By Rob Gilmore and Lyndsay Ross
[UPDATED 3-18-2020]
On Wednesday, March 18, the Senate passed the Families First Coronavirus Response Act and President Trump signed it into law. The Act requires:
- Free COVID-19 testing for all Americans
- Paid emergency sick leave and family leave for employers with fewer than 500 employees (subject to certain carveouts for health care workers and exemptions for small businesses under 50 employees):
- Emergency paid sick leave for employers with fewer than 500 employees – up to $511 dollars per day for 10 days for those in quarantine, caring for someone in quarantine, or who are caring for children at home whose schools are closed due to COVID-19;
- 10 weeks of emergency paid family leave for parents who are home caring for children whose schools have closed – up to $200 per day for 10 weeks;
- Employers will receive a refundable payroll tax credit to cover the cost of such leave.
The Act also contains funding for food security initiatives, and funding to stabilize state unemployment funds. A detailed summary of the Act is below. The full text of the Act may be found here, and a summary of the Act can be found here.
The Act guarantees free coronavirus testing.
Whether you have private insurance, are on Medicare or Medicaid, are a Native American or a veteran or are uninsured, the Act guarantees free coronavirus testing. Section 6001 requires health plans to provide coverage for diagnostic testing, including the cost of a provider, urgent care center and emergency room visits in order to receive testing, and mandates that coverage be provided at no cost to the consumer. An additional $1 billion is being set aside to reimburse the costs of testing and services provided to individuals without health insurance. Similar provisions provide for the free testing and associated services for those on Medicare or Medicaid, American Indians and Alaskan Natives, as well as active military and veterans.
The Act requires certain employers to provide paid sick leave.
Section 5101 is the Emergency Paid Sick Leave Act. This provision requires government employers and employers with fewer than 500 employees to provide two weeks of paid sick leave, paid at the employee’s regular rate, so that the employee may seek coronavirus testing or to quarantine. Alternatively, the provision allows the employee to receive sick leave paid at 2/3 of the employee’s regular rate to care for children whose school or other childcare is closed. Full time employees are entitled to 80 hours, and part time employees are entitled to the typical number of hours they would work in a normal two-week period. This provision would expire on December 31, 2020. Amounts are capped at $511 per day for sick leave and paid family leave at $200 per day – that would fully pay employees earning up to about $130,000 a year for two-weeks of sick leave and those earning up to $75,000 a year for 12 weeks of family leave period.
The Act amends the Family and Medical Leave Act of 1993.
At section 3102, the Act would modify the FMLA so that government employees and employees of employers with fewer than 500 employees, who have been on the job for at least 30 days, would have the right to take up to 12 weeks of job-protected leave. The leave may be taken to comply with a requirement or recommendation to quarantine, to care for an at-risk family member or to care for a child who can no longer go to school or childcare. The first two weeks may be unpaid (though an employee can elect to substitute two weeks of paid leave pursuant to the Emergency Paid Sick Leave Act or to use accrued PTO or sick leave) but after the first 14 days, employees are to receive a benefit from their employers that is no less than two-thirds of the employee’s regular pay. This provision would go into effect no later than 15 days after the date of the Act’s enactment. Employers are not allowed to require employees use their PTO or other paid leave provided by the employer before using the new paid sick time. However, the Act does not prohibit employers from changing their sick leave or PTO policies (though an earlier version of the bill did propose such a requirement).
The Act provides tax credits to employers
Employers may receive a refundable tax credit equal to 100% of the qualified family leave wages paid by the employer, or equal to 100% of qualified paid sick leave wages paid by an employer. The credit is applied to the tax that the employer normally pays towards its employees’ social security: if the costs associated with family or sick leave exceed the costs towards social security, the employer will be refunded the excess amount.
The Act may provide relief for small businesses and health care providers.
The Paid Sick Days for Public Health Emergencies and Personal and Family Care Act, found at Division F, requires employers to provide employees with at least one hour of earned paid sick time for every 30 hours worked. However, there is a carveout for small businesses, defined here as an employer with 50 or fewer employees. Small business employers, upon application and approval, can be reimbursed for wages paid to employees who utilize sick time offered by this provision or be exempted altogether from the requirement. The Secretary of Labor has the discretion whether to exempt the applying business. Additionally, health care providers and emergency responders can choose to exclude certain employees from the Act.
The Act provides food security initiatives.
The Act provides $500 million to the Special Supplemental Nutrition Program for Women Infants and Children, specifically for low-income pregnant women or mothers with young children who are laid off due to the coronavirus outbreak. An additional $400 million is to assist local food banks to meet increased demand. A later provision sets aside $250 million specifically for low-income seniors and will prove 25 million home-delivered and pre-packaged meals. Further, the COVID-19 Child Nutrition Response Act, found at Section 2201, would allow all childcare and adult care centers to offer food to go.
The Act offers $1 billion to states for unemployment insurance.
The Emergency Unemployment Insurance Stabilization and Access Act of 2020 provides $1 billion in emergency grants to states for costs related to unemployment insurance benefits. States have access to the funding so long as they meet basic minimum requirements, including mandating that employers give notice of potential benefits to laid-off workers and providing those laid-off with at least two ways to apply for benefits. $500 million of the funding would be reserved for emergency grants to states that experience at least a 10% spike in unemployment. For more information about the Families First Coronavirus Response Act, contact Rob Gilmore at rsg@kjk.com or 216.736.7240 Lyndsay Ross at lmr@kjk.com or 216.736.7201, or reach out to any of our Labor and Employment professionals.