Statutory Update – The Families First Coronavirus Response Act Becomes Law

March 20, 2020

On March 18, 2020, the President signed H.R.6201 into law.  Now known as the Families First Coronavirus Response Act (FFCRA), this law is the second to be passed in an effort to provide relief to businesses and workers impacted by the coronavirus (COVID-19) pandemic (the first was H.R.6074, or the Coronavirus Preparedness and Response Act, passed on March 6). While the law is quite broad in scope, this update focuses on the provisions for paid leave.

  Emergency Paid Sick Leave FMLA Expansion
Effective Date 15 days after enactment (April 2, 2020); sunsets December 31, 2020
Impacted Employers

Private employers with fewer than 500 employees*, and public agencies of any size

Special provisions for multi-employer bargaining agreements

Employee Eligibility
  • All employees
  • Note: The Department of Labor may issue regulations allowing employers to exempt certain health care providers and emergency responders.
  • Employed at least 30 calendar days*
  • Exception: Employers may exclude health care providers and emergency responders
Reasons for Use The employee is unable to work (or telework) because:

  1. Employee is subject to a federal, state or local COVID-19 quarantine or isolation order
  2. Employee has been advised by a medical provider to self-quarantine due to COVID-19 concerns
  3. Employee is experiencing symptoms of COVID-19 and seeking medical diagnosis
  4. Employee is caring for an individual who falls under numbers 1 or 2 above
  5. Employee is caring for a son or daughter whose school has been closed, or whose care provider is unavailable, due to COVID-19 concerns
  6. Employee is experiencing other substantially similar condition specified by the Secretary of Health and Human Services
Need related to an emergency with respect to COVID-19 declared by federal, state or local authority: the employee is unable to work (or telework) due to a need for leave to care for his or her child under the age of 18 in the event of school closure or unavailability of childcare
Entitlement
  • Full Time Employees: 80 hours
  • Part-Time Employees: Number of hours that employee works on average over a 2-week period (calculation provided for variable work schedules)
  • Leave is available immediately, regardless of the employee’s length of service
  • Paid Sick Leave is in addition to the employer’s existing policies
  • Employer may not require an employee to use other paid leave provided by the employer before the employee uses Emergency Paid Sick Leave
  • Entitlement ends with the employee’s first scheduled work shift immediately following the termination of the need for leave
  • Paid Sick Leave does not carry over to the following year and is not paid out upon termination of employment

12 weeks

Part of overall FMLA entitlement for eligible employees

Pay
  • Reasons 1, 2 & 3 above: greatest of the employee’s regular rate of pay, federal minimum wage, state minimum wage, or local minimum wage
    • Maximum: $511 per day, up to $5,110 total
  • Reasons 4, 5 & 6 above: 2/3 the employee’s regular rate of pay
    • Maximum: $200 per day, up to $2,000 total
  • Day 1-10 (weeks 1-2): Unpaid; employee can substitute accrued paid leave or Emergency Paid Sick Leave
  • Days 11+ (week 3+): 2/3 the employee’s regular rate of pay for the number of hours the employee would otherwise have been expected to work
  • Maximum: $200 per day, up to $10,000 total
Notice to Employee Employers will be required to post a notice (model to be provided by the Secretary of Labor within the next week) Notice at time of need for leave in accordance with FMLA requirements
Notice to Employer Employer may require “reasonable notice procedures” As soon as practicable
Job Protection Not specified in the law text
  • Employer must restore employee to same or equivalent position upon return to work.
  • Exception: employers with fewer than 25 employees will not be held to this if the employee’s position no longer exists due to business changes resulting from the public health emergency. In this event, the employer is obligated to notify the employee if equivalent employment becomes available within 1 year.
Employer Assistance Tax credit equal to 100% of qualified Paid Sick Leave wages paid by the employer per calendar quarter.  The credit is taken against the employer portion of Social Security taxes (IRC 3111(a) and 3221(a)).

Self-employed individuals may also be eligible.

Tax credit equal to 100% of qualified family leave wages paid by the employer per calendar quarter.  The credit is taken against the employer portion of Social Security taxes (IRC 3111(a) and 3221(a)).

Self-employed individuals may also be eligible.

