President Signs Families First Coronavirus Response Act into Law
March 19, 2020
Publication| Labor & Employment
On March 18, 2020, President Donald Trump signed into law the Families First Coronavirus Response Act (the “Act”), to provide eligible workers with guaranteed paid sick and family leave and additional resources. Employers will initially pay for the sick and family leave, but eligible employers will be reimbursed by the federal government through refundable tax credits that offset the employers’ payroll tax.
COVID-19 PAID SICK LEAVE
Under the Act, employers with fewer than 500 employees must provide full-time employees with up to 80 hours of paid leave (for part-time employees, hours equal to the number of hours the employee works on average over a two-week period) if they are unable to telework and are:
- Subject to a quarantine or isolation order based upon the recommendation of a healthcare provider or federal, state, or local law due to exposure to the coronavirus;
- Experiencing symptoms of the coronavirus and seeking a medical diagnosis;
- Caring for an individual subject to a federal, state, or local quarantine or isolation order or advised to self-quarantine due to COVID-19 concerns;
- Caring for their child as a result of childcare or school closures or if the childcare provider is unavailable due to COVID-19 precautions; or
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Paid sick time is available for immediate use regardless of how long the employee has been employed. Workers will get 100% of their normal salary, up to $511 per day and $5,110 in total, if the employee is sick or quarantined, and two-thirds of their regular pay, up to $200 per day and $2,000 in aggregate, if the employee is caring for someone else.
Employers may not require the use of other paid leave provided by the employer before the use of this federal paid leave, or require employees to find a replacement to cover their hours.
COVID-19 PAID FMLA BENEFIT/EMERGENCY FMLA
Pursuant to the Act, employers with fewer than 500 employees will be required to provide up to 12 weeks of paid family leave, at two-thirds of an employee’s pay (for the number of hours the employee otherwise would have been scheduled), after the first 10 days, which are unpaid. This emergency FMLA leave is for employees who have been employed for at least 30 days and who are caring for children under the age of 18 whose schools or daycares are closed or whose childcare provider is unavailable due to the COVID-19 public health emergency declared by a federal, state, or local official. This paid FMLA benefit is capped at $200 a day and $10,000 in total.
Employers with 25 or more employees will have the same obligations under FMLA to return the employee to the same or equivalent position upon return, but those with fewer than 25 employees under specific conditions do not have to restore employees to their previous positions. Employers cannot force workers to use employer-provided paid time off before receiving this benefit, but employees can choose to use accrued paid time off, such as sick or vacation time, to cover the unpaid 10-day waiting period.
The Act provides the U.S. Department of Labor with the authority to create regulations that can exempt businesses with fewer than 50 employees from these requirements when the imposition of the requirements would jeopardize the viability of the business as a going concern. Healthcare providers such as hospitals and nursing homes are also exempt from this new law.
GIG WORKERS AND INDEPENDENT CONTRACTORS
Gig workers and self-employed individuals will also receive similar benefits via a federal tax credit.
Additionally, the Act provides free coronavirus testing for those who need it and expands unemployment insurance benefits for workers. The Act also boosts federal funding for Medicaid and includes waivers for U.S. public school systems to allow school lunch funds to be redirected to provide meals for children during the outbreak.
A model notice will be made available by the Secretary of Labor within seven days of the Act’s enactment for employers to post to meet the Act’s posting requirements.
The Act goes into effect no later than April 2, 2020 and remains in effect until December 31, 2020.
If you have any questions, please contact a member of Richards, Layton & Finger’s Labor and Employment Group.