Business Bites Episode 111: Families First Coronavirus Response Act (FFCRA): What You Need to Know

Families First Coronavirus Response Act (FFCRA): What You Need to Know

Episode 111 on the Business Bites Podcast

The Gist Of This Episode: Signed into law March 18, 2020, this legislation is for employers, and it contains a number of components that are designed to address the current coronavirus pandemic. In this episode, Rachel will explain what this legislation is so you will be ready when it goes into effect on April 2, 2020. As this is a rapidly changing situation, updates will be made as needed. 

 

What you will learn:

  • What businesses this applies to (yes it applies to you!)
  • How do employees qualify
  • How much do you have to pay
  • Are there any exemptions
  • and more!

 

FAQs:

An employee can take emergency paid sick leave if the employee is unable to work (even by telework) for the following reasons:

  • experiencing symptoms of COVID-19 and seeking a medical diagnosis
  • federal, state or governmental quarantine or isolation/shelter in place order related to COVID-19
  • caring for a son or daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 precautions
  • advised by a health care provider to self-quarantine because of COVID-19
  • care giving for an individual under quarantine/isolation/shelter in place order or self-quarantine
  • experiencing any other substantially similar conditions specified by the Secretary of Health and Human Services

 

Sick Pay Calculation

Identify the reason for the leave > Use the proper formula

 

Reason: Quarantine or is experiencing symptoms of COVID-19 and seeking treatment

Pay: Regular rate of pay up to $511/day and $5110 total.

 

Reason: any of the other qualifying reason

Pay: 2/3 of regular rate of pay, with cap of $200/day and $2000 total

 

Emergency Family and Medical Leave

An employee who qualifies for emergency family and medical leave under the FFCRA is also entitled to 12 weeks of leave under FMLA

Expand To Read Episode Transcripts

Hey everyone, it’s Rachel Brenke from the Business Bites podcast. This is going to be episode 111. We are going to be talking a bit about a lot of the Coronavirus stuff and the impact that many of you employers need to know about paid leave. Now understand, I’m going to put all show notes at rachelbrenke.com/epi111. But, as changes come out, we may change things. So my recommendation would be listen to this podcast, head over to the episode page and any updates, we will have directing you to a new update, a new episode that is going to come up out later. This episode we are going to be focusing on the Families First Coronavirus Response Act the FFCRA. It just was signed on March 18th, 2020 in response to all the Coronavirus stuff. It is important if you are an employer, small business owner, and you have no idea what’s going on. So let’s go ahead and dig right in.

Welcome to the Business Bites podcast, the podcast for busy entrepreneurs. Whether you are an online entrepreneur or you’re seeking after brick and mortar success, this podcast brings you quick bites of content so you can learn and grow anywhere you are. Now here’s your host, Rachel Brenke.

All right guys, episode 111 of the Business Bites podcast. I am your host Rachel Brenke. And we’re going to be talking about what employers need to know about paid leave under the newly signed Families First Coronavirus Response Act. So President Trump signed this on March 18th, 2020. Like I mentioned in the intro, this may change. So if you’re listening to this later and you’re going, “Wait, this could be wrong,” or, “I don’t know if this is still accurate,” make sure you go to Rachelbrenke.com/epi111 and we’re going to be linking any new updates there. Also in our Facebook group, Business Bites podcast.

So this legislation is for you employers and it contains a number of components that are designed to address the current coronavirus pandemic. And two major aspects of the FFCRA, this act, are related to emergency sick leave and emergency family and medical leave that many employers maybe being asked about by your employees or things that you’re worried about for yourself, if you’re an employee of your own business. We’re going to go over some of the key questions for private employers about the leave requirements. Understand this is a federal act. There may be additional supports and things that you can get from your state. I’m also going to link some of the disaster relief SBA loans that are available. All of that is going to be a little separate from this. This is what employees are entitled to under the Families First Coronavirus Response Act. So these are supposed to go into effect. And understand, these are paid leave laws and they’re brand new, so they are separate from FMLA, which I am going to address here in a little bit.

