In response to the growing impact of COVID-19’s effects on individuals and the economy, Congress has passed, and President Trump has signed into law, the Families First Coronavirus Act (H.R. 6201). The Act is aimed at providing diagnostic services and paid leave to individuals who may be directly impacted or have an immediate family member impacted by COVID-19 or COVID-19-related closures. Its provisions will go into effect within 15 days and expire on December 31, 2020.

We know that you may have questions and we’re here to help you navigate how this rapidly-changing situation might affect your business:

Am I required to provide sick leave?

If you employ fewer than 500 employees, you will be required to provide paid leave to employees who cannot work or telework due to the employee:

• Being subject to a coronavirus quarantine or isolation order by any federal, state, or local government authority;
• Being advised by a health-care provider to self-quarantine due to coronavirus concerns;
• Experiencing symptoms of coronavirus and seeking a medical diagnosis;
• Caring for someone who is either quarantined by a government authority or a health-care provider; or
• Experiencing another substantially similar condition as specified by the Department of Health and Human Services in consultation with the Treasury and Labor departments.

How much sick leave am I required to provide?

• Full-time employees are to receive 80 hours.
• Part time employees are to receive the leave equivalent to the average hours worked in a two-week period.
• This paid leave will not carry over from year to year.

Is there a tenure requirement to provide sick leave?

• No. Leave is available for immediate use regardless of an employee’s length of service to a company.

Must an employee exhaust their existing leave prior to using the leave governed by the Act?

• No. You may not require an employee to use other available leave prior to using sick leave.

How much pay am I required to provide?

• Employees who are taking leave due to their own illness or quarantine should be paid their normal wage or the applicable federal, state, or local wage, whichever is higher.
• Employees taking leave to care for others who have been diagnosed or quarantined should be paid two-thirds of their normal wage, or two-thirds of the applicable minimum wage, whichever is higher.

Is there a cap on the amount I am required to pay?

• Payment is capped at $511/day and $5110.00 aggregate for leave taken for the employee’s own illness or quarantine.
• Payment is capped at $200.00/day and $2000.00 aggregate for leave taken to care for another.

Am I required to pay payroll tax on this leave?

• No. Payment under this Act is exempt from the 6.2% social security payroll tax.

May I require employees to find replacements if they take leave?

• No. You are prohibited from requiring workers to find replacements to cover their hours.

Does the Act cover other leave aside from sick leave?

If you employ fewer than 500 employees, you will be required to provide up to 12 weeks of FMLA leave for employees who:

• Have been employed for at least 30 days [and or or?]
• Are unable to work or telework due to the need to care for a minor child whose school or place of care has been closed, or whose typical care provider is unavailable due to a coronavirus emergency.

Must I pay an employee who takes FMLA care leave due to a coronavirus emergency?

• The first 10 days of leave may be unpaid, or the employee could opt to use other available paid leave.
• For any leave longer than 10 days, an employee should receive two-thirds their normal pay rate.
• Pay for this leave is capped at $200.00 per day and $10,000.00 aggregate.

Must I allow an employee to return to their previous position?

• Yes, unless you have fewer than 25 employees and the position previously held by the employee no longer exists due to fallout from the coronavirus pandemic.

Will I be reimbursed for payment made under the Act?

• Yes. Each quarter, you will be entitled to a fully refundable tax credit equal to 100% of any qualified sick leave wages you pay to employees under the Act.
• Credits for the employer portion of the OASDI component of payroll taxes will be provided to employers to cover wages paid to employees for time off under the Act’s sick leave and family leave programs.
• These tax credits will be limited to 10 days per employee who takes leave per quarter.
• Employers must include the amount of credits received in their gross income.
• Wages taken into account will reduce your Code Section 45S paid family and medical leave credit.
• You are not required to take the credit for a given quarter.

Are there any exemptions to the Act?

• Businesses with fewer than 50 employees may consult with the Department of Labor for an exemption of offering paid leave to care for a minor child when the imposition of this leave would jeopardize the viability of the business as a going concern.

Are there any other requirements I must follow?

• You are required to inform your workers and post a notice concerning the emergency sick leave provisions. The Department of Labor is currently creating a model notice that you will be able to use.

In the following days, it is likely that more guidance regarding these provisions will be given. Additionally, Congress and the President anticipate at least one more COVID-19-related response bill to be passed in the next week or so. Please continue to reach out to us with questions and concerns, and we will continue to keep you informed as more information becomes available.

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Taylor and Associates is a full-service transportation law firm assisting clients to meet their federal and state compliance requirements. If you have questions about this or other issues, contact us.

Author: Elle Slattery