By Chad V. Sorenson, SHRM-SCP, SPHR
President, Adaptive HR Solutions
President Elect, HR Florida State Council
Wednesday, March 18, 2020
SENATE HAS APPROVED and the President has signed THE REVISED BILL
Significant differences from Bill approved on Friday night
Link to final bill: https://www.congress.gov/116/bills/hr6201/BILLS-116hr6201enr.pdf
The US Congress has now passed the Families First Coronavirus Response Act (R 6201) and was just signed by President Trump. The Secretary of Labor now has up to 15 days to put it into full effect.
There have been some significant changes since my last post over the weekend. Following is a summary of the bill in bullet form to help employer understand what they will be facing shortly. The bill is good for employees in providing financial assistance should their lives be directly impacted by COVID-19. Additionally, to help small and medium-sized employers, the bill has placed limits on the amount paid out to employees and provides tax credits for the sums paid to employees under this bill.
Note that my commentary only covers the items directly impacting small and medium-sized employers. It is also important to note that this bill applies only to employers with fewer than 500 employees. Information contained in this blog still has to be finalized by the Secretary of Labor and never should be taken as legal advice, but rather clarification assistance from a fellow HR practitioner.
PAID EMERGENCY FAMILY MEDICAL LEAVE
Public Health Emergency Leave has now been added - and will sunset on 12/31/20.
Employers covered - employers with fewer than 500 employees. (Does not apply to employers with 500 or more employees.)
Employee covered - must have been employed for at least 30 calendar days. (No 12 month or 1250 hour requirement)
Only one qualification for this leave - “employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.” There is now no qualification for illness or caring for someone with an illness.
Health care providers and emergency responders can be exempted from this type of leave.
The Secretary of Labor can also exempt small businesses with fewer than 50 employees from the requirements of providing this leave ”when the imposition of such requirements would jeopardize the viability of the business.” There may be further clarification of this process.
The first 10 days of this leave may consist of unpaid leave, and an employee may elect to substitute any accrued cation, personal, medical or sick leave for this unpaid period.
The remaining 10 weeks of the 12 weeks of FMLA leave shall be paid at a rate of not less than 2/3 of the employee’s regular rate of pay.
Added in is a clarification that “in no event shall such paid leave exceed $200 per day and $10,000 in the aggregate.”
Employers with fewer than 25 employees may be relieved of the requirement of restoration of the employee’s position if certain conditions are met.
For employers with fewer than 50 employees - FMLA is new to you. Now is the time to get up to speed.
EMERGENCY PAID SICK LEAVE
This regulation will also sunset on 12/31/20.
Employers covered - employers with fewer than 500 employees. (Does not apply to private employers with 500 or more employees. Public employers with more than 1 employee are covered - no upper limit.)
Employee covered - all employees, full-time and part-time, regardless of their length of service.
Amount of emergency paid leave - 80 hours for full-time employees; prorated amount for part-time employees equal to the number of hours worked on average over a 2-week period.
Qualifications for leave:
Employee is subject to a quarantine or isolation order related to COVID-19.
Employee has been advised by a health care provider to self-quarantine.
Employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
Employee is caring for an individual who is subject to numbers 1 or 2 above. (NOTE - this does not say family member.)
Employee is caring for a son or daughter of such employee if the school or place of care has been closed or unavailable due to COVID-19.
Employee is experiencing any other substantially similar condition specific by the Secretary of HHS.
Health care providers and emergency responders can be exempted from this type of leave.
The Secretary of Labor can also exempt small businesses with fewer than 50 employees from the requirements of providing this leave ”when the imposition of such requirements would jeopardize the viability of the business.” There may be further clarification of this process.
No payout upon termination of employment of the unused Emergency Paid Sick Leave.
This leave is in addition to any employer-provided leave already in place. While language specifically stating this has been removed, there is still a section (5102(e)(2)(B)) that states “an employer may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time under subsection (a).
Employers will have to post a notice about this leave once the Model Notice is published by the Department of Labor.
The amount of pay varies based on the qualification type. For numbers 1, 2 & 3 above, it will not exceed $511 per day and $5,110 in aggregate at the employees regular rate of pay. For numbers 4, 5 & 6 above, it will not exceed $200 per day and $2,000 in aggregate at 2/3 of the regular rate of pay.
Most of the same FLSA penalties apply if these rules are not followed.
TAX CREDITS FOR PAID FMLA AND EMERGENCY PAID SICK LEAVE
Through a credit against a portion of FICA (the OASDI or Soc. Sec 6.2%), employers will be able to consider a portion of the sick and FMLA payments made.
The amount of credit shall be $511/employee/day when Emergency Paid Sick Leave is paid for employee’s related absence (1, 2 or 3 above) and $200/employee/day when out for absence relating to care of an individual, because of school closing, or other reason specified by the Secretary of HHS (4, 5 or 6 above).
The amount of credit for FMLA paid leave is $200/day with a maximum of $10,000 – which is the equivalent of 10 weeks of paid FMLA.
If the amount paid to employees is greater than the amount due in the quarter for the OASDI, then the employer will have be refunded by the Treasury.
There are provisions for self-employed individuals to also utilize this credit.
No double benefit is allowed so employers receiving this credit will have to add this amount to the gross revenues for the year.