UPDATED – Action List for Families First Coronavirus Response Act

On March 18, 2020, the President signed the Families First Coronavirus Response Act (“FFCRA”) into law. On March 25, 2020, the U.S. Department of Labor issued guidance for employers. We anticipate this DOL guidance is the first of many updates to come, and we will update you when new information is available.

Highlights of New DOL Guidance:

• Effective Date Change: The emergency paid sick leave provisions of the EPSL will be available on April 1, 2020 (rather than April 2, 2020, as suggested in previous guidance), and will remain in effect until December 31, 2020.

• Delayed Penalties for Noncompliance: Until April 30, 2020, the U.S. Department of Labor will not enforce the penalty provisions against employers who violate the FFCRA paid leave provisions so long as employers can demonstrate that they have acted reasonably and in good faith to comply with FFCRA (establishing “good faith” is discussed in detail below). After April 30, 2020, employers who violate FFCRA’s Paid Sick Leave provisions will be subject to the penalties imposed by the Fair Labor Standards Act, and employers who violate FFCRA’s Emergency FMLA leave provisions will be subject to the penalties imposed by the FMLA.

FFCRA Emergency Paid Sick Leave

If any employee is unable to report to work (or telework) because he or she is:

1. Subject to a federal/state/local quarantine or isolation order relating to COVID-19;
2. Advised by a health care provider to self-quarantine due to concerns relating to COVID-19; or
3. Experiencing symptoms of COVID-19 and awaiting diagnosis;

Then, the employee is eligible for paid sick leave at the employee’s regular rate of pay.

• Full-time employees are entitled to receive 80 hours of paid sick leave.
• Part-time employees are entitled to receive an amount of paid sick leave equivalent to the average number of hours they work during a two-week period.
• Paid Sick Leave is capped for these three circumstances is capped at $511.00 per day, up to a maximum total of $5,110.00.
• It is unclear whether a “shelter in place” order issued by a federal, state, or local government is equivalent to a quarantine or isolation order such that the employee would be entitled to paid sick leave. We anticipate more guidance on this topic, and we will update this summary when we have it.

If any employee is unable to report to work (or telework) because he or she is:

1. Caring for an individual subject or advised to quarantine or self-isolate; or
2. Caring for his or her son or daughter if their school or place of care has been closed, or childcare is unavailable due to COVID-19 precautions; or
3. 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;

Then, the employee is eligible for paid sick leave at two-thirds the employee’s regular rate of pay.

• Full-time employees are entitled to receive 80 hours of paid sick leave.
• Part-time employees are entitled to receive an amount of paid sick leave equivalent to the average number of hours they work during a two-week period.
• Paid Sick Leave for these three circumstances is capped at $200.00 per day, up to a maximum total of $2,000.00.

Public Health Emergency FMLA Leave

• Available to any employee who has been on the employer’s payroll for at least 30 calendar days who is unable to work (or telework) due to a need to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency.
• The first 10 days of Emergency FMLA Leave are unpaid, though the employee is eligible for 2 weeks of FFCRA Emergency Paid Sick Leave, as discussed above.
• After the initial ten-day period expires, employees are to be paid at a rate that is “at least two-thirds of the regular rate” the employee would have earned under a normal work schedule, BUT the amount of required pay for leave is limited to no more than $200 per day and $10,000 total.
• Employees can receive up to 12 weeks of leave in all, but the right to leave ends when the need for the leave ends.

• Employers may not require employees to exhaust existing paid leave during this time period.
• Emergency FMLA leave is job-protected – employers must restore employees to their prior positions (or an equivalent) when their need for leave ends. 

The following conditions apply to all paid leave provided for in FFCRA, both Paid Sick Leave (whether at the full rate or two-thirds rate) and Paid Emergency FMLA leave:

• Employers of health care providers or emergency responders may elect to exclude such employees from eligibility for the leave provided under the FFCRA.
• Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
• Employers must post a notice of FFCRA rights in a conspicuous place on its premises. The model notice can be found on the U.S. DOL website at: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf. The model notice will be posted this week.
• Employers may not require an employee to exhaust “other paid leave provided by an employer” before using emergency paid sick leave.
• Employers may not retaliate against employees for taking paid leave or for initiating a complaint related to the rights provided to employees under the FFCRA.

Employer Payroll Tax Credits

• Employers will receive refundable payroll tax credits equal to 100% of wages paid to employees who take FFCRA’s Paid Sick Leave or Paid Emergency FMLA Leave. 
• The credit is capped at $511 per day per employee while the employee is receiving paid sick leave to care for themselves, or $200 if the sick or family leave is to care for a family member or child whose school is closed.
• Employers are also eligible to receive payroll tax credits to reimburse them for the cost of maintaining employees’ health insurance benefits while they are out on leave provided by the FFCRA.
• The tax credits are applied against withheld federal income tax, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.  If the amount of credit exceeds the employer’s payroll tax liability, the excess amount will be refunded to the employer.
• The payroll tax credit is only available to reimburse employers for FFCRA sick leave wages paid between April 1, 2020 and December 31, 2020.
• The IRS will be issuing guidance on the process for crediting the cost of providing paid leave against the employer’s payroll and the process for obtaining a refund from the IRS if the quarterly payroll tax does not sufficiently reimburse the employer for the cost of providing the paid leave.
• The IRS has stated that it will implement a mechanism for employers to obtain expedited refunds.

Penalties for Non-Compliance

• Until April 30, 2020, the U.S. Department of Labor will not enforce the penalty provisions against employers who violate the FFCRA paid leave provisions so long as employers can demonstrate that they have acted reasonably and in good faith to comply with FFCRA. Employers establish that they acted in “good faith” by: (1) remedying any violations and making the employee whole as soon as practicable; (2) demonstrating that they did not willfully violate FFCRA’s requirements; and (3) committing in writing that they will comply with FFCRA in the future.