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Communication on Families First Coronavirus Response Act Image

Communication on Families First Coronavirus Response Act

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The Families First Coronavirus Response Act was signed into law on March 18, 2020, and takes effect on April 1, 2020. Employers across the nation will be obligated under the Act to provide expansive leave to employees. Below are key points from the Act for employers to consider regarding the leave:

Emergency Family and Medical Leave Expansion Act (EFMLA)

  • Applicability. Employers with less than 500 employees, must provide paid family and medical leave to any employee, who has worked at least 30 days for the employer, up to 12 workweeks of leave if the employee cannot work or telework because the employee must care for his/her child because (1) the child’s school or place of care is closed due to a public health emergency (“PHE”); or (2) the child’s care provider is unavailable due to a PHE.
    • PHE under the Act is an emergency with respect to COVID-19 declared by a federal, state, or local authority. For example, the school is closed because Governor Walz order the schools to close and the employee is not able to work remotely.
  • First Ten (10) Days of Leave. The first ten (10) days of EFMLA leave may be unpaid, but the employee may elect to use any other accrued paid leave for such time, including Emergency Paid Sick Leave provided under the Families First Coronavirus Response Act.
  • Paid Leave. After the first ten (10) days of EFMLA leave, the employee must be paid at a rate of not less than two-thirds (2/3) of the employee’s regular rate of pay but capped at $200/day and $10,000 total. Payment for each day is calculated based on the number of hours employee would have worked. If the employee’s number of hours fluctuate, hours should be based on average hours the employee worked per day in the preceding 6-month period; or, if employed less than 6 months, the reasonable expectation of average hours per day at time of hire.
  • Job-Protection. Restoring employees to their same position and seniority following leave still applies as it does under the Family Medical Leave Act of 1993, except for employers with less than 25 employees, where (1) the employee was on EMFLA leave; and (2) his/her position was eliminated because of economic conditions or changes in operating conditions of the employer because of the PHE. These excepted employers with less, must still nevertheless:
    • Make reasonable efforts to place the employee in an equivalent position; or if such efforts fail;
    • Make reasonable efforts to place the employee in an equivalent position if one becomes available in the next year from either (a) the date the employee’s need for EFMLA leave concludes; or (b) the date 12 weeks after the date need for EFMLA leave began.
  • Forthcoming Regulations and Possible Exemptions. The EFMLA authorizes the United States Secretary of Labor to issue regulations exempting small businesses with less than 50 employees from providing this leave when such would jeopardize the viability of the business as a going concern. But, there is no guarantee this will occur. As of now, all employees with less than 500 employees are subject to and must provide the above-described leave to eligible employees.

Emergency Paid Sick Leave Act

  • Applicability. Employers with less than 500 employees must provide the following paid sick time to employees: (1) 80 hours for full-time employees; and (2) part-time employees must receive at least the same hours that such employee worked on average over a 2-week period.
  • Eligibility. Employees may use this leave immediately. The leave will not carry over from year to year and ends on the employees next scheduled work shift immediately following the termination of the need for leave.
    • Employer cannot require employee to find a replacement to cover his/her shift;
    • Employer cannot require employee to first exhaust other paid leave.
  • Use of Paid Leave. An employee may use this emergency paid leave if he/she is unable to work or telework because of any of the following reasons:
    1. Employee is under a federal, state, or local quarantine or an isolation order because of COVID-19;
    2. Health care provider recommended that the employee self-quarantine because of COVID-19;
    3. Employee is experiencing symptoms of COVID-19 and is seeking medical diagnosis;
    4. Employee is caring for an individual who is subject to federal, state, or local quarantine, isolation order, or was advised by health care provider to self-quarantine because of COVID-19;
    5. Employee is caring for child whose school or place of care closed, or whose care provider is unavailable because of COVID-19 precautions
    6. Employee is experiencing a condition substantially similar to COVID-19 specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.

Pay for this emergency sick leave is dependent upon the reason for leave. If the employee uses the paid leave for reasons 1, 2, or 3 above, the employee must be paid the greater of (a) his/her regular rate of pay per hour; (b) the federal minimum wage per hour; or (c) the state minimum wage per hour, with a cap of $511 per day and $5,110 total.

If leave is for reasons 4, 5, or 6 above, the employee must be paid the greater of two-thirds (2/3) (a) his/her regular rate of pay per hour; (b) the federal minimum wage per hour; or (c) the state minimum wage per hour, with a cap of $200 per day and $2,000 total.

  • Anti-Discrimination and Retaliation. Employers shall not discharge, discipline, or discriminate or retaliate against any employee exercising his/her rights under the Families First Coronavirus Response Act.
  • Forthcoming Regulations and Possible Exemptions.  The United States Department of Labor (DOL) has the same authority to implement regulations and exemptions for smaller businesses as described above.

Tax Credits for Paid Sick and Paid Family and Medical Leave

To ease the financial burden on employers, the Families First Coronavirus Response Act offers employers tax credit depending on the employee’s use of paid leave. In brief, credit is available for the employer against the tax imposed by 26 USC §§ 3111(a), 3221(a) for each calendar quarter in an amount equal to 100% of the qualified sick leave wages paid for the quarter, but such wages considered shall not exceed:

  • $511/day (or portion of day) per employee if leave is for reasons 1 through 3 of the uses of emergency paid leave described above; or
  • $200/day (or portion of day) per employee if leave is for any other qualified sick leave wages.

There are other limitations and refundability provisions implemented in the Act. Employers should contact one of Gislason & Hunter LLP’s tax attorneys or their accountant for further information.

Additional Resources

The DOL will be developing model notices to be displayed at employers’ workplaces outlining employee’s rights under the above-described acts. Employers are encouraged to check the DOL’s website for updates on availability of notice posters. Employers should also consider the following resources, during this time:

This notice regarding the Families First Coronavirus Response Act is provided to serve as an overview of the new law and does not constitute legal advice. For additional information, please contact members of Gislason & Hunter LLP’s Labor and Employment Practice Group, attorneys Cory Genelin, Brittany King-Asamoa, David Sturges, or Jennifer Lurken at 507.387.1115.