CARES Act and FFCRA Guidance for Employers
Earlier this month, Congress passed the Families First Coronavirus Response Act (FFCRA) to provide paid leave to qualified employees who need to miss work for specific reasons related to coronavirus. The FFCRA goes into effect on April 1 and expires December 31, 2020. Importantly, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, amended some of the FFCRA provisions and expanded unemployment benefits. This guidance is intended to help nonprofit and church employers understand these new leave and unemployment requirements.
The FFCRA and Important Updates within the CARES Act
The FFCRA itself includes two separate acts: the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA). Employees must have been employed at least 30 days to be eligible for leave under the EPSLA and EFMLEA, and the provisions of the Acts do not apply to employees of companies or nonprofits with over 500 employees. Small employers with less than 50 employees may seek an exemption if they can demonstrate providing the required leave would jeopardize their ability to continue to operate.
Emergency Paid Sick Leave Act
The EPSLA provides qualified workers two weeks of paid sick leave if they must miss work because they are ill; quarantined by order of the federal, state or local government; seeking a diagnosis or preventative care for coronavirus; or caring for a sick family member. Employers cannot require eligible employees to use any other leave prior to using the emergency paid sick leave.
The CARES Act clarifies the amount of pay qualifying employees are eligible to receive. Employers subject to the FFCRA are not required to pay more than $511 per day and $5,110 in the aggregate for each employee who takes leave because that employee is subject to a government quarantine or isolation order, has been advised by a healthcare provider to self-quarantine, or is seeking a medical coronavirus diagnosis. For employees taking leave because they are (1) caring for an individual experiencing symptoms of and seeking a diagnosis for coronavirus or otherwise subject to a government order or medical recommendation to quarantine or self-isolate, or (2) caring for a child whose school or childcare provider is inaccessible due to the coronavirus, employees are not required to pay more than $200 per day and $2,000 in the aggregate for their two weeks of eligible leave.
Emergency Family and Medical Leave Expansion Act
The EFMLEA expands the federal Family and Medical Leave Act to cover as a qualified reason for up to 12 weeks of paid leave an employee’s inability to work or telework in order to care for a son or daughter under the age of 18 because the child’s school or childcare provider is closed due to the public health emergency declared by the federal government and several state governments and local authorities.
In addition to the eligibility requirements stated above, the CARES Act amends the EFMLEA to include coverage for employees who were laid off on or after March 1, 2020, worked for the employer for at least 30 of the 60 calendar days before the layoff, and were rehired by the employer.
The first 10 days of leave taken under the EFMLEA may be unpaid, and the employee may use other available leave, such as vacation or PTO, during those first 10 days. After that 10-day period, employees taking EFMLEA leave will receive two-thirds of their regular rate of pay for the number of hours they would normally be scheduled to work for up to 12 weeks. The CARES Act clarifies that employers are not required to pay more than $200 per day and $10,000 in the aggregate for each eligible employee taking leave under the EFMLEA.
Employees returning from EFMLEA leave are entitled to reinstatement to the same or an equivalent position. In the event an employer has fewer than 25 employees, the employer must make reasonable efforts to provide the employee with the same or an equivalent position. Such obligation remains for up to one year after the emergency ends or 12 weeks after the leave begins, whichever is earlier.
The FFCRA provides that employers will be reimbursed within three months, in the form of a payroll tax credit, for the full amount paid to employees who take leave under the Act. If the amount employers pay for employee leave is greater than their payroll tax obligation, the government will send them a check for the remainder. Additionally, reimbursement also covers the employer’s contribution to health insurance premiums during the employee’s leave.
Expansion of Unemployment Benefits
One of the key provisions of the CARES Act is its significant increase in unemployment protections for employees who have lost or lose their job due to coronavirus-related reasons. The Act expands state unemployment benefits and creates new benefits as well.
Pandemic Unemployment Assistance Program
The CARES Act creates a temporary Pandemic Unemployment Assistance Program for individuals who cannot or become unable to work due to the coronavirus pandemic from January 27, 2020 through December 31, 2020. To be eligible for such unemployment assistance, individuals must: (1) be ineligible for or have already exhausted other available federal or state unemployment benefits and (2) certify they are capable and available to work but are unable or unavailable to work or telework for one of the following reasons:
- Diagnosis, experiencing symptoms, or seeking a diagnosis of COVID-19
- A household member has been diagnosed with COVID-19
- A family member for whom the individual provides care has been diagnosed with COVID-19
- A child for whom the individual has primary caregiving responsibility is unable to attend school because of COVID-19
- The individual’s place of work is inaccessible because of a quarantine or as a result of a healthcare provider’s advice to self-isolate
- The individual has become a household primary earner after the head of household died from COVID-19
- The individual has had to stop working as a direct result of COVID-19
- The individual’s place of work is closed as a direct result of COVID-19
This program is especially significant for employees of churches in states like Texas where churches are exempt from unemployment insurance requirements, which generally makes their employees ineligible for unemployment assistance in such states. Notably, this program also covers independent contractors, who are usually ineligible for unemployment benefits.
Assistance is available under the program for 39 weeks.
Expansion of State Benefits
The CARES Act also increases the amount of unemployment benefits individuals may receive. These increased benefits are available to all unemployed individuals, not just those who are eligible for benefits under the temporary Pandemic Unemployment Assistance Program.
Under the Act, each state may contract with the federal government for reimbursement of these expanded benefits. Each covered individual will be eligible to receive the amount they would have normally received under their state’s unemployment law, plus an additional $600 per week for up to four months. This eligibility begins the day after the state and federal government enter into a reimbursement agreement and continues through July 31, 2020. The Act also provides an additional 13 weeks of benefits until December 31, 2020 on top of what is typically provided under state law, which is usually around 26 weeks, where individuals have exhausted their state benefits and are actively seeking work.