Below is the final bill as it pertains to Paid leave. This is SUBSTANTIALLY different from the Bill as it existed Saturday and all the Media about this being passed with no changes is false. Below is what you need to know for your employees. Mind you, none of this interferes with anything you want to provide for your employees. Note though that they made substantial changes with what you HAVE to do.
Note – The employer shutting the doors is NO LONGER a qualifying event for PAID SICK LEAVE or PAID FAMILY MEDICAL LEAVE.
The Business or Employees must be unable to work due to Government Quarantine or Isolation ordered by a Health Care provider.
If the business lays off an employee due to a DOWNTURN OF WORK, Standard Unemployment Rules apply. The way I now read this is, If an employee leaves due to their own concerns of Safety, they could be jeopardizing their ability to claim unemployment.
It is clear to me this is the reason why Congress is discussing the $1,000 tax checks to tax payers as they limited who and when they qualified.
Families First Coronavirus Response Act
Who’s eligible, Who’s not and When
Effect date of this legislation: 15 days following presidential signature or APRIL 2ND
Expiration of this Legislation: December 31st 2020
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
This act covers Employers with 500 or Fewer Employees. Employers with under 50 employees can be EXEMPTED FROM THIS ACT if the Required leave would jeopardize the viability of their business.
Employees Eligible: Must be employed for 30 days (BEFORE the 1st day of leave) to take leave under the Emergency Family Medical Leave Expansion Act. An eligible employee is one who is unable to work or telework, to care for the employee’s child (under 18 years of age) due to child’s school or place of care being closed. ALL OTHER COVID-19 RELATED NO LONGER APPLY – THIS IS THE ONLY QUALIFYING NEED IN THE FINAL ACT.
The First 10 days are UNPAID under the FMLA portion of this ACT but employer MAY substitute Accrued Sick Pay or Vacation pay to cover some or all of the 10 days.
After the 10 day period:
- Full time employees are paid at 2/3rd the employee’s regular rate of pay (if Full time) multipled by the number of hours the employee would otherwise normally be scheduled – upto a maximum amount of $200/day for a maximum amount of $10,000/employee
- Part-time or irregular scheduled employees are paid based on the average number of hours the employee worked for the 6 month period prior to taking FMLA
Employers with less than 25 employees are not subject to job retention requirements if the employee’s position no longer exists following the Emergency FMLA leave
EMERGENCY PAID SICK LEAVE
Eligible Employees may take PAID sick leave because the employee is:
- Subject to Federal, State or Local Quarantine or Isolation Order related to COVID-19
- Advised by a Health Care Provider to Self-Quarantine due to COVID-19
- Experiencing COVID-19 symptoms AND seeking Medical diagnosis
- Caring for an individual subject to Federal, State or Local Quarantine or Isolation Order -or- Advised by a health care provider to Self-Quarantine due to COVID-19
- Caring for the Employees child if the child’s school or child’s school or place of care is closed or the care provider is unavailable due to public health emergency
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Service IN CONSULTATION WITH the Secretary of the Treasury and Secretary of Labor
Who’s eligible under Emergency Sick Leave:
Full time employees (regardless of employee’s duration of employment)
Part time employees or irregular scheduled employees are entitled to be paid based on the average number of hours the employee worked for the SIX MONTHS prior to taking the sick leave.
How much is paid:
- For items #1, 2, or 3 above: 80* hrs of Paid sick leave at the employee’s regular rate upto a maximum of $511/day or $5,110 total
- For items #4, 5 or 6 above: 2/3rds* of the employees regular rate of pay with “QUALIFYING REASONS”. Maximum of $200/employee per day for caring for others
*If Full time, part time is paid based on average hours for the preceeding 6 months
Employers will still be reimbursed through a series of tax credits for employers who are required to provide Emergency Paid Sick Leave and Emergency Paid Family Medical Leave for 100% of the qualified sick leave wages paid.
COVID-19 (Corona Virus) : Your Business and Your Employees
H.R. 6201 – Families First Coronavirus Response Act (FFCRA), was passed by the House of Representatives on Saturday 03/14/2020 and expected to pass the Senate later this afternoon and then move the Presidents desk for signature. FFCRA covers several topics that directly Impact Families, Healthcare / Emergency Response Workers, and Small businesses and their employees. This post is going to focus only on the Small Business portion of the Act, DIVISION D – Emergency Paid Leave Act of 2020. After gaining an understanding of the benefits of what this bill provides to Workers, the kicker in the bill to Businesses is that the Businesses need to have available funds in order to pay the Required Benefits. They are however, refunded to the Employer Quarterly BUT having to lay out Payroll funds when Revenue is greatly reduced is the issue that this bill does not address. Not all states have been added to the SBA Disaster Relief list so this piece is still an open issue, for now. Additionally, the bill gives the Secretary of Labor the authority to exempt small Businesses where the Bill would impose requirements that would jeopardize the viability of the small business.
First it is important to Note that this piece of the FFCRA works in conjunction with your State Unemployment Insurance and your Internal Policies on Paid leave as well as the FMLA (Family Medical Leave Act). Because I am based in Wisconsin and most of my clients are as well, my analysis is going to be based on my State, however, this act picks up where your State leaves off.
The first thing that this Act addresses defines the Qualifications under FMLA in order to qualify for this piece of the relief. As an Employee, YOU WILL QUALIFY IF THE STATE OR BUSINESS SHUTS DOWN DUE TO COVID-19 RESPONSE – IF, you were employed by that employer for a minimum of 30 days PRIOR to being Impacted by COVID-19.
