On March 18, 2020, the President signed into law the Families First Coronavirus Response Act (the “Family First Act”), which will go into effect on April 1, 2020. The Family First Act contains unprecedented provisions that will effect employers with 1-500 employees, including federally mandated paid sick leave for qualifying employees and an expansion of leave available under the Family and Medical Leave Act (”FMLA”). Note: even employers who have not been covered by FMLA in the past (i.e. employers with less than 50 employees) may be covered by the expanded provisions of the FMLA.
The Families First Act provides tax credits for employers who are required to provide the Paid Sick Leave and Expanded FMLA Leave described below.
As a practical matter, there are requirements for employers to provide notice to employees of the provisions of the Family First Act, and there are employer responsibilities to grant and correctly designate leave to employees. In a time when employers may be dealing with ongoing business, leave related to reduced available work, or the need to increase the workforce, it is crucial to understand these obligations and employer options.
In summary, private employers who have 1-500 employees and some public employers must provide the following:
Exemptions to the leave provisions set forth above may be available to employers of health care providers and emergency responders and to employers with fewer than 50 employees when such provisions would jeopardize the viability of the business as a going concern.
Employers should also be aware that the Families First Act requires health plans to provide coverage for COVID-19 testing and related services without cost for the period of national emergency.
Refundable payroll tax credits equal to 100 percent of the qualified paid sick leave wages and the qualified family leave wages are available. The tax credits are allowed against tax imposed by IRC §3111(a) (the employer portion of Social Security taxes).
In a time when businesses are addressing rapidly evolving federal, state and local mandates and recommendations relating COVID-19, it is important to understand and correctly apply the rights and responsibilities granted by the Families First Act. Employers with less than 50 employees who have concerns about the financial implications of the expanded FMLA leave should be focused on exemptions that may be granted. There are provisions of the Families First Act that may not be covered above, specific to each employer’s scenario. Attorneys at Wharton, Aldhizer & Weaver are available to assist employers with compliance and to answer any questions on these matters.