TAUC Government Affairs Update: Family & Paid Sick Leave
UPDATES 4/1: The Department of Labor has issued a new temporary rule regarding the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA).
Also, the Department of Labor has created a web page of Frequently Asked Questions about FFCRA. We encourage readers to consult this page for continuing updates and clarifications on the scope of the bill, including its paid family and sick leave provisions (see questions 58 & 59 specifically). TAUC has consulted with numerous experts on the implications of the family/sick leave provisions on our industry. At this time much remains unclear, but we will continue to engage with the Department of Labor and urge clarification as soon as possible.
MARCH 19 — A bill to provide employees with paid sick and family leave as a result of the COVID-19 outbreak has been passed by Congress and signed into law by President Trump with lightning speed as part of the initial response to this public health crisis.
The bill — HR 6201, the Families First Coronavirus Response Act (FFCRA) — is the second of what is expected to be multiple packages to deal with the public health and economic fallout from the COVID-19 situation. The first was an $8.3 billion funding package signed into law on March 6th to fund prevention efforts and research.
The FFCRA includes provisions intended to bolster many elements of the medical response to the coronavirus, expand food assistance to low-income families, expand unemployment benefits, and provide emergency funding for programs that assist the elderly. Of particular interest to TAUC members, the legislation includes a significant expansion of paid sick leave and family leave under the FMLA. It would also create new tax credits for employers of fewer than 500 individuals to cover the costs associated with providing such leave to their workers.
Emergency Family Leave
The bill creates an emergency paid leave program requiring private sector employers with fewer than 500 workers to provide up to 12 weeks of job-protected leave under the Family and Medical Leave Act (FMLA) for employees who are unable to work or telework because they have to care for a child younger than 18 whose school or day care has closed because of the coronavirus.
Under this program:
- The first 10 days of leave could be unpaid (though a worker could choose to use accrued vacation days, personal leave, or other available paid leave for unpaid time).
- In the following the 10-day period, workers will receive a benefit from their employers that will be at least two-thirds of their normal pay rate. This leave assistance to workers would be capped at $200 per day or $10,000 total.
This program will stay in place through Dec. 31, 2020.
The bill also gives the Department of Labor Department the authority to issue regulations to exempt small businesses with fewer than 50 employees from the paid leave requirements if it is found that it would jeopardize the viability of the business.
Employers with fewer than 25 workers are exempt from the requirement to restore an employee's original position if it no longer exists because of economic conditions or changes to operations due to the public health emergency. The employer would have to have made reasonable efforts to restore the employee to an equivalent position.
FFCRA also allows employers who are signatory to a multiemployer collective bargaining agreement to meet their obligations under this new program by contributing to a fund or plan that provides paid family and medical leave.
Emergency Sick Leave
In addition, FFCRA creates a requirement that private sector employers with fewer than 500 workers and government entities would have to provide employees who are unable to work or telework with immediate paid sick time off to:
- Comply with a federal, state, or local quarantine or isolation order.
- Self-quarantine per a health-care provider's advice.
- Obtain a medical diagnosis for coronavirus.
- Care for an individual who is in quarantine or for a child whose school or day care has closed due to coronavirus.
Under the Bill:
- Full-time employees would receive 80 hours of sick leave under the new emergency leave program.
- Part-time workers would be granted time off that's equivalent to their scheduled or normal work hours in a two-week period.
Paid sick time wouldn't carry over from year to year.
Workers will have to be paid:
- At least their normal wage or the federal, state, or local minimum wage, whichever is greater.
- Two-thirds of wages for taking leave to care for another individual or child.
- Leave assistance would be capped at $5,110 for a worker's quarantine or diagnosis and at $2,000 to provide care for another individual or child.
In the case of an employee whose work schedule varies from week to week, to the extent an employer cannot determine with certainty the number of hours the employee would have worked had they not taken leave, the employer is required to provide a number equal to the average number of hours that the employee was scheduled to work per day over the 6-month period ending on the start date of the employee's leave, including hours for which the employee took leave of any type. If the employee did not work over that period, the number shifts to the "reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work." This vague phrase will most likely be clarified by DOL during implementation.
Employers are prohibited from:
- Requiring a worker to use any other available paid leave before using the sick time.
- Requiring a worker to find a replacement to cover their hours during time off.
- Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer.
An employer could be subject to civil penalties for a violation of paid sick leave requirements.
Further, the bill authorizes DOL to issue regulations to exempt small businesses with fewer than 50 employees from the paid leave requirements if it is found that it would jeopardize the viability of the business. The Bill also allows employers who are signatory to a multiemployer collective bargaining agreement to meet their obligations under this new program by contributing to a fund or plan that provides paid emergency sick leave.
Employer Tax Credits
The measure provides refundable tax credits to employers to cover wages paid to employees while they are taking time off under the bill's sick leave and family leave programs. Credits will be against employers' payroll tax payments.
The sick leave credit for each employee is for wages of as much as $511 per day while the employee is receiving paid sick leave because they are quarantined, or $200 if they are caring for someone else who is quarantined or their child's school is closed.
The family leave credit for each employee is for wages of as much as $200 per day while the employee is receiving paid leave, or an aggregate of $10,000.
Beyond the wage limits set out in the bill, both the paid sick leave and family leave credits are increased to include amounts employers pay for the employee's health plan coverage while they are on leave.
Wages paid under the paid sick leave and family leave programs won't subject to the employer payroll tax. The credits will also be increased to cover employers' 1.45% Medicare tax.
The credit will be in effect for wages through the end of 2020.
If you have any questions, please contact Todd Mustard, Vice President of Industry Innovation and Government Affairs, at email@example.com.