Three New Employment Laws That Could Impact Your Business
Kenneth M. Krock
On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA). Because this law affects many of our clients, we are sending out this brief update.
The FFCRA contains three different laws and provides for an expansion of the Family Medical Leave Act (FMLA), provides for 80 hours of paid sick leave for employees affected by COVID-19, and provides tax credits to employers to help offset the costs of the sick leave. The key to the FFCRA is that it applies to employees who request leave or have to take leave for one of the purposes allowed under the provisions of the FFCRA (see below).
This law will go into effect on or before April 2, 2020 and will remain in effect until December 31, 2020.
The Emergency Family Medical Leave Act covers all employers with 500 or less employees (although there may be exceptions for some employers with 50 or less employees) and is eligible to employees who have been employed for 30 days.
All covered Employers must allow 12 weeks for medical leave (job-protected leave) for any employee requesting leave to care for the employee’s child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency. The first 10 days are unpaid but employees may elect to use accrued vacation, personal leave or sick leave for these 10 days. After 10 days the full-time employees must be paid 2/3 of the employee’s regular rate of pay. However, the pay entitlement is limited to $200 per day and $10,000.00 in the aggregate per employee. After the 10-day period, part-time employees are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking leave under the Act. If the employee has worked less than 6 months prior to leave, then the employee is entitled to their reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.
Note that the FMLA also already has in it an anti-retaliation provision for taking adverse employment actions against an employee requesting leave. It should be noted that the FMLA Expansion means that the other provisions of the FMLA, including the requirement that employers leave open the job of the person on leave and the prohibition against employers retaliating against employees who invoke the FMLA, are now applicable to employees requesting leave under this expansion. Please note however that there is specific exception for employers with less than 25 employees under certain conditions.
PAID SICK LEAVE
The Emergency Paid Leave Act covers all employers with 500 or less employees regardless of length of employment. All covered Employers must provide Paid Sick Leave for employees that request leave or require leave for any of the following reasons: (1) compliance with a government quarantine or isolation order due to COVID-19; (2) a health care provider advises self-isolation due to COVID-19; (3) experiencing COVID-19 symptoms and seeking medical diagnosis; (4) care for an at-risk family member complying with a government quarantine requirement or recommendation by a health care provider due to COVID-19 concerns; and (5) care for a child if the child’s school or place of care has been closed due to a public emergency; or (6) employee is experiencing any other substantially similar conditions specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. Paid Sick Leave is at least 80 hours of leave paid at the employee’s regular pay rate. Part-time employees are entitled to be paid for a number of hours equal to the number of hours that such employee works, on average, over a two-week period. However, the employer need only pay 67% of the employee’s regular rate if the leave is taken pursuant to items (4) – (6) above. The cap on wages under the Act is up to $511 per day up to $5,111 total per employee for their own use and up to $200 per day up to $2,000 total to care for reasons (4)-(6). It is unlawful for an employer to discharge, discipline, or in any manner discriminate against an employee who takes leave, files a complaint, institutes any proceeding, or testifies in or about any proceeding under the Act.
To compensate Employers for the additional burden the FMLA expansion and mandatory Paid Sick Leave provisions may have on businesses, employers are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages or qualified family leave wages paid by employers for each calendar quarter with certain caps. The credit for sick leave wages is capped at $511 per day ($200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter. The credit for FMLA expansion wages is capped at $200 per day for each individual up to $10,000 total per calendar quarter. The tax credits provided by the bill are allowed under Internal Revenue Code Section 3111, on wages paid with respect to the employment of all employees of the employer.
For more information contact Kenneth M. Krock in Rapp & Krock’s Labor and Employment group.
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