On March 19, 2020, President Trump signed HR 6201, Families First Response to Coronavirus Act into law and will become effective no later than April 2, 2020. HR 6201 is an economic stimulus plan designed to minimize the impact of COVID-19. It includes employer sponsored paid sick leave for employees affected by COVID-19 and a drastic expansion of the existing paid family medical leave which now includes employer sponsored paid leave for employees needing time off to care for minor children. Employers who fail to comply with the Families First Coronavirus Response Act will be in violation of the Fair Labor Standards Act and subject to penalty.
Private employers with under 500 employees will be required to provide the following employer sponsored benefits to their employees (small businesses with less than 50 employees may be exempt when implementing these benefits jeopardize the viability of their business):
Emergency Sick Leave
- The equivalent of two weeks of paid time off for all employees who are unable to work for reasons related to COVID-19 including time off to care for children due to school and child care closures, those under quarantine, or those experiencing symptoms of the illness.
- Employers may pay employees at 2/3 their standard rate of pay or minimum wage, whichever is greater.
Emergency Family and Medical Leave Expansion Act
- 12 weeks of protected time off to employees who are unable to work or telework due to the need to care for minor children if their schools or place of care is closed. Certain exemptions apply to emergency responders and healthcare professionals.
- The first 10 days of leave may be unpaid but the remainder of the leave must be paid by the employer.
- Standard FMLA requirements do not apply to the expanded policy.
This time is in addition to the benefits employers are currently offering employees. Additional requirements include posting requirements, potential job restoration following the need for leave, and no retaliation clauses. This is a robust law with various caveats and requirements. Additional information will be forthcoming as we begin to draft employer policies and learn more about the emergency ruling.
There are Tax Credits available for employers implementing these plans. Employers will receive a 100% refundable tax credit on the wages paid for leave due to COVID-19.
The Human Resources professionals from JB Consulting Systems are available to further discuss the upcoming changes, answer questions, or review your current policies and practices for compliance related to these new legal requirements.