against the employer portion of Social Security taxes.
- Refund is possible for amounts that exceed what is available as a credit.
- Limits on what can be claimed mirror the caps for what must be paid.
Health Plan Benefit Mandate
- The act requires all insured and self-funded medical plans, including grandfathered plans, to cover diagnostic testing-related services for COVID-19 at 100 percent without any deductibles or co-pays.
- Examples include services provided by doctors, emergency rooms, and urgent care centers leading up to the decision that testing is needed, along with the actual lab-based testing.
- The mandate does not apply to treatment.
Keep in mind, this is all uncharted territory and is very fluid. More details and clarifications may be forthcoming. Please reach out with any questions you may have.