The Families First Coronavirus Response Act, H...

POLICY BRIEF

The Families First Coronavirus Response Act

Mandates small employers to provide emergency paid leave benefits for one year; Large employers encouraged to voluntarily provide benefits without a payroll tax credit

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (H.R. 6201) into law.  The Act requires employers with fewer than 500 employees to provide nearly all employees with emergency paid sick leave and emergency paid family leave benefits to use if they are impacted by the coronavirus.  The bill would apply to franchisees with less than 500 employees of member companies that have those relationships.  A payroll tax credit, up to certain dollar amounts, will help offset the cost of the mandated benefits for employers.  Both leave mandates sunset on December 31, 2020.

The Trump administration has encouraged large employers, and some members of Congress expect them, to provide the same benefits – however, they would not be eligible for the payroll tax credit.  The media is also reporting that some large employers are already expanding their paid time off programs.  House Speaker Nancy Pelosi has also introduced a bill that would extend the mandates to all employers, which could be part of any Phase IV legislation Congress considers in the future.  The U.S. Department of Labor is also posting implementation guidance for employers here.

H.R. 6201 Summary:  The Families First Coronavirus Response Act requires employers with fewer than 500 employees to:

• Immediately provide 80 hours of emergency paid sick leave to full-time employees.  Part-time employees are entitled paid sick leave based on the usual number of hours they work in a typical two-week period.
  
  
  1. The leave must be paid at the employee’s regular rate of pay if it is taken in response to a federal, state, local, or health care provider quarantine or isolation order, or if the employee is experiencing symptoms and is seeking a medical diagnosis for coronavirus.  The leave must be paid at two-thirds the employee’s regular rate if it is taken to care for an individual for the same reasons or to care for a son or daughter whose school has closed, or where the child care provider is unavailable due to the coronavirus.
     
     
  2. Amount of emergency paid sick leave taken for personal use is capped at $511 per day and $5,110 in total, while the amount of leave taken for caregiver use is capped at $200, per day and $2,000 in total.
     
     
  3. Employers cannot require an employee to use other paid leave before the employee uses their emergency paid sick leave.
     
     
  4. Emergency paid sick leave cannot be carried over from year to year.
     
     
• Provide 10 weeks of paid emergency family leave.  After a 10-day waiting period, covered employees would be eligible for 10 weeks of paid family leave only to care for a son or daughter under 18 years old whose school or place of care has been closed, or for whom the childcare provider is unavailable due to the coronavirus.
  
  
  1. Employees must be employed for 30 days to be eligible for the leave.
     
     
  2. Emergency paid FMLA leave must be paid at a rate of no less than two-thirds the employee’s regular rate of pay capped at $200 per day and $10,000 total.  All other FMLA leave is still unpaid.
     
     
  3. During the waiting period, employees may substitute any accrued vacation leave, personal leave, or medical or sick leave for the period of unpaid leave, but employers may not require the employee to do so.
     
     
  4. It is unclear if emergency FMLA leave can be taken intermittently.

Intermittent leave: If an employer and employee agree, the employee may take paid sick leave or paid family leave intermittently if the leave is to care for a child whose school or daycare is closed because of COVID-19.  However, employees who are taking paid sick leave because they are quarantined or caring for a quarantined individual cannot take paid sick leave intermittently.

Refundable payroll tax credits are available to small employers with less than 500 employees:

• For emergency paid sick leave, a maximum of $511 per day for each employee on leave.
  
  
• For emergency FMLA leave, a maximum of $200 per day for each employee on leave and $10,000 per quarter ($200 per day, times 5 days a week, times 10 weeks).
  
  
• Tax credits are refundable if they exceed the amount an employer owes for payroll taxes.  However, employers cannot receive the credit if they also receive a tax credit for paid family and medical leave established by the 2017 tax overhaul (Public Law 115-97).
  
  
• Tax credits are not available to large employers.

States are encouraged to expand unemployment insurance benefits to employees impacted by the coronavirus.  The Act provides $1 billion in fiscal 2020 to process and pay unemployment benefits to workers.  Under current law, UI benefits are available to employees when:

• An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
  
  
• An individual is quarantined with the expectation of returning to work after the quarantine
  is over;
  
  
• An individual leaves employment due to a risk of exposure or infection or to care for a family member; and
  
  
• An individual receiving paid sick leave or paid family leave is still receiving pay and is generally ineligible for unemployment insurance.