March 21st, 2020

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COVID-19 & Your Team: Families First Coronavirus Response Act

With new directives about social distancing and shelter-in-place being announced daily, it’s understandable if you as a practice owner might be feeling overwhelmed, confused, and anxious, particularly in light of the passage of the Families First Coronavirus Response Act.

This legislation, passed by Congress on March 14 and signed into law by the president shortly thereafter, is a comprehensive relief bill aimed at softening the financial fallout of COVID-19 on working families.

This law goes into effect April 2, meaning no one has much time to adjust to its mandates. You’re probably wondering, “How does this bill impact me as the owner of a small business in the healthcare field?” We’ll try to answer that question here.

Let’s begin with the Emergency Sick Leave provision of the bill. This section states that employers with fewer than 500 workers must provide employees who cannot telework with paid sick time off if the employee is:

  • subject to a quarantine or self-isolation order
  • advised by a healthcare provider to self-quarantine due to coronavirus concerns
  • currently experiencing COVID-19 symptoms and is seeking a medical diagnosis
  • caring for an individual in quarantine
  • caring for a child whose daycare or school is closed and other child care cannot be obtained due to coronavirus precautions
  • an employee who is experiencing any other substantially similar condition specified by HHS in consultation with the Treasury and Labor Departments.

This provision is complicated and multi-faceted, but here are a few key takeaways: full-time employees are entitled to 80 hours of sick leave, and part-time workers are granted leave equivalent to their average hours worked in a two-week period. All employees who meet the above criteria are eligible for this benefit, regardless of how long they’ve worked for you.

The bill does offer some wiggle room to small enterprises. If you employ fewer than 50 people and can prove that the imposition of such requirements would jeopardize the viability of your business going forward, you can appeal to the Department of labor for an exemption.

Let’s move onto to the second section of the bill, which applies to Emergency Family Leave. Under this provision, you’ll be required to provide up to 12 weeks of family leave for employees who’ve been on the job for at least 30 days and are unable to work or telework because they have to care for a minor child if a) the child’s school or place of care has been closed, or b) if the child care provider of that child is unavailable due to a coronavirus emergency.

The first 10 days of leave can be unpaid – your workers might opt to use accrued vacation days, for instance – but after that, they’re entitled to 2/3rds their normal pay rate. Paid leave is capped at $200 per day and $10,000 total.

The same potential for exemption that applies to the Emergency Sick Leave provision of the law applies here, too. You can appeal to the Department of Labor if you employ fewer than 25 people and can show that payouts to workers while they’re on leave will make it impossible for you to stay in business.

If you’re thinking at this point, “I am not going to be able to afford to follow this law,” there’s hope. To help you shoulder the significant financial burdens you might face in complying with this bill, it also includes a third provision dealing Employer Tax Credits.

This is perhaps the most complex and legalese-heavy portion of the bill, but here’s what you need to know: as an employer of fewer than 500 workers, you are eligible for a refund of the 6.2% employer portion of the Social Security tax to help you cover wages paid to employees for time off under the sick leave and family leave program.

  • The sick leave credit for each employee will be for wages (including qualified health plan expenses relating to those wages) of up to $511 per day while the employee is receiving paid sick leave to care for himself or herself, or $200 if caring for a family member or child whose school has closed. The credit will be limited to 10 days per employee per quarter.
  • The family leave credit for each employee will be for wages (including qualified health plan expenses relating to those wages) of as much as $200 per employee per day, and $10,000 in the aggregate for all calendar quarters.
  • To prevent a double benefit, employers must include the amount of credits received in their gross income.

A complete list of the statute’s requirements and benefits can be found here.