As you may have seen by now, the President signed into law on March 18th, 2020 the Families First Coronavirus Response Act (the “Act”). This law, H.R. 6201 https://www.congress.gov/bill/116th-congress/house-bill/6201/text, contains a number of provisions aimed at providing quick relief to Americans impacted by COVID-19/Coronavirus (“COVID-19”).
The provisions of the Act are required to take effect no later than April 2, 2020.
Employers will want to coordinate closely with their health insurance and other health plan administration teams and advisors as well as payroll service providers to help ensure that all requirements are implemented and administered properly and communicate with employees how these benefits may apply to them.
Of particular interest to small business employers (those with fewer than 500 employees) and their employees are the provisions covering:
- COVID-19 medical testing benefits
- Temporary emergency leave for certain workers
- Tax credits intended to reimburse employers for these costs
The Act requires that all employer-sponsored health plans must cover at no cost to employees certain costs and services related to testing of this virus at health care facilities and via tele-health visits. No copays, deductibles or coinsurance charges can be charged for these diagnostic products or services in order to incent people to get tested quickly if they suspect they may have the virus.
Temporary Emergency Leave Provisions under the Act
The Act contains two main subcategories for temporary emergency leave, discussed below. These provisions apply through December 31, 2020 to private-sector employers with fewer than 500 employees. Exemptions may apply for certain health-care providers and emergency responders, as well as certain businesses with fewer than 50 employees where the Act requirements would jeopardize the viability of the business. Further guidance is expected from the Federal Department of Labor (“DOL”) on these exemptions.
Employers are required to post notice of the Act’s requirements in conspicuous places where notices to employees are customarily posted. The DOL is expected to publish a model notice by March 25th that can be used.
Leave payments provided under this Act are exempt from employer Social Security taxes but are otherwise treated as taxable wages to employees.
Emergency Family and Medical Leave Expansion Act (“FMLA”) Provisions
The FMLA is expanded temporarily under the law to apply to employers with fewer than 500 employees. These provisions apply for workers who have been employed for at least 30 days and are not able to work onsite or remotely on their jobs due to the need to care for a child under the age of 18 due to the child’s school or care provider being closed in response to COVID-19 government emergency declarations.
The first 10 days of leave can either be unpaid, applied based on the employee’s regular unused sick leave or paid time-off under existing employer policies, or paid subject to the EPSLA provisions as discussed below, as applicable.
Any leave after this period for up to 10 more weeks must be paid at two-thirds the employee’s regular pay rate up to a maximum of $200 per day and $10,000 in total per employee.
Emergency Paid Sick Leave Act (“EPSLA”) Provisions
The EPSLA require paid sick leave for employees who are unable to work onsite or remotely, and the employee meets any of these conditions:
- Is subject to a government quarantine or isolation order related to COVID-19.
- Has been advised by a healthcare provider to self-quarantine due to COVID-19 concerns.
- Is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
- Is caring for an individual subject to a government quarantine or isolation order or has been advised by a healthcare provider to self-quarantine due to COVID-19.
- Is caring for a child whose school or care provider is closed or unavailable due to COVID-19 concerns or precautions.
- Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services (HHS).
Full-time employees are eligible for up to 80 hours of paid sick leave under EPSLA, while part-time employees are eligible for the average number of days they work over a two-week period. For employees with variable work schedules, the average weekly hours for the six-month period preceding the date the employee first takes sick leave is used to determine the hours subject to pay under this EPSLA provision. For employees with less than six-months of work history, a reasonable estimate of average work week hours is required.
Paid sick leave under this provision is to be paid at the employee’s regular pay rate but is capped at $511 per day up to a maximum of $5110 total per employee in categories 1-3 above and up to $200 per day up to a maximum of $2000 total per employee for categories 4-6 above.
Employers may not force employees to use other sick-leave or paid-time-off benefits before these EPSLA-required sick leave payments are made.
These EPSLA provisions apply no matter how long the employee has worked for the employer.
Tax Credits for Employers
To compensate employers for the above costs, employers will be allowed a refundable tax credit against employer Social Security tax of 100% of the amounts paid to employees. The credit can be increased by certain health expenses, including employer-paid health insurance premiums that are excluded from employee taxable wages. The allowable credit is also increased by Medicare taxes paid on sick leave wages under the Act.
If you have questions on how these FFCRA rules may apply to you, please don’t hesitate to contact one of CoNexus’s team of professionals. As many of us are currently working remotely, email may be the best way to contact us for quickest response, but you’re welcome to call our main number 770-980-1080, and we’re happy to schedule a phone call to discuss your situation as well.
The CoNexus team continues to monitor COVID-19/Coronavirus related legislation that may impact our clients and contacts. We will provide additional updates on key matters as they arise over the coming days.
We sincerely wish you all the best of health and wellbeing as we navigate this situation together.