On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the Act) into law. The Act requires employers to provide paid leave for some employees related to the coronavirus (COVID-19) pandemic, expands unemployment assistance, includes nutrition assistance, and increases resources for testing. The leave provisions of the Act take effect no later than 15 days after it is signed by the president.
Emergency Paid Sick Leave
- The Act requires employers to fund two weeks of paid sick leave for government workers and employees of companies with fewer than 500 employees. Leave must be made available to workers who:
- are symptomatic or are under an order or advice to quarantine or self-isolate,
- have to care for a family member under such an order or advice, or
- have a child whose school or child care provider or facility has closed or is unavailable due to the coronavirus.
- Paid-sick-leave benefits will be immediately available when the law takes effect and capped at $511 a day for a worker's own care and $200 a day when the employee is caring for someone else.
- This benefit will expire at the end of 2020.
- The Act indicates that future regulations issued by the Department of Labor (DOL) may exempt health care providers and small businesses with fewer than 50 employees from the paid-sick-leave requirement.
Emergency Family and Medical Leave Act
- The Act provides FMLA rights for some employees of companies with fewer than 500 employees, requiring employers to fund partially paid leave (a rate of two thirds an employee's regular pay) after 10 days when an employee is unable to work or telework due to school or child care closures related to the coronavirus.
- Workers who have been on a company’s payroll for at least 30 calendar days will be eligible for paid-family-leave benefits, which will be capped at $200 a day (or $10,000 total) and expire at the end of the year.
COVID-19 Testing Covered on Health Plans, Tax Credit for Employers, Advancing Funds for Small Businesses
- The Act provides funding for economic assistance and requires health plans to cover COVID-19 testing at no charge.
- A refundable tax credit for employers that provide paid leave benefits as required by the Act is also included.
- The U.S. Treasury is expected to use its regulatory authority to advance funds to some small businesses to cover the cost of providing paid sick leave.
Action Steps for Employers
- Review & Respond: Employers should review their paid-time-off practices immediately and make a plan for complying with the Act. Employers are likely to face unique circumstances that were not anticipated when they prepared their attendance and leave policies.
- Communicate: Employers must post a notice of employee rights related to the Act. The DOL will provide a model notice for employer use within seven days of the enactment of the Act. Our team at North Risk Partners will make you aware when the model notice is available.
Efforts are already underway to create a third, larger relief measure that could total $1 trillion. This third relief measure could include payments to small businesses, loan guarantees for industries like airlines and hotels, and a stimulus package for workers.
If you have questions related to this update, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.
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