Updated: Sep 11, 2020
“Families First Coronavirus Response Act”
By Chad V. Sorenson, SHRM-SCP, SPHR
President, Adaptive HR Solutions
President-Elect, HR Florida State Council
Sunday, March 15, 2020
PLEASE NOTE THAT THIS IS NOW OLD NEWS!
UPDATED BLOG COMING OUT SHORTLY....
Commentary on HR 6201 is being provided as of Sunday, March 15, 2020. Note that this bill has yet to go before the US Senate. Information contained is very fluid, may change at any time, and should not be considered as legal advice. This summary is based on information I found in the Congressional Record for Friday, March 13, 2020, and comes from a document time-stamped 11:45pm on 3/13/20. The text can be found here: https://docs.house.gov/billsthisw…/…/BILLS-116hr6201-SUS.pdf
There are three important aspects to this bill that small business owners should be aware of. The good news is the amended bill is not as invasive as the bill I commented on previously, but still has important aspects that will impact businesses. While not perfect (nothing would be), it not only provides assistance to employees impacted by COVID-19 but provides some relief to employers.
After my comments, you can find a bulleted list of the provisions of the bill directly relating to employers. I encourage your comments and if you disagree with my findings, please let me know.
All employers will be impacted by this, including those with 1 employee.
There is no provision for permanent leave as described in the original bill. For employers impacted items, these rules sunset on 12/31/20.
Emergency Paid Sick Leave is provided for all employees regardless of their length of service and is available for up to 80 hours. This is available upon the approval and implementation of this bill.
The amount of paid leave is variable depending on the type of leave available – either at 100% of the regular rate or 67%. Employers will have to know exactly why an employee is not present.
The Emergency Paid Sick Leave is IN ADDITION to any leave policies already in place.
Expanded FMLA – this is new as it adds a paid component for Public Health Emergencies. The first 14 days do not need to be paid, but the remainder of the leave does need to be paid at 2/3 of the employee’s regular rate.
The bill does not explain how both types of paid leave interact with each other. This will have to be clarified.
Employers will receive a credit against a portion of FICA payments to pay for the paid leave. Depending on the size of the employer and the wages of the employees, these credits may or may not be covered by all the credited tax payments. Small employers may still be on the hook for some of the additional expenses and certain employers may be responsible for fronting the money that needs to be paid out.
Overall, the changes have benefited both employers who need to enact these rules and the employees who are directly impacted by the changes. However, small business owners need to pay very close attention to implementing the rules. Nothing about this is cut and dry and will take a little time to figure out. Be sure you know exactly what you will need to do and when you need to do it. Also – plan now for some of the additional expenses that will have to be fronted and know that some or most, but maybe not all the paid leave expenses will be credited against tax payments. Finally – for employers with fewer than 50 employees, FMLA is new to you. Getting up to speed ASAP is critical.
With all that said – the Senate still needs to review and pass the bill, and if they make any changes, well – everything I just said could be out the window. C’est la vie! Stay safe and stay healthy out there!
Here is my detailed assessment of the House-approved bill in bullet form.
PAID FAMILY MEDICAL LEAVE
Public Health Emergency Leave is added – and will sunset on 12/31/20.
A portion of this leave will be paid (no other FMLA leave is required to be paid).
Employees must only have worked at the company for at least 30 days to be eligible (the 12 months tenure with a 1250-hour requirement still stands for other FMLA leave types).
For this leave type – the “50 or more employee” requirement is removed and now it says the Employer Threshold is “fewer than 500 employees.” This means all employers with less than 500 employees. The status of employers with more than 500 employees is not necessarily addressed in this bill.
There are 3 main types of qualifications to receive this leave. 1) The employee can’t work due to a public official order, their own exposure, self-isolation, or their own symptoms. 2) Caring for a family member (the definition of which has been expanded) for the same reasons listed for 1). 3) To care for a son or daughter under 18 if the school or place of care has been closed (including childcare).
Excluded can be health care providers and emergency responders. Additionally, businesses with fewer than 50 employees may be excluded if the requirements would jeopardize the viability of the business as a going concern. (These exclusions must be issued by the Sec of Labor.)
The first 14 days may consist of unpaid leave. Unlike the rest of FMLA, the employee can decide to use accrued vacation, personal or other paid leave during these first 14 days, however, an employer may not require the use of paid leave.
The employer must then provide paid leave for each day after the first 14 days of unpaid leave for the duration of the leave (up to 12 weeks).
This amount is not less than 2/3 of the employee’s regular rate of pay.
Employers with fewer than 25 employees may be relieved of the requirement of restoration of the employee’s position if certain conditions are met.
EMERGENCY PAID SICK LEAVE
Same requirements as the Paid Family Medical Leave qualifications relating to the employee, the family of the employee and school closings.
Amount of sick leave – 80 hours for full-time employees and a prorated amount for part-time employees.
No carryover allowed as this will also end on 12/31/20.
No payout upon termination of the unused Emergency Paid Sick Leave.
This leave is in addition to any employer-provided leave already in place.
The employee must not be forced to find their own replacement to cover their shifts.
Available to all employees immediately regardless of their length of service with the company.
Employees can first use this additional Emergency Paid Sick Leave before using existing sick/medical/PTO leave.
Employers will have to post a notice about this leave once the Model Notice is published by the Department of Labor.
This leave covers employers with fewer than 500 employees. The status of employers with more than 500 employees is not necessarily addressed in this bill.
An expanded definition of family member is also used for this leave.
Sick pay is 100% of the regular rate for absences relating to employee and 2/3 of the regular rate for care of family member or because of school closings.
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 and $200/employee/day when out for absence relating to care of family member or because of school closing.
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 to wait for a refund 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.