In March, President Trump signed the Families First Coronavirus Response Act (FFCRA) into law. The Act provides paid sick time and protected paid family leave for eligible employees, but how does it affect employers? Karen Stafford, Arizona President of Employers Council, explains the fine print that businesses need to know about FFCRA below.
Which businesses need to comply with FFCRA?
The act applies to private employers with fewer than 500 employees and public sector employers of one or more employees. The law went into effect in April and will be valid through December 31.
What are the different reasons that an employee can receive paid sick time?
An employee will qualify for the pay if they are unable to work or telework for any one of these six reasons:
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 an order as described in subparagraph (1) or has been advised, as described in paragraph (2).
5. The employee is caring for a son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable due to COVID-19 precautions.
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Do all employees qualify?
The paid sick leave applies to all employees, regardless of how long the employee has been employed.
How much time off do employees receive?
Full-time employees are entitled to 80 hours of paid sick time whereas part-time employees are entitled to a pro-rated amount of hours equal to their average hours worked over a two-week period. The Department of Labor has provided guidance that employers should use the average over a six month period to calculate the amount of hours for an employee whose workweek varies. An employer may not require an employee to use other paid leave before the employee uses the paid sick time available.
When an employee is out because of their own illness (reasons one, two and three above), the maximum paid sick time for each employee is $511 per day or $5,110 in total. An increase in the pay rate depends on:
• the employee’s regular rate of pay,
• the Federal minimum wage, or
• the applicable State minimum wage for leave taken due to employee illness.
When an employee is out to care for someone else (reasons four, five, and six above), the maximum pay is $200 per day or $2,000 in total. The pay-rate for this leave is 2/3 of the employee’s regular rate of pay.
Does this also affect the Family Medical Leave Act (FMLA)?
Yes, this act also expands FMLA to provide 12 weeks of leave to any employee who is unable to work due to a need for leave to care for the son or daughter under 18 years or for an adult son or daughter who is incapable of self-care due to a mental or physical impairment. The leave applies if the child’s school or place of care has been closed or the child care provider of such son or daughter is unavailable due to a public health emergency. Employees must have been employed for at least 30 days to be eligible for expanded FMLA.
It is important to note that these 12 weeks are not in addition to traditional FMLA. Any employee who has used some or all of their FMLA leave during an employer’s designated year is only eligible for the remaining balance.
Can the weeks be split up or merged with other benefits?
Employees may elect to take paid sick leave for the first two weeks of that leave period or may substitute any accrued vacation leave, personal leave, or medical or sick leave available under the employer’s policy. For the following ten weeks, the pay rate must be no less than two-thirds of the regular rate of pay.
Are any employers or employees exempt?
Yes. For both paid sick time and paid FMLA leave, the act does allow an exemption for certain health care providers and emergency responders to allow the employer of such workers to opt-out of participation. Small businesses with fewer than 50 employees can also opt-out when the imposition of such requirements would jeopardize the viability of the business as a going concern may also be choose to exempt their organization. Documentation is required, and the regulations provide guidance.
Do employers still have to comply with the Arizona’s Fair Wages and Healthy Families Act?
Yes. The paid sick leave entitlement under Arizona state law is in addition to any leave given under the FFCRA.
Is there mandated health insurance coverage for employees?
Yes. Group health plans and insurers offering insurance must cover FDA-approved COVID-19 tests without cost-sharing, pre-authorization, or other medical management requirements. The coverage must include related services furnished during urgent care, emergency room, in-person, or telehealth provider visits that result in an order for, or administration of, a covered diagnostic test.
Will employers receive any aid for the cost of FFCRA?
Yes. The legislation provides payroll tax credits for employers that make required sick or family and medical leave payments. The credit is increased for expenses the employer pays or incurs to provide and maintain a group health plan.
What are the most important takeaways that employers need to know?
While the sick leave and FMLA leave provisions are listed separately, it’s essential to understand how they intersect, and how they don’t.
Paid sick time applies to all employees regardless of how long they’ve been employed. Employees who will be taking FMLA leave under the expanded FMLA leave provisions in this bill may also use the paid sick time to cover the first unpaid 10 days of the FMLA. For employees not eligible for FMLA, paid sick time can be used for time away.
There are required posters and additional guidance regarding the FFCRA. The posters, a questions and answers page, and other useful information can be found at https://www.dol.gov/agencies/whd/pandemic.
Employers Council is also making its COVID-19 related resources available to the business community. These resources can be found here: https://www.employerscouncil.org/corona-resources
Karen Stafford is the Arizona president of the Employer’s Council.