Families First Coronavirus Response Act (“FFCRA”) UPDATE
We posted about the Families First Coronavirus Response Act (FFCRA) after it was signed into law on March 18th. Today, it becomes effective.
A quick refresher.
The FFCRA applies to employees who have worked 30 or more days, and applies to employers who employ fewer than 500 employees. The law provides for paid time off for one of the following six reasons:
- the employee is subject to a federal, state or local quarantine or isolation order
- the employee has been advised to self-quarantine by a health care provider
- the employee is seeking a medical diagnosis for symptoms of COVID-19
- the employee is caring for someone who has been advised or ordered to quarantine
- the employee is caring for a son or daughter whose school or place of care has closed, or whose childcare provider is unavailable, because of COVID-19 precautions; or
- the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services
The law provides full-time covered employees up to 80 hours of paid time off for one of six reasons (see below), and provides part-time covered employees up to the number of hours of paid leave that the part-time employee works on average over a two-week period.
If the employee is seeking leave for any of the first three reasons, the employee is paid at either his or her regular rate or applicable minimum wage, whichever is higher, up to $511 per day, and $5110 in aggregate (that is, over two-week period).
If the employee is seeking leave for reasons 4 or 6, that employee is paid at 2/3 of his or her regular rate or 2/3 of the applicable minimum wage, whichever is higher, up to $200 p/d and $2000 in the aggregate.
If the employee is seeking leave for reason 5, that employee is paid at 2/3 regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 p/d and $12,000 in the aggregate (that is, over 12-week period, with two weeks of paid leave followed by 10 weeks of paid expanded family and medical leave).
Please note, the calculation should account for overtime the employee would have normally been scheduled to work.
Some updated notes.
Paid sick leave under the FFCRA does NOT carry over from one year to the next, and employees are NOT entitled to reimbursement for unused leave under this law. The leave is not intended as a gift, but as emergency relief where it is needed.
Note also that the law applies today, and does not apply to employees who have been recently laid off.
Unfortunately, we do not yet have guidance on the exemption for small businesses, but we can expect to receive guidance on that this month and will keep you informed as we learn more. However, in the meantime, you should document why your business meets the criteria; i.e., that you have fewer than 50 employees and why/how meeting your obligations under the FFCRA would affect the viability of your business.
A brief note on tax credits.
As mentioned in our prior notice, employers affected by the FFCRA qualify for a dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA (i.e., wages paid to an employee on leave under the law). These tax credits will also extend to amounts paid to maintain health insurance coverage for employees. The IRS has asserted that it will provide the credits as soon as possible, meaning we can expect that relief to be expedited. We have also learned that employers can seek an expedited advance from the IRS by submitting a streamlined claim form, but that form has not yet been made available. We will of course provide more information on this topic as soon as it becomes available.
Now, what to do with this information?
Most importantly, you will need to track your employees’ leave. We would advise using a spreadsheet to track the following data: each employee’s first date of leave; their return date; their reason for leave; any emergency leave hours available; all emergency leave hours used; any remaining emergency leave hours balance; and the reason for leave (i.e., reasons 1, 2, 3, 4, 5, or 6).
It is equally important for both employees and employers to maintain documentation. For employers, if an employee is not eligible for leave, you will need to document the reason he or she is not eligible. For employees, you should keep any documentation showing why you are eligible for leave.
If you are an employer, you should make a list of eligible employees (those employees who have been employed for 30 days or more), then create a chart to determine how much 80 hours of leave per qualifying employee will be, how much PTO is available per employee, and the total PTO bank cost per person. The chart might look like something like this:
This data is critical not only to understanding your overall costs under the FFCRA, but also for demonstrating your eligibility for tax credits and/or your eligibility for the small-business exemption. It is also critical to protect yourself in the event there is a dispute. For all these reasons and more, accurate tracking data is likely going to become crucial, both for employers and employee alike.
Please note, employers can expect to be penalized for disciplining or terminating employees for raising concerns under the law and/or taking leave under the law, as well as for any violations of the law. It is worth pointing, however, that employers who have acted “reasonably” and “in good faith” to comply with the law, but who have nevertheless violated the law, will not be penalized if they correct there error before April 18th. The Department of Labor has provided a useful guide for best practices, which can be found at https://www.dol.gov/agencies/whd/field-assistance-bulletins/2020-1.
There are many questions and concerns remaining, and many of them do not have direct answers yet. We at Attorneys Hartman, Chartered remain available to provide any assistance we can to employees and employers alike, and will continue to keep you updated as more information becomes available.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.