On March 18, 2020, a new law was passed for workers impacted by COVID-19. The law is called Families First Coronavirus Response Act, and it goes into effect in 15 days. All public and private employers with under 500 employees are covered by the Act.
There are two parts of the law: federal emergency family and medical leave, and emergency paid sick leave. What follows is information about each part of the Act and how the law will affect your practice and team.
Who is eligible for federal emergency family and medical leave?
Under the Act, employees are eligible for up to 12 weeks of paid leave. To be eligible, an employee must have been employed for at least 30 calendar days by the practice. The leave covers employees who are unable to work due to caring for their child (18 years or younger) because school is closed or childcare providers are unavailable because of a public health emergency (as we are experiencing in Oregon and Washington). The leave also covers workers who have been exposed to COVID-19 and whose physical presence in the practice would jeopardize the health of others.
The first 10 days of emergency family and medical leave are unpaid. During this unpaid period, employees can use any other available paid leave (PTO, paid sick leave), and this includes emergency paid sick leave covered later in this blog.
How does paid emergency family and medical leave work?
After eligible employees complete the first 10 days of unpaid leave, employers must pay up to ten remaining weeks of leave at a rate not less than two-thirds of the employee’s regular rate, not to exceed $200 per day and $10,000 for the ten-week period. If the employee works a varied schedule, use an average number of scheduled work hours over the six-month period just prior to the date of leave.
Practices with 25 or fewer employees are not required to restore an employee to their position once leave has been exhausted if the position is no longer available due to economic conditions or other changes caused by the public health emergency. Hopefully this would not be the case. If needed, though, this provides protection for small employers who would need to make changes in staffing levels due to economic fallout from the health crisis.
Are small employers exempt from offering leave?
The Act does provide a hardship exemption for small businesses with fewer than 50 employees if the requirements of paid emergency family and medical leave jeopardize the viability of the business going forward. Details for how to file for an exemption will be forthcoming from the government.
What do you need to know about the second part of the Act: emergency paid sick leave?
Employers are required to provide 80 hours of paid sick leave to full-time employees. Part-time employees are entitled to hours of paid sick leave equal to the number of hours they average working during a two-week period. Employees are eligible regardless of how long they have worked at the practice.
Employers are required to pay emergency sick leave for any of the following qualifying reasons:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 as is seeking a medical diagnosis.
- The employee is caring for an individual who is subject to an order as described in 1 or 2 above.
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable due to COVID-19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
How much are employees paid for emergency sick leave?
If employees take leave for reasons 1, 2, or 3 above, the employee must be paid at their regular rate of pay assuming the regular rate of pay is greater than minimum wage. If the employee is taking leave for reasons 4, 5, or 6, the employee must be paid two-thirds of their regular rate of pay.
These amounts are subject to caps, just like with emergency family and medical leave. For reasons 1, 2, and 3, the daily rate of pay is capped at $511. The two-week cap is $5,111. For reasons 4, 5, and 6, the daily cap is $200, and the total cap for the two-week period of leave is $2,000.
How soon can employees take emergency sick leave?
Employees can take emergency sick leave immediately with the effective date of the Act.
Are small employers exempt from offering paid sick leave?
The Act does provide a hardship exemption for small businesses with fewer than 50 employees, just like with family and medical leave.
What is available to help practices provide leave under the Act?
100% of qualified wages paid for leave will offset, or act as a credit against, the employer’s quarterly tax. The IRS will apply the credit against any employer-related payroll tax liability, with any excess refunded to the employer.
What is next? What about low-interest SBA loans?
Congress is at work on other provisions to provide aid to small businesses and the American public. We will keep you posted.
Also, the SBA is providing low interest rate loans to businesses (interest rates from 2% – 2.65%). Here is the link to learn more: www.sba.gov/disaster