Since this bill works in conjunction with FMLA, you need to know how this piece works first. The Family Medical Leave Act has been around since 1993. Its purpose was to provide up to 12 weeks of UNPAID leave to employees who needed time off to tend to relatives who were sick or for an employee or their family who was sick (such as child birth) without fear of losing their jobs. States typically kicked in after this to allow additional unpaid time off. The FMLA act applied to Only Employers with 50 or more employees. The Emergency Paid Leave ACT modifies these basics.
Employers with FEWER than 500 employees now Qualify under the Act but the Employer MUST provide job protections under the ACT. There are no exemptions in place to exempt employers from notifying the employees of their rights to utilize FMLA so, just to ensure your compliance and potential tax credits, you should right now notify your employees. Employers with more than 50 employees were also required to add this to the Employee notices bulletins but this now expands the law to all Employers with 0-500 employees.
What Triggers FMLA under FFCRA:
- Workers with Current diagnosis of COVID-19
- Worker Caring for a person with COVID-19 or Quarantined due to the person with COVID-19
- Worker Caring for child or other individual who is unable to care for themselves due to COVID-19 related to closures of the child’s school, daycare or other care program
- Workers Quarantined (including Self-Quarantine) at the instruction of Care Providers, Employers, or Government Official prevent the spread COVID-19
What are you paid under FMLA:
The first 2 weeks (80 hours) under FMLA are covered by the Employers Paid leave plan (if any) – The Emergency Paid Leave ACT (EPLA), which fills in this gap, is discussed below.
Subsequent weeks off under FMLA are paid 2/3s of the employee’s regular rate.
Important to note: YOU MAY NOT CHANGE YOUR CURRENT POLICIES TO KICK PEOPLE INTO THE ELPA after enactment of this bill.
So that’s the basics of the FMLA changes that are included in the FFCRA. Here’s whats new:
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT (EFMLEA)
This is a temporary change to FMLA act to cover more businesses and more employees.
- Under FMLA employees needed to be employed for 1 year and 1,250 hours, The EFMLEA lowers that requirement to just 30 days employment.
- Employees are eligible for up to 12 WEEKS PAID, JOB PROTECTED LEAVE (vs unpaid leave under FMLA)
- The initial 2 weeks have not changed, Pay is provided thru the Employers Paid Time Off policies for up to 14 days (However, The Emergency Paid Sick Leave Act kicks in here to cover this lapse IF the business has no Company policy)
- After the initial 14 days, Employees are paid 2/3rd of their regular rate of pay. Monthly earnings are Capped at $4,000/month per Employee
- This Modification will be effective within 15 days of enactment and be in Effect thru Dec 31st, 2020
EMERGENCY PAID SICK LEAVE ACT (EPSLA)
This piece of the legislation REQUIRES all Businesses with less than 500 employees to provide 80 hours of paid sick leave at the Employees Regular Rate of pay – UNLESS, one of the following applies then the rate is at 2/3rds of the employees regular rate:
- Child’s school or Care facility is closed due to COVID-19
- To care for a Family Member who is SELF ISOLATING and exhibiting symptoms
- Or who is complying with a recommendation or Quarantine requirement
This is where the Employer MAY NOT CHANGE THEIR CURRENT POLICIES
Now here’s the part that the Employer wants to know… How does this help the business if I need to pay employees even 2/3rds of their pay?
So how do you get repaid on these new Policies:
For the EPSLA: Employers will receive a REFUNDABLE Tax Credit equal to 100% of the Qualified Sick Leave paid by Employers each Calendar Quarter up to a maximum of $511/day ($200/day if caring for child or family member) for up to 10 days per employee per calendar quarter. This Credit is applied on your Quarterly 941 return and goes against the EMPLOYER portion of taxes reported. The Refundable portion comes in, if and when your EMPLOYER FICA & Medicare Taxes are less than the Sick Leave paid.
For the EFMLEA: Employers are entitled to a REFUNDABLE tax credit equal to 100% of the Qualified Family leave wages paid by Employers for each Calendar Quarter in accordance with the new provisions under this act. The Qualified wages are capped at $200/day/employee up to a Maximum of $10,000/Quarter. This piece of the program operates in conjunction with other Benefits & Leave programs INCLUDING unemployment compensation.
So – the way I read this is that Employees should apply for Unemployment Benefits FIRST. The Amount of the EFMLEA benefits paid by the Employer is reduced by the amount the Employee receives from Unemployment insurance. These payments do not reduce the UC compensation that would normally be available to the employee.
In addition to the Contributions being provided by the State UC insurance, States will be reimbursed by the Fed Government under funding provided in this act and Employer UC rates should also not be affected or increased. Employers MUST notify their employees that they are eligible for this benefit.
Benefits paid under the Emergency Leave Benefits are NOT subject to Federal income taxes!!
Congress is working on a 2nd COVID-19 package however the details of that package are yet to be released. Per a press conference earlier today – potential inclusions in that package could be:
- Stimulus checks mailed direct to taxpayers in the amount of $1,000 per adult and $500 per child. However, before you go “Yeah” – they are suggesting this won’t happen until late April
- Extension for Tax Payments due on the 4/15 income tax return filing deadlines. Extending time to make any Federal Tax payments out to 7/15/20 with No interest and No penalties being accessed on the balance. However, it sounds like returns would need to be filed timely by 4/15 to take advantage of this offer. 6 month Extensions on TIME to file are also still available to extend your FILING, not your taxes due.
As information changes, I will be updating and adding to the information in this post. I hope this helps.