Financial Support for Small and Medium Businesses - The Main Street Lending Program
{ Banner Stripe }
News & Alerts

COVID-19 Legislation

March 2020


On March 18, 2020, the President signed H.R. 6201, the Families First Coronavirus Response Act (“FFCRA”), into law, which seeks to provide some financial relief to working Americans.  Among other things, the FFCRA provides mandatory paid sick leave for employees affected by the Coronavirus Pandemic, makes temporary changes to the Family and Medical Leave Act (“FMLA”) for certain employees affected by the Pandemic, and provides tax credits to certain employers for wages paid under those programs.  The key provisions are outlined below.

Emergency Family and Medical Leave Expansion Act

Private employers with less than 500 workers, and public agencies of all sizes, must provide family and medical leave under the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) to certain employees affected by COVID-19.  Those employers must provide up to 12 weeks of leave for full-time and part-time employees who have been on the job for at least 30 days, and who are unable to work or telework because they have to care for a minor child if the child’s school or place of care has been closed, or if the child care provider of that child is unavailable due to Coronavirus.  Employers are permitted to exclude employees who are health care providers or emergency responders from this entitlement.

The first 10 days (two weeks) of the 12 week leave under this provision are unpaid; however, an employee can substitute accrued paid leave, including emergency paid sick leave (described below) for those days.  The EFMLEA is unclear on whether an employer can require the employee to use accrued paid leave during the 10 day period, although the FMLA has traditionally permitted employers to impose such a requirement.  The remaining 10 weeks of leave must be paid at two-thirds of an employee's regular rate for the number of hours the employee would otherwise be scheduled to work, capped at $200 per day and $10,000 in total.  For employees whose schedule varies from week to week so that the number of hours the employee would have worked is uncertain, the amount is calculated by averaging the number of hours the employee was scheduled per day over the six-month period prior to the date the employee takes leave under this provision.  If the employee has not been working for the employer that long, the amounted is calculated using the average number of hours per day the employee reasonable expected to be scheduled to work.

Generally, an employee taking leave under this provision must be restored to the same or equivalent position upon return to work.  However, this requirement does not apply to employers with fewer than 25 employees if the position held by the employee no longer exists following leave due to economic conditions or other changes in the employer’s operating conditions caused by the Coronavirus, and the employer makes reasonable efforts to contact a displaced employee for up to one year after he/she is displaced if an equivalent position becomes available.

While the EFMLEA governs employers with fewer than 50 employees (unlike the FMLA), the Department of Labor has the authority to exempt such employers if the EFMLEA leave requirements would jeopardize the business’ ability to continue operating.

The EFMLEA provisions take effect on April 2, 2020, and expire on December 31, 2020.

Emergency Paid Sick Leave Act

Private employers with less than 500 workers, and government employers, must provide paid sick leave to employees affected by the Coronavirus under the Emergency Paid Sick Leave Act (“EPSLA”).  An employee qualifies for emergency paid sick leave if:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. The employee is caring for an individual who is subject to federal, state, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  5. The employee is caring for employee’s child if the child's school or place of care has been closed or the child care provider is unavailable due to COVID-19 precautions; 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.”

The rate of pay that an employee may receive for sick leave under the EPSLA is contingent upon the reason why the leave is needed.  If sick leave is needed because of any of the first three reasons set forth above, then such employees must be paid at least their regular rate or the applicable federal, state, or local minimum wage, whichever is greater, capped at $511 per day and $5,110 total.  If however, sick leave is needed for any of the remaining reasons set forth above, the employee must be paid at two-thirds of employee's regular rate, capped at $200 per day and $2,000 total.

Full-time employees are entitled to 80 hours of paid sick leave under EPSLA.  Part-time employees are entitled to paid sick leave equal to the average number of hours that employee works, on average, over a two-week period.  Sick time is available to employees regardless of how long they have worked for an employer and employers cannot require employees to find a replacement or use other forms of paid leave before using paid sick leave under the EPSLA. 

The Department of Labor has the authority to exempt small businesses from pay sick leave to an employee who is caring for his or her child whose school or place of care has closed, or whose childcare provider is unavailable, because of COVID-19 precautions if the imposition of paid sick leave would jeopardize the employer’s ability to continue operating.

The EPSLA takes effect on April 2, 2020, and expires on December 31, 2020.

Tax Credits for Paid Sick and Paid Family and Medical Leave

Employers will receive a refundable tax credit against the employer share of Social Security taxes equal to 100% of qualified paid sick leave wages paid for each calendar quarter under the FFCRA’s sick leave and family leave programs.  If the credits exceed the employer’s payment of the employer portion of Social Security taxes for all employees for any calendar quarter, the excess credit is refundable to the employer.

The sick leave credit for each employee will be for wages, including qualified health plan expenses relating to those wages, up to $511 per day while the employee is receiving paid sick leave to care for themselves, or $200 per day if caring for another individualor for a child whose school has closed.  This credit is limited to 10 days per employee per calendar quarter.  The family leave credit for each employee will be for wages, including qualified health plan expenses relating to those wages, up to $200 per employee per day, and $10,000 in the aggregate for all calendar quarters.

No deduction is allowed for the amount of the credit and no credit is allowed with respect to paid family leave wages for which a credit is otherwise allowed under the Internal Revenue Code.

The tax credit provisions take effect on a date selected by the Treasury Secretary, no later than April 2, 2020, and expire on December 31, 2020.

For more information on the COVID-19 Legislation, please click here.

UPDATE (March 25, 2020)

The U.S. Department of Labor has issued its FFCRA Model Notice, provided within the link below, which covered employers must post in a conspicuous area of their workplace: 

 https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

Because many employers’ physical workplaces are not currently accessible by employees, it is recommended that the FFCRA’s Model Notice be posted to an intranet, e-mailed to employees and/or disseminated by some other manner that is reasonably likely to reach employees in the meantime.

If you have any questions related to implementing these new laws at your workplace, please contact Naureen Amjad, a Partner and the Leader of Pedersen & Houpt’s Employment Law Practice Group, at 312.261.2273 or at namjad@pedersenhoupt.com.