* Differs from current FMLA definitions of Employee (Sec. 101(2)(A) and (B)(ii)) and Employer (Sec. 101(4)(A)(i)), but only for leave provided under FFCRA

The law does not specify how the 500 employee threshold is calculated, though it is reasonable to believe the Department of Labor would borrow the integrated employer test used from the FLSA and/or FMLA (see September 11, 2000 DOL opinion letter for reference). Also, for both Emergency Paid Sick Leave and FMLA Expansion FFCRA states that “The Secretary of Labor shall have the authority to issue regulations for good cause … to exempt small businesses with fewer than 50 employees … when the imposition of such requirements would jeopardize the viability of the business as a going concern”.

What About Larger Employers?

FFCRA does not impose paid leave requirements on employers with 500 or more employees.  The Senate is currently reviewing proposals for a third “phase” of legislation and, while main focus seems to be on economic “stimulus and relief”, it does appear as though what is ultimately passed will have some component related to paid leave.

In our March 6 release we outlined practical and compliance items to consider in designing a policy to address employee needs that may not be met by existing company benefits during a public health emergency.  Since then we have been working with our customers and vendor partners to help shape best practice recommendations.  Below are a few positions resulting from those discussions:

Short Term Disability (STD)

At this time, it is not recommended that employers adjust their disability programs, either in the way of altering benefits, removing waiting/elimination periods or providing benefits for conditions that may not normally meet the plan’s definition of disability.  In fact, many insurance carriers will not permit such changes on insured policies. Employers with self-funded plans considering alterations of this sort are strongly advised to consult with counsel.

Family and Medical Leave Act of 1993 (FMLA)

We have been in contact with legal resources and the predominant opinion on FMLA is, as the law stands now and FFCRA requirements aside, FMLA does not come into play unless and until an employee and/or a covered family member experiences symptoms. Per the Department of Labor, “leave taken by an employee for the purpose of avoiding exposure to the flu would not be protected under the FMLA”. It is recommended that the FMLA process be initiated after three consecutive days of missed work with reported symptoms.  Employers may wish to consider being flexible with requirements around deadlines and what may be accepted for medical certification.

Americans with Disabilities Act (ADA/ADAAA)

Currently COVID-19 on its own isn’t being considered a disability under ADA, so direct accommodations will likely not apply.  However, employers are encouraged to consider accommodations requested by individuals with medical conditions that could be further compromised by COVID-19.  Guidance on how the ADA may apply during a pandemic situation can be found on the U.S. Equal Employment Opportunity Commission (EEOC)’s Pandemic Preparedness in the Workplace and the Americans With Disabilities Act, which was updated on March 19.

Additional Protections for Employees
State Laws

In our March 13 release we discussed how some of the states with mandated disability and/or family leave programs have been responding to workers’ needs around COVID-19.  Below is a reiteration of some of those changes, plus a few developments on these and other legislation since then.

Statutory Disability and Family Leave Laws

      • California: The governor’s March 12 Executive Order waived the one-week waiting period for State Disability Insurance (SDI)
      • New York: Quarantined employees covered by SB8090, passed on March 16, could be fast-tracked for Disability Benefits (DBL) and Paid Family Leave (PFL) benefits while under official quarantine.  Details are under new paid sick leave legislation below.
      • Rhode Island: The recently posted Workplace Fact Sheet includes “emergency regulations” affecting state programs as part of the State of Emergency declared on March 9.  The regulations waive the seven-day waiting period for Temporary Disability Insurance (TDI) and Temporary Caregiver Insurance (TCI) benefits; they also waive medical certification requirements for individuals under COVID-19 quarantine.
      • New Jersey and Washington have released user-friendly scenario infographics to help explain which state benefits apply when. (While there is no PFML law in place, Oregon has released a similar piece)

Paid Sick Leave Laws

Existing Laws

        • Currently, 19 Paid Sick Leave Laws include specific language allowing use of accrued time for public health emergency and/or school closure.  Similar laws in Maine (eff. 1/1/21), Nevada (eff. 1/1/20) and Bernalillo County, NM (eff. 7/1/20) allow leave to be taken for any reason.
States Localities
Arizona
Michigan
New Jersey
Oregon
Rhode Island
Vermont
Washington
San Diego, CA
Chicago, IL
Cook County, IL
Montgomery County, MD
Minneapolis, MN
St. Paul, MN
New York City, NY
Westchester County, NY
Pittsburgh, PA*
Seattle, WA
SeaTac, WA
Tacoma, WA

* Pittsburgh’s Paid Sick Days Act just became effective on March 15, however employers may allow use in advance of accrual if they choose.

