Special Edition - Covid-19 Updates

FAMILY FIRST CORONAVIRUS RESPONSE ACT

CERTAIN EMPLOYERS REQUIRED TO PROVIDE EMERGENCY PAID SICK LEAVE AND EMERGENCY FAMILY LEAVE RELATED TO THE CORONAVIRUS

On March 18, 2020, Congress passed and President Trump signed into law the Family First Coronavirus Response Act (“FFCRA”) providing emergency paid sick leave (“EPSL”) and emergency paid family and medical leave (EFML) leave to employees who may miss work due to COVID-19.

FFCRA applies to all private employers with less than 500 employees and some government employers.  The law becomes effective April 2, 2020 and remains in effect until December 31, 2020.  Employers with fewer than 50 employees may apply for an exemption with the Secretary of Labor if compliance with the Act jeopardizes the viability of the business. Healthcare providers and emergency responders may also be exempt. The Act does provide for a refundable tax credit to help offset the incremental cost to employers of providing these benefits. 

Following are answers to some of the many questions we are hearing from employers regarding both required emergency sick leave and emergency family and medical leave under FFCRA.

Emergency Paid Sick Leave Act (EPSLA)

The EPSLA requires certain employers to provide emergency sick leave to any employee with a qualifying need.  

Who must comply with the Act? 

The EPSLA requires private employers with fewer than 500 employees and some government employers to provide two weeks (80) hours of paid sick leave for eligible employees.  

What employees are eligible for emergency paid sick leave (EPSL)?

All employees (full-time and part-time) are eligible for EPSL, regardless of the duration of their employment.  

Under what circumstances are employees allowed to take EPSL?

An employee qualifies for emergency paid sick leave if he or she is unable to work or telework because:

  1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19; 
  2. The employee is advised by a health care provider to self-quarantine due to COVID-19 concerns; 
  3. The employee is experiencing COVID-19 symptoms and seeking medical diagnosis; 
  4. The employee is caring for an individual (no longer limited to just family members) subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns; 
  5. The employee is caring for his or her child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or 
  6. 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.

All of my employees are allowed to telework.  Am I still required to provide emergency sick leave? 

The employee must be unable to work or telework because of one of the 6 reasons outlined above. The Secretary of Labor will issue regulations providing additional guidance prior to the effective date of the Act.

How many hours of EPSL am I required to provide employees who are eligible for leave?

A full-time employee is eligible for 80 hours of EPSL, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two (2) week period.

If the part-time employee’s hours change from week to week, the employer must determine the average number of hours worked during the prior six (6) months and provide leave equal to the number of hours they typically work in a two-week period.

If EPSL leave is no longer needed by the employee, benefits cease on the next regularly scheduled payday.

How much am I required to pay employees who qualify for this leave?

Employers are required to provide up to two weeks of paid sick leave for full-time and part-time employees at the employee’s regular rate of pay who need time off for any of the coronavirus-related qualifying reasons 1, 2 or 3 listed above or two-thirds of the employee’s regular rate of pay to care for qualifying reasons 4, 5, or 6 listed above.

EPSL wages are limited to $511 per day up to $5,110 total per employee for their own use (reasons 1, 2 or 3 listed above) and up to $200 per day up to $2,000 total to care for others and any other substantially similar condition (reasons 4, 5 or 6 listed above).

Will the EPSL carry over to the following year? 

Emergency paid sick leave will not carry over to the following year and may be in addition to any paid sick leave currently provided by employers.

May I require my employees to use company provided accrued Paid Time Off (“PTO”) or vacation pay in lieu of benefits under the EPSLA? 

No. An employer may not require an employee to use other paid leave provided by the employer before the employee uses the EPSL. EPSL must be provided in addition to whatever paid leave is already provided under the employer’s policies, and the EPSLA does not alter an employer’s obligation to comply with applicable state or local leave laws.

What is the applicability of my existing sick leave policy? 

