Note: Since publishing this post (as seen below), the FFCRA legislation has been revised. While it's been billed as a "technical correction" by Democratic leaders, the changes are substantial. The new measure will still provide two weeks of paid sick leave to workers affected by the pandemic, but the next 10 weeks paid leave will be limited to only those workers caring for a child whose school or day care has been shut down. (Workers who had been in quarantine, or caring for a family member affected by the crisis, will not be eligible for the additional 10 week of paid leave.)
In a press conference just a few hours ago, Senate Majority Leader Mitch McConnell (R-Ky.) announced that the Senate will, in fact, pass the Families First Coronavirus Response Act (FFCRA) which was passed by the U.S. House of Representatives over the weekend.
Senators had been critical of the House legislation, describing it as a “non-comprehensive bill” that simply doesn’t do enough to help small business. Earlier today Senator McConnell went so far to say that the the Senate would not pass the bill unless it included “significant and bold new steps”.
Realizing that changes to the bill would result in the measure having to go back to the House for approval, the Senate reversed course this afternoon, anxious to show the country bipartisanship in the face of a global pandemic.
"A number of my members think there were considerable shortcomings in the House bill. My counsel to them is to gag and vote for it anyway," McConnell said.
McConnell then pledged not to adjourn the Senate until passing the House bill, as well as a third stimulus package, which is expected to top $850 billion and focus on small business and industry.
Here are the details of the "phase two" package the Senate looks to pass as early as this evening.
Families First Coronavirus Response Act (FFCRA) - An Overview
With bipartisan compromises negotiated by Speaker of House Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin, the House passed the FFCRA on a bipartisan 363-40 vote this weekend.
The bill, which only applies to employers with fewer than 500 employees, includes, among other things, the following major provisions impacting employers and employees;
Paid Sick Leave: The bill creates a paid sick leave benefit for coronavirus-related absences that are not covered under an existing employer-provided paid sick leave plan. Called the “Emergency Paid Sick Leave Act (EPSLA) of 2020”, it provides 80 hours of sick leave for full-time employees, while part-time employees would be eligible for paid sick leave based on the average number of hours worked over a given period of time.
FMLA Expansion: The bill expands the Family Medical Leave Act (FMLA) to cover coronavirus-related absences, and adds a substantial paid component to FMLA benefits for these absences. Called the “Emergency Family and Medical Leave Expansion Act” (EFMLEA), it dramatically expands the qualifying reasons for leave under the FMLA.
Tax Credits: The bill provides payroll tax credits to employers for payment of paid sick or paid family leave benefits to their employees. These tax credits would be provided on a quarterly basis and are allowed against the employer’s Social Security taxes subject to certain caps and limits.
Families First Coronavirus Response Act (FFCRA) - The Specifics
Emergency Family and Medical Leave Expansion Act (EFMLEA)
The EFMLEA is essentially a limited-time amendment to the Family and Medical Leave Act (FMLA), passed in 1993. (The original FMLA provides workers with 12 weeks of protected leave, but they are unpaid.)
The EFMLEA will provide up to 10 weeks of paid leave to eligible employees for coronavirus-related reasons, including; staying home due to coronavirus, caring for a family member under quarantine or isolation, and/or caring for a minor who cannot attend school or daycare because of coronavirus.
Under the EFMLEA, the first two weeks of time away from work remain unpaid, while the following ten weeks will be paid at a two-thirds rate, while on leave. This benefit will only apply to eligible employees, defined as those who have been employed with the employer for at least 30 calendar days. Employees can also use any paid vacation, personal, or sick days during their first 14 days of unpaid leave.
One important note; the EFMLEA technically will apply to employers with fewer than 50 employees. That said, the EFMLEA has a special provision that gives the Department of Labor (DOL) explicit authority to create regulations that would: “exempt small businesses with fewer than 50 employees from the requirements of [the EFMLEA] when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
Net, it’s more than likely that many small businesses may be able to avoid extending EFMLEA paid leave benefits to their workers, should they so choose.
There are other details in the EFMLEA portion of the bill which employers will want to familiarize themselves with once it becomes law. They include;
- The expanded definition of a family member to include; a pregnant woman, senior citizen, or individual with a disability, any of whom are; the child of an employee, the next of kin of an employee (or person for whom the employee is next of kin), or the grandparent or grandchild of an employee
- The expanded definition of parent to include; parent-in-law, parent of a domestic partner’s child
- A new leave reason, that being a closed school or closed childcare provider
- A modified definition of a covered employer, that being an employer with fewer than 500 employees (though, as mentioned a moment ago, the bill contains provisions that allow the United States Department of Labor to exempt businesses with fewer than 50 employees if the imposition of leave requirements would jeopardize business viability)
- An expanded definition of an eligible employee, that being employees who have been employed for at least 30 calendar days by the employer
- An exclusion power granted to the DOL to exclude health care providers and emergency responders from the definition of an eligible employee
- An expansion of the qualifying reasons for leave to include; quarantine, by recommendation or order by a public health official or health care provider (the employee must also be unable to perform jobs functions through telework)
- An expansion of the qualifying reasons for leave to include; care for a (recommended or ordered) quarantined family member, including a parent, spouse, next of kin, son or daughter under the age of 18, grandparent or grandchild
Emergency Paid Sick Leave Act (EPSLA)
The EPSLA is another law contained within the FFCRA that will provide paid leave to workers impacted by the coronavirus pandemic. It provides full-time employees with up to 80 hours of paid sick leave for many of the same coronavirus reasons specified in the EFMLEA.
Paid sick leave pay will be equal to an employee’s current compensation, unless the employee is caring for an eligible family member affected by the coronavirus. In that case, it will be reduced to two-thirds of the employee’s regular pay.
Part-time employees are also entitled to paid sick leave, but it will be limited to the average number of hours the employee works over a two-week period.
The EPSLA also contains provisions barring employers from discriminating against employees who take advantage of benefits provided by the new law. Employers are also prohibited from retaliating against an employee who files a complaint or initiates a proceeding under the EPSLA.
Unlike the EFMLEA previously discussed, the EPSLA doesn’t have a provision allowing the Department of Labor to create regulations that would exempt small businesses, such as those with fewer than 50 employees.
Net, it’s possible that the EPLSA may provide benefits that cover far more employees than the EFMLEA.
A Few Final Points
Employers will be required to post notices in the workplace, alerting employees to these new laws. The bill orders the Department of Labor to provide guidance within seven days from enactment.
For employers with existing sick leave plans, the leave under the Act is in addition to prior entitlement, meaning that employers may not change their prior policy after the date of enactment of this legislation, in an effort to avoid this provision.
It should also be noted that the provisions of the Families First Coronavirus Response Act will sunset at the end of 2020. This will once again leave workers without paid leave vulnerable if the coronavirus should reappear in 2021.