President Signs Federal Legislation to Address COVID-19 Pandemic
Friends,
We have received many questions regarding the federal government’s response to the devastating COVID-19 outbreak. We have therefore prepared this brief primer to help you understand the benefits offered to workers and employers by this emergency legislation. Please click through to our website for the full article.
On March 18, 2020, Congress signed the Families First Coronavirus Response Act (“FFCRA”). Unless otherwise noted, the provisions are in effect from April 15 and through December 31, 2020. The FFCRA brings much needed relief for many, but unfortunately excludes many more. Below is a summary of what benefits are available and who is eligible to receive them.
Emergency Paid Sick Leave Act
The FFCRA entitles employees to up to two weeks of paid sick leave if the employee is “unable to work (or telework)” because the employee: (1) is subject to a federal, state, or local quarantine order; (2) has been advised to self-quarantine by a health care provider; (3) is experiencing symptoms of COVID-19 and is seeking medical diagnosis; (4) caring for an individual subject to a quarantine order or has been advised to self-quarantine; or (5) caring for a child whose school or child-care provider has closed due to COVID-19.
Importantly, the FFCRA only covers employers with fewer than 500 employees. Employers with fewer than 50 employees may be entitled to certain necessary exemptions as well.
Under the FFCRA, full-time employees are entitled to 80 hours of paid sick leave. Part-time employees are entitled to “the number of hours that such employee works, on average, over a 2-week period.” The rate of sick pay is the employee’s regular rate of pay or the applicable minimum wage, whichever is greater. Employees taking leave to care for a covered family member will be compensated at two-thirds (2/3) their regular rate of pay. Compensation under the FFCRA is capped at $511 per day and $5,110 in total for leave related to quarantines or illness, and $200 per day or $2,000 in total for uses related to caring for children or others impacted.
The FFCRA is in addition to any other benefits an employee has. Employees do not lose any rights they have under state and local paid leave laws, collective bargaining agreements, or existing employer policies. An employer may not require an employee to use their accrued paid leave before using emergency leave under this law. These benefits are available no matter how long an employee has worked for an employer.
Sick leave under the FFCRA does not carry over from year to year, and expires when the employee reports back to work after the conditions causing the employee to use the sick leave have ended.
With respect to multiemployer plans, responsibility for providing family leave and/or paid sick leave remains on the employer, who may satisfy the obligation through the fund if the employer makes contributions to the fund for that purpose.
Emergency Family Medical Leave
The FFCRA also temporarily expands the Family Medical Leave Act (FMLA). Employers with fewer than 500 employees must permit employees to take up to 12 weeks of leave if they are unable to work (or telework) due to a need to care for a son or daughter under age 18 if their school or place of care has been closed, or if their child care provider is unavailable due to a public health emergency related to COVID-19.
The first 10 days of leave under this section are unpaid, but the remaining time off must be compensated. The employee may substitute any available paid leave (including emergency sick leave under this Act) for unpaid leave. Therefore, eligible employees should consider using their sick time first to avoid going without pay for the first ten days. Employees may receive up to a maximum of $200 per day and $10,000 total under this portion of the FFCRA.
Under the FFCRA, employees will be compensated for the number of hours they would otherwise be normally scheduled to work. For employees with varied schedules, the hours will be the average number the employee was scheduled per day over the previous 6 months. New employees will be compensated for the average daily hours they were reasonably expected to work at the time of hiring.
Generally, eligible employees who take emergency paid leave are entitled to be restored to the position they held when the leave commenced, or to obtain an equivalent position with their employer (this rule is limited for employers with fewer than 25 employees).
Coverage for COVID-19 Testing
Group health plans and insurers are required under the law to cover specific services related to testing for the virus that causes COVID-19. Insurers offering group or individual coverage shall cover and shall not impose any cost sharing (including deductibles and copays) for COVID-19 testing, as well as health care provider office visits, urgent care center visits, and emergency room visits. The FFCRA also requires coverage of testing with no cost sharing under the Medicare Advantage Program, Medicaid, and the State Children’s Health Insurance Program.
The new requirements would apply to all group health plans, including self-insured plans and grandfathered plans under the Affordable Care Act. These requirements took effect on March 18, 2020.
Tax Credits for Employers
The FFCRA provides refundable tax credits to offset the cost of providing paid sick and family leave. The bill provides a refundable tax credit worth 100 percent of qualified leave paid by an employer for each calendar quarter through the end of 2020.
The tax credit may be increased for costs associated with qualified health plan expenses. The credit amounts may be increased by the amount of the employer’s group health plan expenses that are “properly allocated” to the qualified emergency leave and sick leave wages. Health plan expenses are “properly allocated” to qualified wages if made on a pro rata basis (among covered employees and periods of coverage).
Conclusion
The FFCRA represents the early stages of a federal response to the COVID-19 outbreak. More federal legislation likely is on its way over the coming days and weeks. If you have further questions please contact your labor law counsel.