The EPSLA takes precedence over all existing policies and may be in addition to any paid sick leave currently provided by employers. The employer is not allowed to require employees to utilize existing policies in lieu of EPLSA benefits.

Can I require my employees to provide advance notice of leave?  

Where leave is foreseeable, an employee should provide as much prior notice of leave to the employer as is practicable. After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving emergency paid sick time.

Am I allowed to terminate an employee because they seek leave under the EPSLA? 

No. The EPSLA specifically contains provisions that prohibit employers from terminating an employee seeking EPSLA benefits.

Will I be repaid for providing these emergency sick leave benefits?

Yes. Employers will be eligible to receive repayment in the form of certain dollar-for-dollar tax credits. Please see the discussion below under Tax Credits for Businesses

Am I required to post any notices about the EPSLA?

Yes. A model poster will be released soon by the Secretary of Labor. Employers will be required to post this poster in a conspicuous place within 7 days of the effective date.

I own a small business. How will I be able to pay 2 weeks of EPSL, especially during these difficult economic times?

Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide emergency sick leave if the leave requirements would “jeopardize the viability of the business as a going concern.”

The U.S. Secretary of Labor also may exclude healthcare providers and emergency responders from the definition of employees who are allowed to take such leave.

What if I fail to comply with the EPSLA? 

Employers who fail to comply with the EPSLA will be deemed to have violated the minimum wage requirements of the Fair Labor Standards Act (FLSA) and will be subject to fines and penalties. For those employers that willfully violate the EPSLA, they will be subjected to liquidated damages.

What is the effective date and expiration date of the EPSLA? 

The EPSLA will become effective on April 2, 2020 and remain in effect until December 31, 2020.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

The EFMLEA amends and expands the Family Medical Leave Act (FMLA) on a temporary basis related to the COVID-19 public health emergency and provides eligible employees with emergency family leave.

Who must comply with the Act? 

The EFMLEA requires private employers with fewer than 500 employees and some government employers to cover twelve (12) weeks of public health emergency leave for a qualifying need related to the COVID-19 emergency. 

Which employees are eligible for EFMLEA benefits?

Any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave.  

Under what circumstances are employees eligible to take EFMLEA leave?

EFMLEA leave must be afforded to allow an eligible employee, who is unable to work or telework, to care for the employee’s son or daughter under 18 years of age if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency. This is the only qualifying need for leave under the EFMLEA.

All of my employees are allowed to telework.   Am I still required to provide EFMLEA benefits? 

The employee must be unable to work or telework due to the need to care for the employee’s son or daughter under the age of 18 if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.  The Secretary of Labor will issue regulations providing additional guidance prior to the effective date of the Act.

How many weeks of emergency leave can employees take?

Any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave. 

Is EFMLEA leave paid or unpaid?

The first 10 days of EFMLEA leave may be unpaid. After the first 10 day period, the employer is required to pay the eligible employee.  During the initial 10-day leave period, an employee may elect to substitute any accrued paid leave (like vacation or sick leave) to cover some or all of the 10-day unpaid period.

Employees may use emergency paid sick leave (EPSL), as described above, to provide for full or partial wage payment during the first two unpaid weeks of emergency family and medical leave.  After the 10-day period, the employer is required to pay the employees.   

How much am I required to pay employees who qualify for this leave?

After the initial 10-day period, the employer is required to pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled.

Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work.

The EFMLEA limits this pay entitlement to $200 per day and $10,000 in the aggregate per employee. 

I own a small business.  How will I be able to pay 12 weeks of EMLFEA leave especially during these difficult economic times?

Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would “jeopardize the viability of the business as a going concern.”

The U.S. Secretary of Labor also may exclude healthcare providers and emergency responders from the definition of employees who are allowed to take such leave.

At the end of the 12 weeks of EFMLEA leave, am I required to return the employee to the same position they had prior to taking leave?  What if the position is no longer available?

