Employment Impact of the Federal Families First Coronavirus Response Act (Summary)

The Families First Coronavirus Response Act was signed into law Wednesday, March 18, 2020, and becomes effective April 1, 2020.  The new law is a game changer for small businesses (less than 50 employees) that have never been subject to the Family Medical Leave Act (“FMLA”) previously because of their size, and even larger employers that have not had to address these specific issues.  The new law creates time off and paid leave obligations for employers with fewer than 500 employees in response to COVID-19.  It does so by expanding application of FMLA concepts to smaller employers.  Employers are barred from changing leave policies in anticipation of the law, and required to notify their employees of the law.  Some highlights include:

• Making up to 12 weeks of leave available for an employee to care for an individual subject to a quarantine or isolation order or to care for a son or daughter under the age of 18 when that child’s school or daycare is closed due to the coronavirus.
• Specifying that the first 10 days of that leave is unpaid, but for the remainder of the leave time, the employee must be paid 2/3rds of that employee’s regular salary, up to a maximum of $200/day and $10,000 in total, with any remainder of the 12 weeks unpaid.
• Allowing Emergency Paid Sick Leave when an employee cannot work or telework due to a quarantine, medical diagnosis, or even symptoms of the virus (if also seeking medical diagnosis).  Unlike the leave allowed for child care or to care for another individual subject to quarantine or isolation, the first 10 days of Emergency Sick Leave (up to 80 hours) are paid at full salary for full-time employees, subject to a limit of $511/day and $5,110 total (less for part time employees).
• Prohibiting mandatory use of other available employee paid leave time to be used in conjunction with qualifying leave, and prohibiting termination or discipline of an employee who seeks to use this leave.
• Allowing a refundable tax credit of 100% for qualified sick wages paid by the employer for each calendar quarter.
•  Allowing an available credit for employers for the employer portion of Social Security taxes (6.2%) and hospital insurance (1.45%) paid.

Please note, this is a very simplified summary of the main features of the new law that was itself quickly enacted.  This summary is not intended to be, and should not be relied upon as, legal advice.   Specific questions about how the new law will affect your business, how you should be prepared to respond, what type of documentation you may request from employees seeking leave, how to compute wages to be paid for full or part-time employees, and other specific leave-related questions should be addressed to an attorney practicing employment law and familiar with the new law.  At Nicola, Gudbranson & Cooper, LLC, James H. Grove is available to answer any specific questions you may have and can be reached at (216) 377-1547 or [email protected].