On March 18, 2020 the federal government signed the Families First Coronavirus Response Act in response to the global COVID-19 pandemic. There are several parts to this law including:
- A new requirement for employers with between 1 and 500 employees to provide emergency paid sick leave to employees under certain situations,
- An extension of the federal Family and Medical Leave Act (FMLA),
- Tax credits for small businesses to reimburse employers for wages paid under the new emergency paid sick leave and FMLA extension, and
- A requirement for health insurance providers to provide testing for COVID-19 at no cost to individuals needing testing.
This new law is to take effect within 15 days of enactment (April 2, 2020). It’s important to note that since this law passed through Congress so quickly there are a number of items still awaiting further guidance or regulations from government agencies. All parts of the Families First Coronavirus Response Act are currently set to expire on December 31, 2020.
The new FMLA expansion applies to all employers with 1-500 employees. (Note: The previously existing FMLA rules still apply only to employers with more than 50 employees). Employees who have worked for the company for at least 30 days are entitled to up to 12 weeks off of work if they are unable to work (or work remotely) because of the need to care for their son or daughter, under the age of 18, whose school or child care provider is closed due to a public health emergency as determined by local, state, or federal government.
The first 10 days of the new FMLA expansion are unpaid. An employee can elect to use accrued paid time off for the first 10 days if they choose (which includes the new emergency paid sick leave described in more detail below). However, an employer cannot require an employee to use accrued paid time off during this period.
After the first 10 days, employees must be paid at least 2/3 of their regular wage, up to a maximum of $200 per day, for each day of leave up to a maximum of $10,000.
Emergency Paid Sick Leave Requirement
Again, this applies to all employers with 1-500 employees. The new emergency paid sick leave must be available to all employees regardless of length of employment or part time or full time status. Full time employees are entitled to up to 80 hours of emergency paid sick leave. Part time employees are entitled to a maximum paid sick leave equal to the average number of hours they work in a 2 week period (so if an employee regularly works 25 hours per week, they would be entitled to up to 50 hours of paid sick leave).
Employees can use the emergency paid sick leave for any one of the following:
- If the employee is subject to a quarantine or isolation order by a government official or healthcare provider.
- If the employee is seeking medical guidance for symptoms associated with COVID-19 (currently fever, coughing, shortness of breath).
- To care for someone who qualifies for #1 or #2 above.
- In the event an employee’s child’s school or child care provider’s facility has closed due to COVID-19.
- An employee with a substantially similar condition. (We’re awaiting some clarification on this item from government agencies as it’s unclear what exactly this includes)
Employees using the paid sick leave for reason #1 or #2 are entitled to their full rate of pay up to $511 per day or $5,110 total for 2 weeks. Employees using the paid sick leave for #3-5 are entitled to 2/3 of their regular rate of pay up to a maximum of $200 per day or $2,000 total for 2 weeks.
Employer Payroll Tax Credit Reimbursement
Employers are eligible for payroll tax credits equal to 100% of the wages paid to employees for the new FMLA expansion or emergency paid sick leave. This credit will be applied to quarterly Social Security tax payment liability owed by an employer. Further details regarding the new tax credit reporting procedures will be available from the IRS.
Health care providers and emergency responders are exempt from this Act. The Act does not establish a definition for health care providers or emergency responders. Further clarification on both will likely be provided at a later date.
The Act does state that the Secretary of Labor has the authority to enact rules that employers with fewer than 50 employees may be exempt from providing the new required paid time off under either the FMLA expansion or the new emergency paid sick leave if providing the payment would result in the business being in jeopardy of remaining open. There are no additional details on this yet as the Act was passed so quickly but additional regulations and agency guidelines regarding this will hopefully be coming soon.
Mandatory Coverage of COVID-19 Testing Costs
The Families First Act requires that health care providers cover the cost of all testing for COVID-19 with no cost-sharing, such as co-pays, deductibles, or co-insurance, passed on to individuals enrolled in coverage. This portion of the Act starts the date of enactment (March 18, 2020) and continues until the Secretary of HHS determines that the public health emergency as expired.