With all the attention being paid to the CARES Act and the Paycheck Protection Program, it’s easy to forget about another important milestone that was enacted in the recent Corona Virus recovery legislation.
April 2 marks the date in which employers must comply with President Trump’s Families First Corona Virus Response Act. This law includes the Emergency Family and Medical Leave Expansion Act, along with the Emergency Paid Sick Leave Act. This Act takes effect on April 2nd and ends on December 31, 2020.
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
The Emergency Family and Medical Leave Expansion Act expands the existing Family Medical Leave Act (FMLA) to add an additional qualifying reason for an employee leave related to COVID-19. This Act requires all employers with fewer than 500 employees to provide partial paid leave for all eligible individuals during this time. To be eligible for the Coronavirus-FMLA an employee must have been employed for a minimum of 30 calendar days.
Qualifying employees are eligible if they are unable to work traditionally, or work remotely (online, etc), because said employee must care for their child (under age 18) as a result of the child’s school or daycare facility closing due to the pandemic. Additionally, this applies if the child’s regular care provider is no longer available as a result of COVID-19, as well. Once a federal, state or local authority declares an order for schools or childcare/daycare facilities to close, the employee may take up to 12 weeks of Coronavirus-FMLA Leave.
The Coronavirus-FMLA requires that employers must pay for a portion of an employee’s allowable leave under the certain conditions. The first 10 days of the leave may consist of unpaid leave, however employees may elect to substitute accrued vacation, personal, medical or sick leave during this time.
Following the initial 10 day period, the employer shall provide a paid leave of no less than two-thirds of an employee’s regular rate of pay. This amount is based upon the typical number of hours the employee would generally be scheduled to work. If employers have variable hour employees, the pay is based on a formula provided in the Act. However, the paid leave is capped at $200 per day and $10,000 overall for each employee.
Additionally, the Secretary of Labor has the authority to issue regulations which may exempt small businesses with fewer than 50 employees if imposing the requirement would jeopardize the viability of the business. Also, employers with fewer than 25 employees may be excused from restoring an employee who has taken the leave to the employee’s current or equivalent position under certain circumstances. Please check with the Department of Labor for your specific situation. There are certain employers who are excluded from the act, including healthcare providers and emergency responders. Note that the Coronovirus-FMLA leave runs concurrent with traditional FMLA leave – an employee is not eligible for one followed by the other.
EMERGENCY PAID SICK LEAVE ACT
The Emergency Paid Sick Leave Act requires all employers to provide paid sick time to each of its employees. This Act, also effective April 2, will also expire December 31, 2020.
Essentially, an employer must provide paid sick leave to an employee who is unable to work traditionally or remotely as a result of a federal, state or local quarantine or isolation order, due to COVID-19. This includes employees who are experiencing COVID-19 symptoms and those who have been advised by a healthcare provider to self-quarantine pending results of testing and/or a medical diagnosis, irrespective of whether a quarantine order is in place, or not. This same requirement(s) stands if the employee is caring for an individual who is experiencing COVID-19 symptoms and/or subject to a quarantine/isolation order, or pending medical diagnosis. Additionally, this holds true if the employee must care for their child (under 18) as a result of the child’s school or childcare/daycare facility closing, or the unavailability of the child’s usual caregiver, as a result of COVID-19 precautions.
According to the Emergency Paid Sick Leave Act, full-time employees are entitled to 80 hours, while part-time employees are entitled to the average number of hours worked over a two-week period. However, the Act does not specify “which two-week” period the employer must use to calculate part-time emergency paid sick leave. It is expected that the Department of Labor will be issuing guidelines regarding this calculation within 15 days following the enactment of the Act on April 2.
An employee using Emergency Paid Sick Leave under the act must be paid at the employee’s regular rate of pay, but is capped at $511 per day and $5110 in total. An employee using Emergency Sick Leave to care for an individual or child must be paid no less than two-thirds their regular rate of pay, however this is not to exceed $200 per day or $2000 in total. Emergency paid sick leave is available immediately regardless of how long the employee has been employed. Employees may, but are not required to, use emergency paid sick leave under the Act before using any other paid leave benefits provided by the employer.
The Secretary of Labor will issue a notice within seven days of the April 2nd enactment which employers must post in a conspicuous location, where notices to employees are typically posted.
Certain businesses may be exempt from the Act, including certain healthcare providers and emergency responders. Check with the Secretary of Labor for their definition of “eligible employee” to be sure you’re compliant. Additionally small business with fewer than 50 employees may be exempt from the act if the requirements would jeopardize the viability of the business. Employers who violate the Act will be considered to have failed minimum wage standards under the Fair Labor Standards Act and are subject to the same penalties.
OTHER THINGS TO KEEP IN MIND REGARDING H.R. 6201:
The Families First Coronavirus Response Act provides tax credits relating to the requirements that employers provide paid coronavirus-FMLA leave and emergency paid sick leave. According to the Department of Labor, employers should expect prompt payment for the cost of providing their employee’s leave benefits.
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns with the IRS.
Under forthcoming guidelines, eligible employers who pay qualifying sick or child-care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child-care leave that they paid, rather than deposit them with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes and the employer share of Social Security and Medicare taxes as it pertains to their employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid to employees, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced in the near future.
Remember, UniVista is your trusted technology and security partner. We’re providing this information to save you time, by sharing what we’ve learned about the new laws through the research we’ve done and the direction we’ve received from our HR consultants. We strongly recommend that you consult with your HR/benefits providers along with your tax advisors about how best to manage these new laws and the processes they require.
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