Expanded Federal Paid Sick Leave and Paid Family Leave Obligations For Employees Affected by COVID-19 Explained

On March 18, the federal government passed the Families First Coronavirus Response Act (FFCRA). The FFCRA consists of several different parts, including the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLA). The FFCRA is designed to help employees by providing paid sick and family leave for reasons related to COVID-19, that will be dollar-for-dollar reimbursed by the federal government through a refundable tax credit to employers.

The following guidance is based on the text of the FFCRA, as well as guidance issued by the federal Department of Labor (DOL) and U.S. Treasury Department. The federal government has been issuing updated guidance on the FFCRA with each passing day. The information below is based on current guidance up through the date of this writing. References to the FFCRA and the Act below refer to the EFMLA and EPSLA together and do not refer to other provisions of the FFCRA.

When does the FFCRA take effect?

The FFCRA takes effect on April 1, 2020 and applies to leave that is taken starting on the same day. However, to enable employers to come into compliance with the new law, the DOL will observe a temporary period of non-enforcement of the FFCRA up through April 17, 2020, if the employer has acted “reasonably” and in “good faith” to comply with the law.

Does the Act impose permanent paid sick leave and paid family leave obligations on employers?

No. The EPSLA and EFMLA are temporary measures that will sunset on December 31, 2020.

Which employers are covered and therefore must provide paid sick leave or expanded family and medical leave?

The FFCRA applies to employers with fewer than 500 employees.

Is there an exemption for small businesses?

Yes, but only as to certain aspects of the employer’s paid leave obligations. Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed or where child care is unavailable, if compliance would threaten the viability of the business.

There is no exemption from the Act’s other paid leave requirements.

Do not assume that you will automatically qualify for an exemption just because you have fewer than 50 employees. The DOL will issue regulations regarding the criteria to qualify for this exemption.

Are there any categories of employees the FFCRA does not apply to?

Yes. Employers of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the FFCRA’s paid leave requirements.

What are the paid leave obligations imposed by the FFCRA?

Generally, the Act provides that employees of covered employers are eligible for:

• Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work or telework because the employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, and/or has been advised to self-quarantine by a health care provider, and/or is 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 where the employee is unable to work or telework because the employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, and/or is caring for an individual who has been advised to self-quarantine by a health care provider, and/or is caring for a child (under 18 years of age) whose school is closed or child care provider is 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; and
• Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work or telework because the employee is caring for a child (under 18 years of age) whose school is closed or child care provider is unavailable due to a public health emergency with respect to COVID-19 declared by a Federal, State, or local authority.

What does it mean to be “unable to work,” including telework, for COVID-19 related reasons?

An employee is unable to work if you have work for the employee and one of the COVID-19 qualifying reasons set forth in the FFCRA prevents him or her from being able to perform that work, either under normal circumstances at your normal worksite or by means of telework.

What if the employer has closed its worksite or laid off employees prior to April 1, 2020?

If prior to the FFCRA’s effective date, you have closed your worksite or laid off any employees, the affected employees are not eligible for paid sick leave or expanded family and medical leave. This is true whether you close your worksite for lack of business or because you are required to close pursuant to a Federal, State, or local directive.

What if the employer closes its worksite or lays off employees after April 1, 2020?

If you close your worksite or lay off any employees after the FFCRA’s effective date, the affected employees will not get paid sick leave or expanded family and medical leave as of the date of the closure or layoff. This is true whether you close your worksite for lack of business or because you are required to close pursuant to a Federal, State or local directive.

What if the employer closes the worksite on or after April 1, 2020, but tells employees that it will reopen at some time in the future?

If you close your worksite, even for a short period of time, employees are not entitled to take paid sick leave or expanded family and medical leave. This is true whether you close your worksite for lack of business or because it was required to close pursuant to a Federal, State, or local directive.

What if the employer remains open, but furloughs (temporarily lays off) employees on or after April 1, 2020?

If you furlough any employees because you do not have enough work or business, the affected employees are not entitled to take paid sick leave or expanded family and medical leave.

