On March 18, 2020, the Senate passed, and the President signed into law, the House’s recently amended Families First Coronavirus Response Act (“FFCRA”) in response to the COVID-10 pandemic. The Chapman Firm has been closely following this legislation and has published a series of articles (here, here, and here) to assist its clients in preparing and implementing these new policies.
The FFCRA contains at least two specific sections that businesses must be aware of: The Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. Below are some frequently asked questions to assist businesses in analyzing and implementing the the expanded FMLA regulations. Also check out our FAQ on the Paid Sick Leave Act.
What businesses must comply with the Expanded FMLA?
All public Employers as well as private employers with fewer than 500 employees must comply. Note, however, that small businesses with fewer than 50 employees (those who are normally not covered by the FMLA) while free to implement these new policies cannot be held liable for failing to provide the expanded FMLA pursuant to the Act.
Are there any exceptions to who is covered?
Yes, the Expanded FMLA does not apply to health care providers and emergency responders. And small businesses with fewer than 50 employees are also exempt when imposition of the requirements would jeopardize the viability of the business as a going concern.
I keep hearing the Expanded FMLA covers a “qualifying need related to public health.” What’s that?
This Expanded FMLA adds a new qualifying event for employees generally covered by FMLA – If an employee is unable to work due to the need for leave to care for his/her son/daughter under 18 years of age if school or place of care has been closed, or the child care provider is unavailable, due to a public health emergency.
What is a “public health emergency”?
In this case, an emergency with respect to COVID-19 declared by Federal, State, or local authority. Since the federal government has declared this pandemic a “public health emergency,” the Expanded FMLA is now applicable.
Who is an “eligible employee” under this new Expanded FMLA?
Unlike the existing rules for FMLA that require an employee have worked for 12 months and at least 1,250 hours during the preceding 12 months to qualify, if an employee is seeking leave under the Expanded FMLA, the employee need only have worked for the business for 30 calendar days.
This new definition of “eligible employee” also does away with the 75-mile radius provision for the purposes of calculating employee size, which makes any business with between 50 to 499 employees at any location required to provide this leave.
How does the Expanded FMLA affect leave for eligible employees?
Eligible employees can receive up their full 12 weeks of FMLA leave, but it is now partially paid (unlike regular FMLA leave). The Expanded FMLA leave is broken down as follows:
Unpaid Leave: The first 10 days of Expanded FMLA leave are unpaid. (Eligible employees may be eligible to use paid leave under the Emergency Paid Sick Leave Act of the FFCRA – see our FAQ on that Act here.)
Paid Leave: After the first 10 unpaid days, the employer shall provide paid leave for each subsequent day of Expanded FMLA leave through the remainder of the employee’s leave (subject to the pay calculations described below).
Can an eligible employee take accrued vacation, personal, sick or medical leave instead?
Yes, an employee may elect to substitute accrued vacation leave, personal leave, or medical or sick leave for unpaid leave under the Expanded FMLA.
Is there special paperwork I need to use?
The Department of Labor has not yet issued guidance on any specific forms. For now, employers are encouraged to use the existing FMLA forms which can be found on the DOL website.
How much do I have to pay an employee out on Expanded FMLA leave?
Paid leave is calculated based on an amount that is not less than two-thirds (2/3) of an employee’s regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work. (Paid Leave = 2/3 regular rate of pay multiplied by the employee’s normal hours.)
But there’s a cap: in no event shall the paid leave exceed $200 per day and $10,000 in the aggregate.
How do I calculate paid leave if the employee is on a varying schedule?
If the eligible employee’s hours vary week to week, then you must use the following:
A number equal to the average number of hours that the employee was scheduled per day over the 6-month period (or from the date of hiring, if less than 6 months) ending on the date on which the employee took leave of any type.
But remember the cap: in no event shall the paid leave exceed $200 per day and $10,000 in the aggregate.
What if my employee is paid solely on commission or has another non-traditional payment structure?
The Expanded FMLA does not address non-traditional payment structures, such as commission-based wages, nor how to calculate the “regular rate of pay” if an employee does not have a set rate of pay. Until more formal administrative regulations clear up this answer, a safe approach for employers may be to calculate the average rate of pay for the preceding 6-month period to determine the “regular rate of pay” for that employee’s non-traditional compensation structure. Hopefully, the Department of Labor will issue some guidance on these types of uncertainties over the next few weeks.
Is there a cap on how much I have to pay my employee out on Expanded FMLA leave?
Yes, in no event shall the paid leave exceed $200 per day and $10,000 in the aggregate.
Do I have to keep the employee’s position open while on leave?
If the employee takes Expanded FMLA leave and the position held by that employee when leave commenced does not exist upon their return to work due to economic conditions or other changes in operating conditions caused by this public health emergency, then the employer must make reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent benefits, pay, and other terms and conditions of employment. (Note: This provision does not apply to employers with fewer than 25 employees.)
What if I can’t restore the employee to his/her position?
If after making reasonable efforts an employer still can’t restore an employee’s position, then the employer must make reasonable efforts to contact the employee if an equivalent position becomes available within a 1-year period. (That 1-year period begins on the earlier of the date on which the qualifying need related to a public health emergency concludes or 12 weeks after the date on which the employee’s leave under the Expanded FMLA commences.)
Is this Expanded FMLA leave in addition to existing FMLA?
No, this Expanded FMLA Act doesn’t ‘refresh the bank.’ It merely provides a new qualifying reason for taking FMLA leave and does not substantially modify general FMLA leave (save for making this Expanded FMLA leave partially paid). If an employee has already exhausted some or all of his/her FMLA leave prior to requesting this Expanded FMLA leave, the employee does not get an additional 12 weeks of leave and may only receive their remaining FMLA allowance.
When does this Expanded FMLA take effect?
April 1, 2020.
Does this Expanded FMLA Act expire?
This Expanded FMLA leave is only valid through December 31, 2020. It will require an additional act of Congress to extend this leave beyond that date. This expiration date also means that an employee who requests this leave toward the end of the year may not be eligible to receive the full 12 weeks of leave.
I hear my business can get reimbursed for the expense of providing this Expanded FMLA leave. How does that work?
Employers may claim a 100% refundable payroll tax credit on wages associated with Expanded FMLA leave as well as expenditures associated with additional health benefit contributions. Any additional wages paid due to these leave requirements are not subject to the employer portion of the payroll tax. Non-profit organizations are able to apply the tax credit to payroll taxes.
The amount of qualified FMLA wages with respect to any individual shall not exceed $200 per day and $10,000 in the aggregate with respect to all calendar quarters. For any calendar quarter, the Tax Credit allowed shall not exceed the Social Security tax imposed for that same calendar quarter.
The IRS is in the process of implementing guidance for businesses on these reimbursement protocols.
For additional questions about preparing your workplace for implementation of these new rules, contact The Chapman Firm.