They’re supposed to go into effect April 2nd, 2020. And I’m recording this on March 24th. Little behind the curve. I’ve been trying to get homeschool going with my five kids. We were on spring break last week and you just guys know that quarantine, parenting, and isolation, all that has been going on. So I apologize for being a little late, April 2nd. So this is still giving you guys a week to get your heads around this.

The paid sick leave requirements under the FFCRA, known as Emergency Paid Sick Leave Act, do go into effect April 2nd, 2020. These new family and medical leave requirements are set forth in the section specifically entitled, if you want to go read it, The Emergency Family and Medical Leave Expansion Act. So we’ve got a couple of days, understand that you guys need to get your heads around this. Understand, I’m not going to go into all specifics on here. Make sure you take notes and reach out to your local business attorney. My law firm, Eden Law, we have a nationwide network of attorneys, so eden-law.com we’re also doing discounted inquiries, consultations, initial meetings and all of that to help you guys. And we’re looking at doing additional webinars, blah, blah, blah. Throwing that out there in case you don’t have your own attorney. But if you do, great. Reach out to them and see what they can do to help you.

So this specifically applies if you are an employer of a private company and you employ fewer than 500 employees, which honestly for the Business Bites podcast is going to be the majority of you. And understand, maybe you’re thinking, “Well I don’t have employees, it’s just me.” What if you’ve listened to the Business Bites podcast in the past and you are an LLC with an S Corp election. So you W2 yourself, you, or you are an S-Corp. Guess what? You’re paying employer taxes, right? Your entity is an employer of you. So you may be entitled to this because it’s less than 500 employees. So these paid leave laws applies specific to those that employ less than 500 employees.

There’s going to be other legislation that may come along to affect larger employers. That’s not going to impact many of you that listen, because I specifically target smaller businesses. But if you have questions about that, just ping me and I’ll see if I can get an episode up for you guys on that.

So which of your employees or yourself are covered? The paid sick leave law is going to apply to all employees. And let’s talk about this. Let’s just go across this and I’m going to link the other episodes on the episode page. Employees are those that are employee status. Typically you’re going to receive a W2. Typically you’re going to receive a paycheck. This does not cover 1099 contractors. The reason I want you guys to hop over to Rachelbrenke.com/epi111 is for updates. But also so that you can link to the episode where I talk about the difference between employees or contractors.

Because, and this is something that we may see coming down the line. You may have someone that you think is a contractor. You call a contractor, but you actually treat them like an employee. They listened to the Business Bites podcast or they learned that they’re actually an employee even though they’re not receiving a W2 or a consistent paycheck. If they’re treated like an employee and their categorized as that, they can pursue under this paid leave act. So I’m going to link that episode so you guys can be sure to skip over there and make sure that you’re categorizing all of your team members the right way. Because the paid sick leave law applies to all employees of covered employers.

The paid family and medical leave requirements apply to employees who have been employed for at least 30 days. All right, so if you just hired somebody during the pandemic, not going to apply. But anybody that’s over 30 calendar days. Employees to be excluded, are there any? Well, employees who are healthcare providers or emergency responders maybe excluded from both the paid sick leave and the paid family medical leave requirements. Not going to go too much down the line because it’s a very nuanced section I don’t think many of you guys are going to have. But if you do, again, ping me and we can get you more information.

So let’s move into what actually triggers the emergency paid sick leave. Right? An employee can take emergency paid sick leave if the employee’s unable to work, and this even includes unable to telework for the following reasons. Perhaps they’ve been advised by a healthcare provider to self quarantine because of the Coronavirus. Two, subjection to federal, state or local quarantine or isolation order related to Coronavirus. Three, they’re caring for an individual under quarantine, isolation order, or self quarantine. Four, they may be experiencing symptoms of Coronavirus and seeking a medical diagnosis. Five and this is for all you parents, if you’re caring for a child whose school or place of care is closed or whose childcare provider is unavailable due to Coronavirus, which for us in Virginia, they just shut down all schools. I’m not necessarily that aware, because we have an in home care. But many childcare providers are not providing childcare so it would fall under this. And lastly, another way to trigger emergency paid leave, paid sick leave as an employee if you’re experiencing any other substantially similar conditions specified by the Secretary of Health and Human Services. And that’s kind of the catchall there.

