Yesterday, Congress passed the Family First Coronavirus Act (the “Act”), a bipartisan economic stimulus plan addressing the impact of COVID-19 on the United States across various fronts – from the expense of COVID-19 testing to food insecurity to lost wages. President Trump signed the bill shortly thereafter, and it becomes effective on April 2, 2020.
This alert addresses key questions relating to the Act’s provisions of most interest to employers: the Emergency Family and Medical Leave Expansion (“COVID FMLA”) and Emergency Paid Sick Leave (“COVID Paid Sick Leave”) Acts.
The Act significantly expands existing Family and Medical Leave Act (“FMLA”) requirements and extends paid sick leave coverage across the country through the end of this year.
Employers may elect to exclude employees who are health care providers or emergency responders from coverage; similar exclusions may be permitted by regulation of the Secretary of Labor following enactment of the Act.
COVID FMLA coverage is limited to only one type of leave. In order to qualify for COVID FMLA, an employee must be unable to work (or telework) due to a need to care for a son or daughter under 18 years of age if the child’s school or place of care has been closed or the child care provider is unavailable due to a COVID-19 public health emergency.
Employees with a qualifying need would be entitled to up to 12 weeks of COVID FMLA leave within a 12 month period as follows:
COVID Paid Sick Leave
COVID Paid Sick Leave more broadly applies when an employee is unable to work (or telework) andis subject to Federal, State or local quarantine or isolation order related to COVID-19;
The pay to employees under this Act works as follows:
In most cases, employees who take COVID Paid Sick Leave or COVID FMLA must be restored to their original positions upon their return. Employers with less than 25 employees are not required to reinstate an employee following COVID FMLA leave where:
The legislation authorizes the Secretary of Labor to issue regulations exempting small businesses with fewer than 50 employees from the COVID FMLA and Paid Sick Leave provisions when the requirements would jeopardize the viability of their businesses. In addition, businesses that do not meet the regular FMLA definition of employer (i.e., 50 or more employees in each working day during 20 or more calendar workweeks) will not be subject to civil action for violations of COVID FMLA requirements.
Employers who are required to provide COVID Paid Sick Leave and/or COVID FMLA will be entitled to refundable credit for the employer’s portion of the Social Security payroll tax equal to the full value of the qualified sick or family leave wages paid. The IRS will determine the applicable starting date and is expected to provide additional guidance on exactly how the tax credits will be applied.
Other states and localities have put in place or are considering additional relief measures for payroll costs related to COVID-19. For example, on March 8, New York City announced the “New York City Grant Retention Program” to provide financial assistance for small businesses impacted by COVID-19. Under this program, New York City is offering employers with 5 or fewer employees a grant to cover 40% of payroll costs for 2 months to help retain employees. Those businesses with fewer than 100 employees will be eligible for 0% interest loans for up to $75,000 to mitigate losses in profit. More information can be found at the following link: https://www1.nyc.gov/site/sbs/businesses/covid19-business-financial-assistance.page.
In addition, the Federal Small Business Administration has declared disasters in localities in a number of states, including New York, California, Washington, Connecticut, Massachusetts and others – which triggers the availability of small business loan assistance. Speak to an NFC attorney for guidance in navigating these programs.
Employers are required to post notice of the COVID Sick Leave provisions. A model notice is expected to be published within 7 days of enactment of the Act.
The Nukk-Freeman and Cerra COVID-19 Task Force is closely monitoring the rapidly changing legal landscape relating to the COVID-19 global pandemic. Please feel free to reach out to your NFC attorney or reach out to a member of our team.
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