If the employer reduces an employee’s scheduled work hours, does the employee get to take paid sick leave or expanded family and medical leave for the hours that he or she is no longer scheduled to work?

No. If you reduce an employee’s work hours because you do not have enough work for them to perform, the employee may not use paid sick leave or expanded family and medical leave for the hours that they are no longer scheduled to work. This is because the employee is not prevented from working those hours due to a COVID-19 qualifying reason, even if the reduction in hours was somehow related to COVID-19.

The employee may, however, take paid sick leave or expanded family and medical leave if a COVID-19 qualifying reason prevents them from working the full reduced schedule. If they do, the amount of leave to which they are entitled is computed based on their work schedule before it was reduced. 

Do full-time and part-time employees get the same amount of paid leave?

No. A part-time employee is entitled to leave for his or her average number of work hours in a two-week period, based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours. Such a part-time employee may take paid sick leave for this number of hours per day for up to a two-week period, and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that.

Are there caps on the amounts employers must pay to employees taking qualifying leave?

Yes. An employee must pay the employee at his or her regular rate of pay or two-thirds the regular rate of pay depending on the reason, only up to certain caps.

An employee who is taking paid sick leave because he or she is subject to a Federal, State or local quarantine or isolation order, or has been advised to self-quarantine by a health care provider, or is experiencing symptoms of COVID-19 and seeking a medical diagnosis, is entitled to a maximum of $511 per day or $5,110 total over the entire paid sick leave period.

An employee who is taking paid sick leave because he or she is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order, or is caring for an individual who has been advised to self-quarantine by a health care provider, or is caring for a child  whose school is closed or child care provider is unavailable, or because 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, is entitled to a maximum of $200 per day, or $2,000 over the entire two week period.

An employee who is taking expanded family and medical leave may take paid sick leave for the first ten days of that leave period, or may substitute any accrued vacation leave, personal leave, or sick leave available under your personnel policies. For the following ten weeks, the employee is entitled to a maximum of $200 per day or $12,000 for the twelve weeks that include both paid sick leave and expanded family and medical leave.

If you pay your employees in excess of these caps, you cannot claim, and will not receive tax credit for those amounts in excess of the caps.

Are employers required continue an employee’s health coverage while they are taking paid sick leave or expanded family and medical leave?

Yes. If you provide group health coverage, the employee is entitled to continued group health coverage during their paid sick leave or expanded family and medical leave on the same terms as if they continued to work. The employee generally must continue to make any normal contributions to the cost of health coverage.

How will employers get reimbursed by the federal government for making the required payments?

Employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form. The IRS expects to process these requests in two weeks or less. The Treasury Department will be releasing additional guidance on obtaining reimbursement.

Is there any documentation that the employer must keep with regard to paid leave under the Act?

Yes. If one of your employees takes paid sick leave under the EPSLA, you must require your employee to provide you with appropriate documentation in support of the reason for the leave, including:

• the employee’s name;
• the qualifying reason for requesting leave;
• a statement that the employee is unable to work, including telework, for that reason;
• the date(s) for which leave is requested; and
• if applicable, a copy of the Federal, State or local quarantine or isolation order related to COVID-19 applicable to the employee, or written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19.

If one of your employees takes expanded family and medical leave to care for his or her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19, you must require the employee to provide you with appropriate documentation in support of such leave, such as a notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider.

The IRS may require you to retain additional documentation to support your request for a tax credit.

Are employers required to advise employees of their rights under the FCCRA?

Yes. You must post the following poster in a conspicuous place at your workplace. You may also satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

Where can I obtain additional information?

The DOL has created a website with links to various information pages on the FFCRA here: https://www.dol.gov/agencies/whd/pandemic

If you have questions about any of this, or have any other needs related to COVID-19 — such as questions about layoffs, furloughs, whether your business is permitted to remain open under California’s statewide “stay at home” order, etc., you can contact Kevin Rivera via email at kevin@riveraemploymentlaw.com or by phone at 323-546-4160.