So the biggest things here is understand, if you’re experiencing symptoms, if you’re caring for an individual, and that could be an individual under quarantine or isolation or even self quarantine, or caring for a son or daughter. Being advised, it’s not necessarily a requirement, but it is one that falls under here. So this is pretty broad. If you guys see, basically if you have symptoms or you’re just self isolating, it can trigger emergency paid sick leave. Because think about it, we can’t necessarily run out to the hospital right now and get care. So it’s a pretty broad outline of the law allowing for employees to trigger emergency paid sick leave. Okay? So that was the Emergency paid sick leave.

Let’s move to triggering emergency family and medical leave. So the final FFCRA legislation applies only to employees who are unable to work, even by telework, because of the need to care for a child under the age of 18 if the child’s school or place of childcare has been closed or if the childcare provider is unavailable due to the coronavirus public health emergency. Remember, if your company’s covered by the standard provisions of FMLA, which is the Family Medical Leave Act, which is separate from this, that is for companies with 50 or more employees, which is a very big distinction between FMLA and the FFCRA, which is very specific to coronavirus, is that if your company is covered by the standard provisions of FMLA, employees who need to leave to care for their own serious health condition or that of a family member may still be entitled to ordinary FMLA leave, which is unpaid. So we have both going on here.

Employees can potentially invoke and utilize FMLA leave which is unpaid, and also the Emergency Family and Medical Leave. Here’s the big question. Really, this is what employers want to know. How much paid sick leave is allowed? A full time employee is eligible for 80 hours. So that’s going to be two 40 hour weeks of paid sick leave. A part time employee is eligible for the number of hours that the employee average works. So what do they work on average over a two week period?

Now that we have the amount of time, how is the sick pay calculated? Well, the rate of pay depends on the reason for the leave. So I just gave you guys all the reasons which are also going to be listed and bullet pointed in a checklist fashion on the notes page, Rachelbrenke.com/epi111. But first, if the leave is necessary because the employee’s under quarantine or experiencing symptoms and seeking treatment. Okay, so they’re under quarantine or experiencing symptoms and seeking treatment, then the employee receives his or her regular rate of pay up to $511 per day. If the leave is necessary for any of the other qualifying reasons that we mentioned such as caring for children due to school closure, then the employee’s only entitled up to two thirds of their regular pay, with a cap of $200 per day with $2,000 total.

So we have how much sick leave is allowed full time employees, 80 hours part time, the number of average hours over a two week period. And then their pay is calculated base on the specifics that we talked about. So that’s the paid sick leave.

Switching over to the Emergency Family Medical Leave that’s allowed. This provision is an amendment of the existing FMLA, which provides 12 weeks of leave. So an employee who qualifies for the Emergency Family and Medical Leave FFCRA is also entitled to 12 weeks of the unpaid paid leave under FMLA. So how is the Emergency Family Medical Leave pay calculated? The first 10 days of leave are unpaid. But employees can elect to substitute any available paid leave, which would likely include the pay leave granted under the FFCRA that we just talked about during that period. After the first two weeks, the remainder of the leave is paid at a rate of at least two thirds of the employee’s regular rate of pay, with a maximum of 2000 per day and $10,000 total.

Oh, let’s take a breath. I wanted to get through all that. I really do encourage you guys, click over. We’re going to make a little chart. You’re going to be able to look at all this and you’re going to be able to just see it right away. But I wanted to read it out to you. There is going to probably be pay that you’re going to have to pay for your employees.

Now, the flip side of that is if you are the employee of your business, you pay yourself, it’s going to fall within that. You’re looking at other deductions. Don’t know what the tax consequences or tax benefits are going to be at this time under this. That’s something to come. We will do an update in the future.

Now here’s a big question is the Emergency Family and Medical Leave job protected like ordinary FMLA? One of the big questions that many employees right now are asking, “Is my job protected if I have to invoke the FFCRA? What happens if I get sick? What if I have children that have to care for?” Because let me tell you guys, shit hit the fan here. Guess I got to put an explicit rating now. All five of my kids are home because they canceled school for the rest of the year. So I don’t have anybody to care for my children. We do have in-home care, but guess what? There’s five of them. I have to supplement. I may be able to invoke this.