Some of those that do not specifically call out public emergency as a qualifying reason for use have issued guidance that accrued time may be used for this purpose.  These include California, Emeryville, CA, and Santa Monica, CA (which follows the state’s guidance for use).

New Legislation:

        • San Francisco, CA: On March 16 the mayor of San Francisco announced the Workers and Families First program, which allocates $10 million of public funding to help businesses provide an additional five days of sick leave pay to workers above and beyond their existing policies. All San Francisco businesses will be eligible, with up to 20% of funds reserved for employers with 50 or fewer employees. The City will contribute up to one week (40 hours) at $15.59 per hour (current minimum wage) per employee, or $623 per employee. The employer will pay the difference between the minimum wage and an employee’s full hourly wage.
        • Colorado: On March 11 the Colorado Department of Labor published Colorado Health Emergency Leave with Pay Rules (“Colorado HELP”).  The rules require employers in certain industries to provide paid sick leave to employees with flu-like symptoms while awaiting COVID-19 testing. Industries covered include leisure and hospitality, food services, child care, education (including transportation, food service, and related work), home health care, nursing homes, and community living facilities.  The maximum amount of entitlement is four calendar days, during which the individual is only paid for the days he or she would have worked. Leave ends upon receipt of a negative test before the four-day period ends. Employers who already provide paid leave that meets the rules’ requirements do not need to provide additional leave.  The rules are set to expire in 30 days, but there is the possibility this timeframe could be extended.
        • New York: On March 16 the governor announced an agreement with the legislature on SB8090 which, effective immediately, provides job protection and pay for employees during an official mandatory or precautionary order of quarantine or isolation due to COVID-19.  Note that the provisions outlined do not apply if an employee is asymptomatic and is able to work remotely.
              • Employers with 10 or fewer employees nationally and a net income less than $1 million will provide job protection for the duration of the quarantine order. Employees will immediately qualify for Paid Family Leave and temporary disability benefits*. These benefits may provide wage replacement up to a maximum combined total of $2,884.62 per week.
              • Employers with 11-99 employees nationally and employers with 10 or fewer employees nationally and a net income greater than $1 million will provide at least five days of paid sick leave, and job protection for the duration of the quarantine order. Employees will then immediately qualify for Paid Family Leave and temporary disability benefits*. These benefits may provide wage replacement up to a maximum combined total of $2,884.62 per week.
              • Employers with 100 or more employees nationally, as well as all public employers, will provide at least 14 days of paid sick leave and guarantee job protection for the duration of the quarantine order.

* For the purposes of this act, “disability” means an employee is unable to perform his or her work duties from home and has exhausted all paid sick leave provided by their employer under this act.

Sick time provided is in addition to any sick time the employee may have accrued.

Working parents whose minor dependent child is subject to a mandatory or precautionary order of quarantine may also qualify for Paid Family Leave.

More information can be found on the Paid Family Leave and Emergency COVID-10 Paid Sick Leave websites.

The bill also includes an accrued paid sick leave component, which is set to become effective 180 days after passing (around September 12, 2020):

              • Employers with four or fewer employees and a net income less than $1 million will provide at least five days of unpaid sick leave each year.
              • Employers with 5-99 employees and employers with four or fewer employees and a net income greater than $1 million will provide at least five days of paid sick leave each year.
              • Employers with 100 or more employees will provide at least seven days of paid sick leave each year.
        • Philadelphia, PA: On March 16 the Office of Labor announced that the City’s “Promoting Healthy Families and Workplaces Act” has been expanded so that covered workers can use accrued leave for COVID-19 related business closures, quarantine, and to stay home with their children during school closures.

