Coronavirus & the Trucking Industry:
Families First Coronavirus Response Act
In the coming days and weeks, federal regulatory agencies, including the Department of Labor (DOL) and Health and Human Services (HHS), will provide guidance on how to execute or implement the new requirements. In the meantime, employers and advisors must rely on a good faith interpretation of the act’s text.
For certain circumstances related to COVID-19, employees will be eligible for:
- Up to two weeks of sick leave (full pay for self, 2/3 pay for family care) for illness, quarantine, or school closures
- Up to 12 weeks of Family and Medical Leave Act (FMLA) leave for school closures (10 days unpaid and then up to 10 weeks at 2/3 pay)
Effective Date of Law
The FMLA and Paid Sick Leave sections discussed below will go into effect on April 2, 2020 and expire December 31, 2020. It appears there is no retroactive application.
Key Elements for Employers
- FMLA expansion
- Paid sick leave
- Payroll tax credit
- Group health plan benefit mandate
Emergency FMLA Expansion
Covered Employers: Employers with fewer than 500 employees are covered.
Covered Employees: Any employee who has been employed for at least 30 calendar days, though employers may be able to exclude employees who are health care providers or emergency responders.
Covered Leave Purpose: To care for a child under 18 of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency, defined as an emergency with respect to the coronavirus declared by a federal, state, or local authority.
- Up to 12 weeks of job-protected leave.
- No pay for first 10 days of leave (other paid time off, and emergency sick leave under the FFCRA, may be applied)
- After 10 days, employers must pay two thirds of the employee’s regular rate of pay for the number of hours they would normally be scheduled to work, capped at $200/day and $10,000 total.
Reinstatement to Position after Leave:
The same reinstatement provisions apply as under traditional FMLA. However, restoration to position does not apply to employers with fewer than 25 employees if certain conditions are met:
- The job no longer exists because of changes affecting employment caused by an economic downturn or other operating conditions that affect employment caused by a public health emergency;
- The employer makes reasonable efforts to return the employee to an equivalent position; and
- The employer makes efforts to contact a displaced employee if anything comes up within a year of when they would have returned to work.
Note: The act reserves the right for the Secretary to exclude certain care providers and first responders from the list of eligible employees and to exempt small businesses with fewer than 50 employees if business viability is jeopardized.
Emergency Paid Sick Leave
Covered Employers: Employers with fewer than 500 employees.
Covered Employees: All employees (no matter how long they have been employed), though employers may be able to exclude employees who are health care providers or emergency responders.
Covered Leave Purposes:
- When quarantined or isolated subject to federal, state, or local quarantine/isolation order;
- When advised by a health care provider to self-quarantine (due to concerns related to COVID-19);
- When experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- When caring for an individual doing #1 or #2 (2/3 pay);
- When caring for a child whose school or place of care is closed due to COVID-19 (2/3 pay); or
- When the employee is experiencing any other substantially similar condition (2/3 pay).
Duration of Leave:
- Full time employees are entitled to 80 hours of paid sick leave.
- Part time employees are entitled to sick leave equal to the number of hours worked on average over a typical two-week period.
Rate of Pay:
- Sick leave must be paid at the employee’s regular rate of pay for leave used for the employee’s own illness, quarantine, or care.
- Sick leave must be paid at two-thirds of the employee’s regular rate if taken to care for a family member or to care for a child whose school has closed, or if the employee’s childcare provider is unavailable due to the coronavirus.
- Pay is capped at $511/day and $5,110 total for reasons 1, 2, and 3 described above.
- Pay is capped at $200/day and $2,000 total for reasons 4, 5, and 6 described above.
Interaction with Other Employer-Provided Paid Sick Leave and other Paid Leave:
This act does not preempt existing state and local paid sick leave requirements. Employers cannot require employees to use other leave first. Sick leave provided for under the act does not carry over from year to year, and the requirements expire December 31, 2020.
- Employers must post a model notice, which will be provided by the federal government.
Note: The act reserves the right for the secretary to exclude certain care providers and first responders from the list of eligible employees and to exempt small businesses with fewer than 50 employees from providing paid leave for child care if business viability is jeopardized.
Payroll Tax Credit
- Applies to both the emergency FMLA expansion and the emergency sick leave.
- Dollar for dollar credit for sick leave and paid FMLA wages against the employer portion of Social Security taxes.
- Refund is possible for amounts that exceed what is available as a credit.
- Limits on what can be claimed mirror the caps for what must be paid.
Health Plan Benefit Mandate
- The act requires all insured and self-funded medical plans, including grandfathered plans, to cover diagnostic testing-related services for COVID-19 at 100 percent without any deductibles or co-pays.
- Examples include services provided by doctors, emergency rooms, and urgent care centers leading up to the decision that testing is needed, along with the actual lab-based testing.
- The mandate does not apply to treatment.
Frequently Asked Questions:
Important note: These FAQs are based on initial review of the Families First Coronavirus Response Act, complex new legislation. As with any new legislation, members are encouraged to work with their own counsel in fully understanding their obligations. The following is both tentative and not intended to be a comprehensive summary of the bill.
Q: What new benefits does the legislation establish, and what triggers them?
A: The new legislation provides for two weeks of paid sick leave for employees who are unable to work or telework because they are subject to a COVID-19-related isolation order or recommendation from a health-care professional; are caring for such an individual; or are caring for children whose school or daycare is unavailable due to COVID-19 precautions. It also provides for up to 12 weeks of paid family leave for employees have been employed for at least 30 days, and who are unable to work or telework because they are caring for such children.
Q: What employers are covered?
A: The new requirements apply to employers with fewer than 500 employees. DOL has the authority to exempt employers with fewer than 50 employees, if the requirements would jeopardize the viability of the business as a going concern. (Employers under 25 employees are exempt from the obligation to return employees to their positions after they return from family leave, subject to a number of conditions and limitations beyond the scope of this FAQ.)
Q: What does the new paid sick leave benefit provide?
A: Full-time employees who qualify for the new paid sick leave benefit are entitled to 80 hours of paid sick leave; part-time employees are entitled to their average hours over a two-week period. Employees must be compensated at the higher of their regular rate of pay, the federal minimum wage, or the local minimum wage, capped at $511/day and $5,110 total for employees who are themselves quarantined or ill; or 2/3 of their regular rate, capped at $200/day and $2,000 total, for those caring for others. Employers may not require employees to use other available paid leave first.
Q: What does the new paid family leave benefit provide?
A: Employers are not required to pay the first 10 days of family leave, though employees may elect to use other available paid leave. After the first 10 days, employees must be compensated at 2/3 their regular rate, capped at $200/day and $2,000 total. For employees with irregular hours, the amount is based on the average hours over the past six months, or the employee’s reasonable expectations at the time of hiring for newer employees.
Q: What tax relief is available to employers who pay benefits under the new law?
A: Employers are entitled to a refundable credit against payroll taxes for benefits paid under the new requirements. As with any tax matter, there may be circumstance-specific ramifications or complexities, and businesses are highly encouraged to confer with their counsel or tax professional regarding the implcations of these tax credits to their particular situation.
Q: Does the bill provide any benefits to independent contractors?
A: Individuals who qualify as self-employed under the Internal Revenue Code and who would have been entitled to the paid sick or family leave benefits if they were an employee are allowed a refundable credit against self-employment taxes corresponding to those benefits.
Information posted 03.25.20