But here’s the question, that’s because I work for myself. But what if I worked for someone else? Is my job protected like ordinary FMLA under this specific Coronavirus FFR … I screwed that up. FFCRA, the question is that the answer is in general, yes. However, here’s a big however, employers of fewer than 25 employees do not have to rehire that employee if their position is eliminated due to economic conditions or changes that affect the employer’s operations that result from this Coronavirus or another public health emergency. So in general, the answer is yes. However, if you have less than 25 employees, you do not have to rehire that employee if their position is eliminated due to economic conditions, which is pretty broad. That’s a very broad allowance written into this law, or other changes that affect your operation.

However you’re just not off the hook. You can’t just eliminate a position, right? You have to make reasonable efforts to provide an equivalent position. And if none is available, you have to contact the employee with an equivalent position becomes available during the next year following the conclusion of the emergency leave. The reason that they put this in here is because they don’t want employers trucking along, all of a sudden saying, “Well, I’ve got less than 25 employees. I eliminated the position due to economic conditions.” And then when stuff comes on the upswing, rehiring somebody else. We’re still protection for employees, which is another big piece of that discussion between W2 employee versus 1099 contractor. Again, linked on the episode page.

The protection that’s available to W2 employees is that you the employer have to contact the employee if an equivalent position becomes available during the next year following the conclusion of their emergency leave. All right? And probably, here’s where we’re going to end. One of the biggest questions, if I pay or if I’m forced to pay for this emergency sick or family medical leave, it’s going to bury me. What am I supposed to do? Paying for the leave under the FFCRA is going to be a burden for many of you guys. And I get it. However, both the paid sick leave and paid family provision state that the Secretary of Labor has the authority to issue regulations to exempt small businesses with fewer than 50 employees, which is going to be many of you, if compliance would, and this is the quote, “jeopardize the viability of the business as an ongoing concern.”

That sounds fricking great, right? However, we’ve not received much guidance about this. I haven’t heard much as of this recording from Secretary of Labor what they’re actually going to do for us true small businesses. All right. So understand right now, as it stands, right at this recording, March 24th, 2020, if your employees want to invoke the Emergency Sick or Family Medical leave under FFCRA, you got to pay it or you risk getting an employment claim filed against you. You’ve risk also losing a team member. You risk doing bad business. That being said, Business Bites podcast is committed. We’re going to be updating as much as we can to see if they’re going to put out more information about the exemption of small businesses with fewer than 50 employees.

All right. So all of that to say a lot of information. I totally get it. Overwhelming, I talk fast. If you need to relisten again, slow it down. All the big podcasts out there allow for you to slow it down. Business Bites, we try to get targeted right to the information. I would love for you guys to dig in and let me know the stories. Because you know what? You get into the Facebook group, we start talking about how this can detrimentally impact your business. Not that I want it to, but you share the stories with me. I’m in a position to be able to be a loud mouthpiece to government workers. I’m able to talk to politicians and raise the white flag like in these situations when we say, “Guess what? Paying this emergency sick or family medical leave can ruin my business. It can put me under.” They have to hear the real life stories.

So please feel free to dig into the Business Bites podcast group on Facebook. Just search Business Bites. We’re also going to link it on the episode page, Rachelbrenke.com/epi111. Episode’s a little bit longer than I wanted it to be, but I really wanted to run through these top questions for you on the FFCRA. Changes may come, like I’ve said multiple times. But feel free to ask questions. We are here to help you and I wish you guys the best of health.

Thanks for joining Rachel on this episode of the Business Bites. For show notes, a list of recommended tools or referenced episodes, you can find them businessbitespodcast.com. Until next time.

About the author

Rachel Brenke is a lawyer, author and business consultant. She is currently helping professionals all over the world initiate, strategize and implement strategic business and marketing plans through various mediums of consulting resources and legal direction.

Hi, I’m Rachel Brenke

Rachel Brenke

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