Employers with 25 or more employees will have the same obligation as under traditional FMLA to return an employee who has taken EFMLEA to the same or equivalent position upon the return to work.

However, employers with fewer than 25 employees are excluded from this requirement if the employer meets the following conditions:

            1.         The employee’s position no longer exists following the EFMLEA leave due to an economic downtown or other circumstances caused by a public health emergency during the period of Emergency FMLA;

            2.         The employer makes reasonable attempts to return the employee to an equivalent position; and

            3.         Requires an employer to make efforts to return the employee to work for up to one year following the employee’s leave.

Can I require my employees to provide advance notice of leave?

Where leave is foreseeable, an employee should provide as much notice of leave to the employer as is practicable.  

Are employers required to provide notice to employees and what type of notice is required?

Yes. A model poster will be released soon by the Secretary of Labor, and it will need to be posted in a conspicuous place within 7 days of the effective date of the regulations.

When does the EFMLEA become effective and for how long?

The Act becomes effective April 2, 2020 and remains in effect until December 31, 2020

 

Tax Relief for Businesses

Does the FFCRA provide employers with any tax credits for emergency sick and emergency family and medical leave?

Businesses will be able to take advantage of new tax credits to offset the costs associated with paid emergency family leave and sick leave benefits implemented under FFCRA bill, as well as providing credit for health plan expenses affiliated with emergency and sick leave wages.

The FFCRA allows for refundable tax credits in “an amount equal to 100% of the qualified sick leave” paid by the employer for each calendar quarter. The credit can be taken against the employer’s portion of Social Security taxes. There are, however, certain caps and limits you should keep in mind. Specifically, the credit emergency sick leave for sick leave is capped at $511 per day for qualifying events 1-3 above and at $200 per day for qualifying events 4-6 above. 

Employers are entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the EFMLEA. The qualified family leave wages are capped at $200 per day for each individual up to $10,000 total per calendar quarter. Only those employers who are required to offer EPSLA and EFMLEA may receive these credits. The tax credit is allowed against the tax imposed under the employer portion of Social Security and Railroad Retirement payroll taxes.

DO I HAVE TO CLOSE MY BUSINESS?

At Governor Hogan’s press conference this morning, he announced that he ordered all Non-Essential Critical Infrastructure Businesses be closed, effective at 5 p.m. today.  While his overall message was clear---if you don’t have to come to the office, please don’t---many business owners are trying to determine whether or not they must close their offices.

It should be noted that the Governor is not trying to stifle the economy or shut down businesses entirely. He appears to be urging businesses to embrace social distancing and to avoid the congregation of individuals in the workplace. To this end, businesses are encouraged to find ways to sustain their operations by having their personnel work from home.

Should it be unclear, however, as to whether or not your business is an Essential Critical Infrastructure Business, this Interpretive Guidance from the Office of Legal Counsel will hopefully provide some guidance. In that the information may still be somewhat confusing or ambiguous, or you may find that your business falls into both essentials and non-essential sectors, we encourage you to contact us to assist you in making this determination.

 

WHERE DO I GET CURRENT INFORMATION AND BUSINESS ASSISTANCE?

During these tumultuous times, we are all being inundated with information. Filtering through this data and understanding what is current and accurate, and what is helpful and constructive, can be somewhat challenging. Below are various links to information and resources which we hope will be useful to you and your business.

Health Resources

Johns Hopkins University and Medicine Coronavirus Resource Center

Maryland Department of Health

Howard County Department of Health

Centers for Disease Control and Prevention

Business Resources

Governor Hogan’s Executive Orders

U.S. Small Business Administration Disaster Assistance

Maryland Coronavirus (COVID-19) Information for Business

Maryland Department of Labor

Maryland Department of Commerce

Howard County Economic Development Authority

Anne Arundel County COVID-19 Resources

Baltimore County COVID-19 Updates and Guidance

Frederick County COVID-19 Resources

Carroll County COVID-19 Information HUB