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HR Update: Families First: Frequently Asked Questions

By March 23, 2020 No Comments

Federal and State Assistance for Small Businesses

The Small Business Administration (SBA) has approved several states, including Florida, for disaster assistance. SBA anticipates that all 50 states will be approved for disaster assistance by the end of the week. Small businesses in Florida can learn more about the SBA loan process and access applications here. Small businesses in other states can view their state’s SBA disaster status and learn more about their options by going here. Employers can apply through December 18, 2020. 

The federal government continues to consider a variety of options to assist businesses impacted by the pandemic. One option under consideration is business interruption loans for employers with less than 500 employees. A proposed component of this option is loan forgiveness for employers who keep employees on their payrolls. Another option under consideration is prompt refund of claims for employers complying with the new Families First Coronavirus Response Act. See our FAQs below for more information on this new law. 

As we mentioned yesterday, in Florida, Governor DeSantis has activated the  Florida Small Business Bridge Loan Program. This program offers interest-free loans to small businesses experiencing economic injury due to the pandemic. Eligible employers can apply for the loans now through May 8, 2020 using the application found here. Families First Coronavirus Response Act Yesterday President Trump signed into law the Families First Coronavirus Response Act. This law requires employers to pay sick leave and FMLA leave to certain qualifying employees. 

Frequently Asked Questions

  • When does the Families First Coronavirus Response Act take effect?
    • The Act takes effect on April 2, 2020
  • What does it cover in relation to employment laws?
    • The employment provisions cover expansion of the current FMLA laws; provides Paid Sick Leave to certain employees; provides tax credits for monies paid under the Act; and provides for COVID-19 testing under an employee’s health plan.
  •  Are these changes outlined in the Act permanent?
    • No. The provisions are all temporary measures that end at sunset, on December 31, 2020.
  •  What is the Emergency Paid Sick Leave Act provision?
    • This provision only applies to employers with fewer than 500 employees, and provides temporary paid sick leave to an employee under the following qualifying reasons in the event they are unable to work or telework because they:
      1. are subject to a Federal, State or local quarantine or isolation; or
      2. have been advise by a healthcare worker to self-quarantine; or
      3. are experiencing symptoms and seeking medical diagnosis; or
      4. are caring for a family member who is under quarantine; or
      5. are caring for a child if their school or childcare provider is closed; or
      6. are experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
  •  When does the employee qualify for the Paid Sick Leave under this Act?
    • Employees qualify immediately no matter how long they have has worked for an employer. Also, the employee is not required to use any other accrued paid time off, i.e. sick, vacation, PTO, prior to taking the paid sick leave under this Act.
  • How much paid sick time does my employee qualify for?
    • Full time employees qualify for 80 hours, while part-time employees qualify for the number of hours equal to an average of a two-week period they have worked.
    • The amount shall be paid at their regular rate, not to exceed $511 per day if the employee’s qualifying reasons falls under 1, 2 or 3 above; the amount is capped at $5,110.
    • If the qualifying reason falls under 4, 5 or 6 above, then the rate would be up to two-thirds (2/3) of their regular rate of pay, not to exceed $200 per day; the amount is capped at $2,000.
  •  What else is important to know about the Paid Sick Leave provision?
    • Paid sick leave does not carry over from one year to the next.
    • An employee does not have to find coverage for their shifts.
    • It ceases beginning the next scheduled work shift after the need for sick time.
    • It’s temporary and will expire at the end of the year.
    • Employers are required to post a Notice about this provision, a model should be issued by the DOL by March 25, 2020.
  • How does this Act change the Family Medical Leave Act (FMLA)?
    • FMLA has been temporarily expanded to include eligible employees who are unable to work or telework due to a need to care for a minor child because that child’s school or childcare facility has been impacted due to COVID-19.
  •  Who is an eligible employee under FMLA?
    • The eligible employee is one who has been employed for at least 30 days, by the employer, as of April 2, 2020. The 30 days only applies to eligible employees who care for a child, and not to any person applying for FMLA for any other reasons not related to childcare issues.
  • Does the new FMLA provision cover all employers?
    • No. Only employers who have fewer than 500 employees are covered by this new and temporary change. Also, small businesses with fewer than 50 employees are exempt to the extent the imposition of such requirements would jeopardize the business. Small businesses must apply for the exemption with the Secretary of Labor.
  • Do I have to pay the employee while they are on FMLA?
    • The initial ten (10) days for which an eligible employee takes FMLA may be unpaid, but the employee may substitute leave in whatever form they have accrued, i.e.., sick, vacation, PTO, Emergency Paid Sick Leave. After the 10-day period, the employee must be paid for each subsequent day they remain on leave.
    • Eligible employees are paid at two-thirds (2/3) that employee’s regular rate for the number of hours the employee would have worked during their normal schedule. Those payments shall not exceed $200 per day or $10,000 for the entire FMLA time period.
    • For eligible employees who work a varying schedule, and an employer can’t determine with certainty the number of hours the employee would have worked, are entitled to be paid based on an average number of hours the employee worked for the six months prior to taking FMLA. Eligible employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work. 
  • Do I have to restore the employee to their position once FMLA ends?
    • Employers with 25 or more employees will have the same obligation under traditional FMLA, which states an employee must be returned to the same or equivalent position.
    • Employers with fewer than 25 employees may be excluded from this requirement if the employee’s position no longer exists due to economic conditions or other changes in conditions that affect employment as a result of the public health emergency. In these cases, the employer must make reasonable efforts to restore that employee to employment for up to a year following the employee’s leave.
  • What are the Tax Credits for Paid Sick and Paid Family and Medical Leave provision?
    • There are a couple of tax credits for payments made by the employer, to the employee, under the Act.
    • The paid sick time payroll tax credit can be claimed on a quarterly basis, equal to 100% of the amount of sick leave wages paid. The credit is limited to $511 per day ($5,110 total) or $200 per day ($2,000 total) depending on the qualifying reasons outlined in the Paid Sick Leave provision above. The credit is refundable if it exceeds the amount the employer owes in payroll tax.
    • For employers who paid leave under the emergency FMLA provision, there is a separate payroll tax provision that allows a 100% credit against the employer’s share of the payroll tax for each employee, limited to $200 per day, or a total of $10,000 per employee. The credit is refundable if it exceeds the amount the employer owes in payroll tax.
    • Employers must increase their gross income for the taxable year by the amount of payroll credit received. Also, any wages considered in determining the payroll credit can’t be used in determining the amount of credit under section 45S of the Internal Revenue Code, which means no double-dipping.
  • What is the Emergency Unemployment Insurance Stabilization and Access Act Of 2020 provision?
    • This provision provides $1 billion dollars in emergency administration grants to the states to assist with unemployment insurance benefits processing and payments provided the State meets certain conditions.
    • Half the money would be divvied between the States, while the other half would be used for emergency grants for those states which experience a spike in unemployment compensation claims.
    • Under the Act, qualifying states will also get 100% federal funding for extended unemployment benefits, up to an additional 26 weeks after the initial 26 weeks. Previously, the State had to fund 50%.
  • Do my employees have to pay for COVID-19 testing?
    • If they are covered by a private health insurer, either group or individual, they do not. Those insurers must provide coverage to the employee and their dependents, for COVID-19 testing and related care. The insurers are not allowed to require prior authorizations or impose cost-sharing such as deductibles, copayment or co-insurance.

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