THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA) BUSINESS IMPACT: HOW WILL IT AFFECT YOU?
The Families First Coronavirus Response Act (FFCRA or Act) business impact is being felt across the country, and in some cases, making matters more complicated for employers. However, when utilized correctly, FFCRA is a quick government response to prevent further spread of the COVID-19 virus while also limiting the financial impact on employees and employers.
The purpose of the FFCRA is to ensure that workers are not forced to choose between their paychecks and public health measures, while at the same time reimbursing businesses for their loss of productivity. FFCRA requires private employers with fewer than 500 employees to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. However, the employer will also be reimbursed with tax credits for the cost of providing the sick leave. FFCRA is a temporary act, effective from April 1, 2020 through December 31, 2020.
On March 25, 2020, The US Department of Labor’s Wage and Hour Division (DOL) issued the required poster that tells employers covered under the FFCRA what they need to provide to their employees. Employers are required to post a notice of the FFCRA in a conspicuous place on their premises, emailing or mailing the notice to employees directly, or posting it on an employee intranet or external website. The poster lists the six specific qualifying reasons for leave related to COVID-19.
Generally, the Act provides that employers must provide to all employees:
– Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay, or up to $511 daily and $5,110 total, where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
– Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay, or up to $200 daily and $2,000 total, because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.
– A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
– Note that a “health care provider” may be excluded by their employer from paid sick leave and/or FMLA. Call Gardi & Haught today to find out if your employees fall under this exclusion.
An employer covered by the Act must provide the following to their employees
– Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds (2/3) the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
– Note that FFCRA defines “employees” as having worked for your business for at least 30 days prior to their leave request.
Small Business Exceptions
An employer, including a religious or nonprofit organization with fewer than 50 employees is exempt from providing emergency paid sick leave and expanded FMLA, when children are home due to school or childcare center closings, if doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:
– The provision of emergency paid sick leave or expanded FMLA would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
– The absence of the employee or employees requesting emergency paid sick leave or expanded FMLA would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
– If the worksite closes prior to an employee taking paid sick leave or expanded FMLA, the employee will not get paid sick leave or expanded FMLA.
– If the worksite closes while an employee is on paid sick leave or expanded FMLA, the employer must pay for any paid sick leave or expanded FMLA the employee has used before the employer closed. However, the employee will not get paid sick leave or expanded FMLA as of the date the employer closed the worksite, regardless of the reason for the closure.
Existing Paid Leave Policy vs FFCLA Paid Leave
An employer covered by this Act may only satisfy their employees’ paid sick leave requirement of FFCRA with the company’s existing paid leave policy IF the employee AGREES. Paid sick leave under the Act is in ADDITION to your employee’s existing paid sick leave and other entitlements. You may not require your employees to use provided or accrued paid vacation, personal, medical, or sick leave before the paid sick leave provided for in the Act. You also may not require employees to use provided or accrued paid vacation, personal, medical, or sick leave concurrently with the paid sick leave provided for in the Act. However, if you and your employee AGREE, your employee may use preexisting leave entitlements to supplement the amount he or she receives from paid sick leave, up to the employees’ normal salary. Note, however, that the employer is not entitled to a tax credit for any paid sick leave that is not required to be paid or is in excess of the limits set forth under the Act.
The DOL administers and enforces the new law’s paid leave requirements and has the authority to investigate and enforce compliance. Also, employers may not discharge, discipline, or otherwise discriminate against an employee who lawfully takes paid sick leave or expanded FMLA under the FFCRA, files a complaint, or institutes a proceeding under or related to this Act. Employers in violation of the provisions of the FFCRA will be subject to penalties and enforcement by DOL.
Gardi & Haught, Ltd. has the experienced corporate attorneys to guide you through this time to prevent economic loss and injury to your business. If you have questions about how The Families First Coronavirus Response Act (FFCRA) business impact and how to effectively comply with the Act, contact Gardi & Haught, Ltd. for a free consultation today or click on our free case evaluation button below.