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Making Sense of the Families First Act for Home Services

Making Sense of the Families First Act for Home Services

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Posted by EJ Brown

March 26, 2020

Get a summarized one-pager of the Families First Coronavirus Response Act:

UPDATED: Tuesday April 7th, 3:10 PM PST

The

Families First Coronavirus Response Act

requires companies with under 500 employees to provide their staff with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. 

Businesses with under 50 employees will be able to apply for exemptions to this requirement, but details of who can apply and how are still forthcoming.

We’ll walk you through what home service companies need to know about these new federal mandates.

The Gist

There are two parts to this Act.  The first part of the law requires employers to provide up to two weeks paid sick leave for all employees. If an employee is unable to work for specified medical reasons relating to the COVID-19 pandemic, you're required to pay for up to 80 hours.

If they are staying home to care for others during the outbreak (children, family members), you're required to pay up to two-thirds of their salary for the two week period. 

Part-time employees can receive a portion of their paycheck based on their normal hours for each of these reasons listed above. 

The second part of the law requires you to provide ten weeks of additional leave as an extension of the existing Family Medical Leave Act (FMLA). During this time, employers are required to pay two-thirds of an employee's salary if they are required to stay home to care for a child whose school or child care provider is closed/unavailable due to COVID-19. 

The Act does, however, enable employers to receive 100% of the wages they pay for this sick leave or FMLA related to this crisis as a tax credit. Please consult your tax advisor here.

The Specifics 

The

Department of Labor’s Wage and Hour Division

administers and enforces the new law’s paid leave requirements. The Act goes into effect on April 1, 2020, and applies to leave taken between April 1, 2020, and December 31, 2020.

Generally, the Act provides that covered employers must provide to all employees: 

Two weeks (up to 80 hours) of paid sick leave at the employee’s regular pay (capped at $511 per day per employee) when:

  • The employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a healthcare provider).

  • The employee is experiencing COVID-19 symptoms and seeking a medical diagnosis.

Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular pay (capped at $200 per day)

when:

  • The employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a healthcare provider)

  • Care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19

  • The employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.

Up to an additional 10 weeks of paid expanded Family and Medical Leave at two-thirds the employee’s regular rate of pay when:

  • An employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. 

Extended FMLA coverage only applies when the employee has been with the company for at least 30 days 

Examples

1. Your employee calls in sick for COVID-19 specified reasons. You are required to pay them for up to 2 weeks (80 work hours) for 100% of their salary. If their salary is more than $511 per day, it is capped at that amount for the 2 weeks.

2. If your employee tells you they cannot work as they have to take care of their children due to their school being closed, you need to pay them 2/3rds of their salary for 2 weeks. If 2/3ds of their salary is more than $200 per day, it is capped at that amount for the 2 weeks.

3. If your employee needs to take additional time off beyond those 2 weeks to care for children, you must continue to pay them 2/3rds of their salary for up to 10 additional weeks.  

Please note: The salary you pay in examples 1, 2, and 3 above can be recovered in the form of a federal tax credit.

Who This Act Applies To

All employees of companies under 500 employees; This begins as of 4/1/2020 and is mandated at least through the end of 2020.                                                                                                                                                                                                                   

Exceptions for Employers: 

(1) These leaves (and payroll tax credit) are not retroactive. Employees are not entitled to pay under these leaves if they were absent or out of work (for any reason) prior to April 1.

(2) These leaves are not available to furloughed employees. 

(3) For businesses with fewer than 50 employees, the Department of Labor will be releasing criteria for leave pay exemptions.

(4) There will be a 30-day non-enforcement period for businesses making a reasonable effort. 

Exemptions

According to the Department of Labor

,

small businesses are exempt from the mandated paid sick leave and expanded FMLA if the business employs less than 50 people and the leave is requested because of a lack of child care for reasons related to COVID-19,

and

one of the three following conditions is met:

  • The mandated paid sick leave or expanded FMLA would cause the small business to stop operating at a minimal capacity

  • The absence of the employee(s) would pose a substantial risk to the health and operations of the business

  • There are not enough workers to fill in for the missing employee and their labor is needed to keep the business running at a minimal capacity.

There are no exemptions related to employees that have been quarantined or who are requesting leave to care for an individual that is self-quarantining. Small businesses are still responsible for paid leave in these cases.

FAQs

How do I file for the tax credit?

 Tax credits should be applied fo the calendar year 2020 taxes when submitted.

How do I apply for an exemption?

There is currently no guidance on how to apply for an exemption.

Related Online Resources

Learn more from the Department of Labor:

Get a summarized one-pager of the Families First Coronavirus Response Act:

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