Yesterday, March 18, 2020, President Donald Trump signed into law the Families First Coronavirus Response Act. The law provides free COVID-19 screening, paid leave, and enhanced unemployment insurance benefits for people affected by COVID-19. The law will potentially have a major impact on small to medium businesses, as it removes the 50-employee requirement for FMLA. The law has two provisions that we believe will impact small to medium business. First, it amends the FMLA to allow U.S. workers to take up to 12 weeks of leave if the employee is unable to work or telework due to a need to care for a child under 18 years of age because the child’s school or daycare has closed due to COVID-19. Unlike before, the leave will now be paid after the first 10 days. The bill will require employer to pay employee 2/3 of the employee’s regular rate, not to exceed $200.00 per day with a max out of pocket of $10,000.00. From the job-protected aspect of the emergency FMLA leave, there is a potential exception for businesses with fewer than 25 employees. To qualify for this exception, employers must meet a specific set of conditions. Specifically, the employer must show that the leave-taking employee’s position is eliminated due to “economic conditions” or other changes that affect the employer’s operations resulting from the public health emergency. The law also allows the Secretary of Labor to exempt employers with fewer than 50 employees from the emergency FMLA leave requirement, “when the imposition of such requirements would jeopardize the viability of the business as an going concern.” Second, the bill mandates that employers with fewer than 500 employees provide paid sick time to workers. This applies if the worker is sick with or has been quarantined due to COVID-19, is experiencing symptoms of the disease and seeking medical attention or is caring for a child who is sick as a result of COVID-19. Full-time employees are entitled to 80 hours of paid leave, up to $511.00 per day, while part-time employees are entitled to time equal to the number of hours they work on average over a two-week period. As with the expansion of FMLA above, the law contains language allowing the Secretary of Labor to exempt small businesses with fewer than 50 employees from the paid sick leave requirement. The bill stipulates that tax credits are available to employers providing the paid FMLA leave or sick leave. For many employers covered by the legislation, though, the more immediate concern is how they’ll be able to afford the payroll while they are not open. We are recommending that small and medium employers take immediate steps, including making sure that employees who are parents are properly identified. The law does allow certain smaller employers to receive an exemption from its provisions, but we recommend you contact us immediately to determine if this option is in your best interest.
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