WHAT THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT MEANS FOR YOUR SMALL BUSINESS
The business landscape is changing rapidly in light of the COVID-19 outbreak, and especially so for entrepreneurs and small businesses. Earlier this week, another big change for Small Businesses came through when the U.S. Senate passed the "Families First Coronavirus Response Act". Here is what we know so far about this relief bill and how it may affect your business and your employees:
Why is the FFRA Needed?
Many small - mid sized businesses do not offer paid sick leave. Although many states (and some cities, like Los Angeles) have enacted their own Paid Sick Leave ordinances, prior to the FFCRA there has not been a Federal sick leave policy. Federally, there is the Family Medical Leave Act (FMLA), however this unpaid leave only applies to businesses with employees of 50 or more. Due to the current coronavirus outbreak, many businesses are operating without a large percentage of their employees due to sickness or the need to care for their family and children. If employees are sick or need to care for their family due to COVID-19, many would not be able to make ends meet without a paycheck for an extended period of time.
In response to the Coronavirus outbreak and the impact it's having on businesses, the U.S. Senate passed the "Families First Coronavirus Response Act", which focuses on providing paid sick leave to certain workers and also expanding coverage of the FMLA. Under this bill, it provides employees of small-mid sized businesses affected by the novel coronavirus additional resources and guaranteed paid sick leave. The FFCRA is the 2nd bill approved in response to this situation, and discussions are underway on the 3rd, and potentially larger, bill. Under the FFCRA, it guarantees free coronavirus testing, covers emergency room visits and doctor fees related to coronavirus care, and it also provides paid sick leave, job protected leave, expanded unemployment insurance and food assistance.
So what does this mean for your business and your employees?
Emergency Paid Sick Leave
FFCRA requires businesses with less than 500 employees to provide 2 weeks, or 10 days, of Emergency Paid Sick Leave (EPSL) during the coronavirus outbreak. This ensures paid sick leave to those who are or may become quarantined due to the coronavirus. The finer details of this are -
Full Time Employees are eligible for up to 10 days = 80 hours
Part Time Employees - average out the # of hours the employee works over a 2-week period to determine sick leave allowance
EPSL due to the coronavirus is effective immediately for all employees - there is no minimum length of employment required.
Employers cannot require employees to use any other forms of paid leave before using EPSL
EPSL is a job-protected leave.
Covered workers include federal government employees, gig economy workers + self-employed workers.
Although this may initially hit small business owners financially, under the FFCRA this sick leave is to be fully reimbursed by the federal government within 3 months through tax credits that count against the employer's payroll tax. The provisions of this act expire on December 31, 2020
Emergency Family + Medical Leave Expansion Act (temporary FMLA provisions)
This portion of the FFCRA expands on the FMLA to include the coronavirus as a "qualifying need" for a job-protected leave of absence. The finer details of this FMLA Expansion include -
Employees must be employed with the company for at least 30 days in order to be eligible for benefits under this provision
Eligible employees may take up to 12 weeks of job-protected leave for the following coronavirus related reasons - 1) To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; 2)To care for an at-risk family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; and 3) To care for a child of an employee if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a coronavirus.
This would run concurrently with the Emergency Paid Sick Leave Act. After the 2 weeks of paid sick leave, employers are to provide eligible employees with pay amounting to no less than two-thirds of the employee's usual pay for up to 12 weeks. The EFMLA provisions expire on December 31, 2020
"So...is my small business affected?"
Chances are, yes. If your business falls within the above requirements, an employee may claim paid leave for any of the following reasons:
They have been exposed to or exhibit symptoms of the coronavirus.
They are recommended to quarantine by a healthcare provider and cannot work from home.
They need to care for a family member who has been exposed to or exhibits symptoms of the coronavirus.
They need to care for a child younger than 18 years old because their school or their childcare provider is unavailable.
If your company already provides two weeks of sick leave, the FFCRA might not change much for your current policy. However, chances are your business may now have to comply with the expanded FMLA provisions, which require employers to provide partial pay and job-protected leave to employees for a COVID-19 coronavirus-designated reason. If you are a business with less than 50 employees, the bill does appear to state exemptions to the EFMLA can be requested from the Department of Labor.
What's next for Businesses?
Most immediately, employers are now required to provide notice to their employees regarding EPSL and the EFMLA via postings and updated policies. If you need an HR Partner to create these policies and postings, empowerHR Consulting is here for you!
There is certainly a lot to unpack within the FFCRA and the COVID-19 situation is constantly evolving - but empowerHR Consulting is here to walk alongside you as we navigate this together. Now more than ever, the people-side of your business needs care and detailed attention. As information continues to unfold, we will keep you updated with all the HR details you need to know.
We're here to partner with you to strengthen your business however we can. Reach out to us at anytime.
hello@empowerHRConsulting.com II 818.253.4362