Families First Act signed — Important Changes to Small Business Paid Time Off and FMLA

We’re breaking from our usual blog format to bring you breaking news about the first large economic stimulus package from Congress during the Covid crisis.

The Families First Act has introduced paid sick leave and expanded family and medical leave to small employers.

President Trump signed the bill late on Wednesday, March 18, 2020.  It is set to sunset on December 31 of this year. In the meantime, it creates broad new responsibilities for small business owners.

If you have fewer than 500 employees (yes, you read that right — FEWER than 500 employees!) you MUST comply with these new rules by April 1.

The new bill has two parts: 

  • Emergency Paid Sick Leave 
  • Emergency Paid Family and Medical Leave Expansion 

PART 1: Emergency Paid Sick Leave Act 

  • Applies to ALL private employers with fewer than 500 employees 
  • Applies to all government employers regardless of size 
  • Full and part-time employees are covered 
  • Employees are NOT required to have obtained a minimum length of service to be entitled to paid leave 
  • Full-time employees are eligible for two (2) weeks (80 hours) of paid sick leave 
  • Part-time employees are eligible for two (2) weeks paid leave — the number of hours they will be paid is based on their average number of hours worked in a normal 2 week period (use 6-month average if hours fluctuate) 

NOTE:  This time is for true health absences only. Other ‘furloughs’ or layoffs are covered by state unemployment laws, many of which have already been amended to be more leinient during this crisis.

Employees may use Emergency Paid Sick Leave for the following reasons: 

  1. To comply with local/state/federal quarantine or isolation order 
  2. To self-quarantine, if employee has been advised to do so by healthcare provider 
  3. To obtain a medical diagnosis or treatment if employee is experiencing symptoms of COVID-19 
    **Total paid leave for items 1,2, and 3 above is capped at $511 per day and $5,110 in aggregate.
  4. To care for an individual who is advised or required to quarantine (not limited to family members) 
  5. To care for employee’s child if school or childcare provider has been closed or is unavailable due to COVID-19 
  6. To care for a similar condition, as determined by Secretary of Health and Human Services 
    **Total paid leave for items 4,5, and 6 above is capped at $200 per day and $2,000 in aggregate.

PART 2: Family and Medical Leave Expansion 

  • Applies to ALL private employers with fewer than 500 employees 
  • Applies to all government employers regardless of size 
  • Full-time and part-time employees are covered. 
  • Employees must have 30 calendar days of service before the first day of leave to be covered by family and medical leave expansion 
  1. Employers are required to provide up to 12 weeks of job protected leave under FMLA for COVID-19 
  2. The first ten (10) days of FMLA leave may be unpaid; however, employees may choose to use accrued paid leave (employer cannot require) 
  3. After the first ten (10) days, employer must pay employee not less than two thirds (2/3rds) of regular rate of pay.  Employees who work part-time or irregular hours are paid pro-rata based on the number of hours the employee worked in the prior 6 months before taking leave. If employee has worked less than 6 months, then use the reasonable expectation on the number of hours the employee would have worked. 
  4. Total paid leave may not exceed $200 per day and $10,000 in aggregate 
  5. Employees taking this leave are entitled to job protections similar to regular FMLA 
  6. Employers with 25 or more employees will have same obligation as regular FMLA to return employee to same or equivalent position after returning from leave. If the employee’s position no longer exists due to economic downturn, the employer must make efforts to return employee to work for one year after the leave. 

**There is an exemption for small businesses with less than 50 employees if requirements would jeopardize the viability of the business. 

Tax Credits for Paid Sick and Paid Family and Medical Leave 
Employers are entitled to a refundable tax credit equal to 100% of the qualified Sick Leave wages and Emergency Family and Medical Leave wages paid by employers for each calendar quarter. The aforementioned caps on the wages will apply to the tax credits. 

Testing for COVID-19 
Private health plans—including insured, self-insured, and grandfathered—must provide coverage for COVID-19 diagnostic testing and related services to employees and covered dependents without cost sharing (deductibles, copayments, etc.) 

And More…
Here’s a good source from a law firm that has much more detail on the FFA.

This is a comprehensive piece of legislation and there are other sections that deal with government programs, etc. Much of the implementation will rely on further guidance.

Nonetheless, it is imperative that all small business owners make plans now to provide the much-needed sick and FMLA time to employees who are impacted by the Corona Virus.

Here’s to (y)our health.

The Fuse Crew

Originally Published

0 thoughts on “Families First Act signed — Important Changes to Small Business Paid Time Off and FMLA

    • David Worrell says:

      No application is needed. This will happen in one of two ways:

      (1) You will self-deduct payroll taxes (FICA, FUTA) in an amount equal to what you pay for sick leave. If you don’t do your own payroll, contact your payroll provider.


      (2) You will claim the amount you spent on sick leave as a “Refundable Tax Credit” on next year’s corporate tax return.

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