Proposed Changes:

        • Los Angeles, CA: which has a Paid Sick Leave law in place, is considering an emergency program that would provide at least 14 days of paid sick leave during a public health crisis or major disaster.
        • Puerto Rico: HB2428 was proposed to amend the current sick leave law (Law 180-1998) by replacing the current provision of 20 days of unpaid emergency leave due to diagnosis of a pandemic illness with five days of paid emergency leave
        • Vermont:  Changes to the Earned Sick Time Law that would ensure that employees forced to take COVID-19 related leave are eligible for benefits, as well as provide businesses relief for some of the cost related to paid leave were submitted as amendments to H.681.  As of March 13 the bill has been passed by the House and on to the Senate.

State Family and Medical Leave Laws (Unpaid)

Many states currently have “FMLA-like” laws that provide protection that extends beyond FMLA in one respect or another. These laws typically do not specifically cover absences due to a public health emergency; however, states are beginning to make amendments:

      •  On March 17, the Washington D.C.’s mayor signed the “COVID-10 Emergency Amendment Act of 2020”, which amends the District of Columbia Family and Medical Leave Act (DC FMLA) to provide “Declaration of Emergency” leave for circumstances associated with a declared public health emergency, including quarantine or isolation advised by a public agency or a medical provider. The Act waives employer size and eligibility requirements for other DC FMLA leaves, and allows leave for the duration of the period in which the emergency declaration is in effect (versus the limitation of 16 weeks in a 24-month period for other leave types). As written, the Act will be in effect for 90 days, but may be extended if necessary.
      • On March 18 Oregon’s Secretary of State issued a Temporary Administrative Order that expands qualifying reasons for leave under the Oregon Family Leave Act (OFLA) to include care for an employee’s child whose school or place of care has been closed in conjunction with a statewide public health emergency declared by a public health official.
Unemployment Insurance Laws

Under certain circumstances such as reduction in hours, unavailability of work, site closure, or even inability to work due to a child’s school closure, employees may find assistance through state Unemployment Insurance (UI). In addition to the paid leave provisions outlined above, FFCRA includes direction of funds to support state unemployment programs.  Conditions of the emergency grants include a requirement that each state demonstrates steps to ease eligibility requirements and access to compensation for claimants, including waiving benefit waiting periods and work search requirements. The law also recommends leniency with the experience ratings of employers directly impacted by COVID-19 illnesses in the workplace or quarantine requirements imposed by health officials.

Many states have independently made changes to their UI requirements in response to COVID-19 and the extraordinary increase in claims:

    • States such as California, Connecticut, Minnesota, Rhode Island and New York are waiving the one-week waiting period, allowing claimants impacted by COVID-19 to be paid from day one if eligible.
    • Many states such as California, Connecticut and Rhode Island are waiving the usual requirement that the claimant be actively looking for work.
    • Washington D.C. made several amendments, including allowing employees to receive UI benefits if they voluntarily leave their jobs “for good cause” (as defined).
    • Delaware, New Jersey, Ohio and Washington will provide claimants with benefits if their employer temporarily closes or is shut down due to State of Emergency.
    •  Pennsylvania, Oregon and Vermont may pay claimants if they have temporarily reduced hours and expect to return to work.
    • Some states are communicating that claimants may be eligible for benefits if they must stay home with a family member who has been diagnosed with COVID-19. Colorado appears to be the most generous with their definition of “family member”, citing that a claimant may receive benefits to take care of a domestic partner, parent, child, brother or sister.
    • Many States such as North Carolina, New Hampshire and Ohio may pay the claimant if their healthcare provider orders them to “avoid contact” with others during this time.

Employers are advised to consult with their benefit program carriers to see if and how benefits continue in the event of furlough, temporary layoff and/or reduction in hours.

Trion will continue to research and monitor developments.

More information and resources may be found on MMA’s Coronavirus Outbreak Resource Page.

Please contact your Trion Account Team members for specific questions about these or other updates.

No part of this document may be reproduced, quoted, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or by any information storage and retrieval system), without express, prior permission, in writing from Marsh & McLennan Agency, LLC.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Trion Group, a Marsh & McLennan Agency, LLC Company shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change. Copyright © 2020 Trion Group, a Marsh & McLennan Agency, LLC Company. All rights reserved.

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