On March 18, 2020, THE FEDERAL FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA) was signed into law. The Act becomes effective on April 2, 2020. Here are some key provisions that affect employers:
Tax Credits for Emergency Paid Sick Leave and Paid Family Leave
Payroll tax credits are provided to employers to later recoup payments made for emergency paid sick leave and paid family leave. The tax credits are allowed against the employer portion of Social Security taxes, with certain caps and limits.
Additional funding is provided to states for processing and paying unemployment insurance benefits.
Emergency Paid Sick Leave
Public and private employers with fewer than 500 employees must provide up to 80 hours of emergency paid sick leave to full-time employees and the average number of hours the employee works over a two-week period to part-time employees. This paid leave benefit is available for immediate use, regardless of how long the employee has been employed by the employer.
- The employee is subject to a federal, state, or local quarantine or isolation.
- The employee has been advised by a health care provider to self-quarantine.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to a quarantine order or advised to self-quarantine.
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Exclusions: If an employee is a health care provider or an emergency responder, the employer may elect to exclude such employee from emergency paid sick leave.
Pay Caps: The employer can cap pay, and the amount of the cap depends upon the reason for the leave. When leave is used for the reasons identified above in subsections 1, 2, or 3, the employer may cap pay at $511 per day and $5,110 in the aggregate. When leave is used for the reasons identified above in subsections 4, 5, or 6, the employer may cap pay at $200 per day and $2,000 in the aggregate.
Emergency Paid Sick Leave that is used for care of family members, can be paid at 2/3 of the employee’s regular rate – see Division E, Sec. 5110 (5)(B)(ii) – SPECIAL RULE FOR CARE OF FAMILY MEMBERS.
Interaction with Other Leave Provided by Employer: The employer cannot require that other available paid leave be exhausted before this emergency paid sick leave benefit may be used.
Application When an Employee is Furloughed or Placed on Unpaid Leave Because of Business Slowdown or Closure: If a business puts its employees on leave because of a decision to temporarily close or slowdown operations, the leave provided would not be for a qualifying reason and no paid sick time would be owed.
A model notice will be provided by the Secretary of Labor. No employer may retaliate, discharge, or discipline an employee who takes leave under this Act. These are effective 15 days after enactment of the bill and expire on December 31, 2020.
Expanded Paid Family Leave
From March 18, 2020 until December 31, 2020, public employees and employees of private employers with fewer than 500 employees, who have been on the job for at least 30 days have the right to take up to 12 weeks of job-protected leave for a “Public Health Emergency.”
- “Public Health Emergency” means the employee is unable to work due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable due to an emergency with respect to COVID-19 declared by a Federal, State, or local authority.
- Exclusions: If an employee is a health care provider or an emergency responder, the employer may elect to exclude such employee from the leave.
- This act applies to private employers with fewer than 50 employees:
Job Restoration: An employee who takes leave under the Act must be restored to their position; however, there are special circumstances for employers with fewer than 25 employees.
Paid and Unpaid Leave; Pay Caps: The first 10 days of leave from work for a Public Health Emergency can be unpaid. If the employee has available paid leave, the employee may elect to substitute available paid leave. After the first 10 days, subsequent leave for a Public Health Emergency (until the 12 weeks of leave is exhausted) is to be paid at a rate of no less than two-thirds of the employee’s regular rate of pay and must be paid for the hours the employee would otherwise be normally scheduled to work—up to a cap of $200 per day and no greater than $10,000 in the aggregate. Benefits would continue for the entire leave period.
Application When an Employee is Furloughed or Placed on Unpaid Leave Because of Business Slowdown or Closure: If a business puts its employees on leave because of a decision to temporarily close or slowdown operations - no family leave would be owed.
Increased Funding for Food Assistance Programs
Additional funding is provided for food assistance programs, and the work and work training requirements for SNAP benefits are suspended during the crisis.
Small Business Administration Disaster Relief Loan
Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration. This Act has been put in place to provide disaster assistance to small businesses suffering loss of revenue due to the COVID-19 crisis.
- Once a governor declares a disaster, in coordination with the SBA, and the SBA will make the information on the application process for economic relief available to local small businesses; small businesses within the state’s territory can then apply via the federal SBA website for relief. Sba.gov
- This relief constitutes loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus (COVID-19).
- The loans offer up to $2 million in assistance at low interest rates and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- The loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
- SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. Sba.gov
Contact Goosmann Law Firm to help your business through the impact that COVID-19 and this Act have on your business.
**In case of emergency, you can reach any of our team members listed below on our Rapid Response Team:
RAPID RESPONSE TEAM
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