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What is FMLA and How Does it Affect My Business Now?

april 09, 2020 | small business
Happy family with two kids

Protecting Your Employees During Coronavirus 

Business and economic concerns during the coronavirus outbreak have been secondary to taking care of our families’ health and our own wellbeing. Those fortunate enough to keep their jobs are left to figure out what leave they can take. In turn, employers are scrambling to determine how to pay for the allotted paid leave if a significant part of their workforce is off dealing with the virus. Millions out of work are wondering how they can pay their bills with no jobs to be had and questioning if it’s even safe to go to. It’s an unprecedented challenge for families everywhere, so below are the answers to the biggest concerns and questions about new leave policies and unemployment benefits. 
 

Frequently Asked FMLA Questions Amid Coronavirus:

  1. FAMILY MEDICA LEAVE ACT PRIOR TO CORONAVIRUS
  2. FAMILIES FIRST CORONAVIRUS RESPONSE ACT 
  3. EMPLOYEE PAY
  4. REIMBURSEMENT
  5. UNEMPLOYMENT INSURANCE

Family Medical Leave Act Before Coronavirus

Since its passage in 1993, the Family Medical Leave Act has enabled employees to take needed time off to care for their families.
 

What does FMLA cover? 

Under the FMLA, qualified employees are entitled to up to twelve weeks of unpaid leave for:

  • Childbirth and care for a newborn child within the first year of birth;
  • Adopting or fostering a child and caring for that child within the first year of placement;
  • Caring for a spouse, child, or parent with a serious illness;
  • A serious health condition that leaves an employee unable to work; and
  • Any urgent need created by having a family member in the military on “covered active duty”.
     

The FMLA also permits employees to take up to twenty-six weeks of leave to care for a child, parent, spouse, or next of kin who is an ill or injured service member.  

The Families First Coronavirus Response Act (FFCRA) expands the provisions and benefits of the FMLA for the period of our current crisis; employees can now take twelve weeks of partially paid leave.  
 

Who has to comply with FMLA? 

The FMLA applies to private-sector employers with fifty or more employees for a period of twenty or more workweeks in the prior calendar year, as well as public agencies plus public and private schools. Employers with under fifty employees are not required to abide by the FMLA, though they can put their own leave policies in place if they so choose.
 

Who are eligible employees? 

To be eligible under the standard terms of the FMLA, employees need to work for an employer covered by the FMLA for 1,250 hours during a twelve-month period. According to the Department of Labor guidelines, these twelve months do not have to be consecutive to qualify.

Under the FFCRA, the requirement for eligibility has been lessened to just thirty days of employment, and those who were terminated on or after March 1, 2020, who would otherwise meet the requirement are still eligible.   
 

Families First Coronavirus Response Act (FFCRA) 

The Families First Coronavirus Response Act provides expanded sick and medical leave for those dealing with the coronavirus crisis.
 

When was the act passed and effective? What is the intention of the law? 

The FFCRA was passed by the Senate on March 18, 2020, and signed into law on the same day. It took effect on April 2nd and will remain in effect until December 31, 2020. The purpose of the measure is to help families affected by the coronavirus and the resulting shutdowns by providing expanded sick leave and medical leave. Specifically, all those with the illness, or having to care for those who are ill or children without school or daycare, can take the necessary time off from work without entirely giving up a paycheck.
 

What businesses are exempt? 

While the Emergency Family and Medical Leave Expansion Act (EMFLEA) and the Emergency Paid Sick Leave Act (EPSLA) expand who is covered under sick leave and medical leave, there are exemptions. Employers with less than fifty employees can request an exemption, and private-sector employers with more than 500 employees are exempt. Employees classified as health care providers and emergency responders are also exempted.
 

How do I determine which employees are covered/eligible? 

Under the new guidelines of the FFCRA, employees working for your company for a period of thirty days or more are eligible to take sick leave and medical leave, provided that your company isn’t exempted as one with under fifty or over 500 employees or as being health care providers or emergency responders. Remember that companies with under fifty employees must apply for their exemption.
 

What are the extended benefits?

Under the guidelines set forth by the FFCRA and implemented by the Department of Labor, employees are entitled to two weeks of paid sick leave at full pay if the employee is quarantined due to COVID-19 or is experiencing COVID-19 symptoms. Employees can take up to twelve weeks of leave at two-thirds pay if they need to care for a family member who is ill or quarantined, or for a child or children that are without daycare due to a coronavirus-related shutdown.
 

Where do I post the notice? 

Employers are required to have posted this notice in a conspicuous place on their premises by April, per DoL guidance, but given that many offices are closed and employees are working remotely, employers can meet the requirement for notice by emailing or mailing the poster to employees, or posting it to an internal or external website for employee information.
 

Employee Pay

With new legislation now in place, employees can take paid sick and medical leave to care for their own health or that of a family member.
 

Under what circumstances do I need to pay sick leave? 

Under the FFCRA, qualified employees are eligible for paid sick leave if they’re unable to work or telework due to:

  • A quarantine order from local, state, or federal government;
  • Advice from a doctor to self-quarantine;
  • Seeking a medical diagnosis for COVID-19 symptoms;
  • Caring for someone in self-quarantine; or
  • Caring for a child without school or other daycare because of shutdowns.
     

How do I calculate what to pay employees? Are there pay caps? 

Full-time employees taking sick leave due to either coronavirus symptoms or a government-mandated or doctor-recommended quarantine are eligible for their regular pay rate for a period of two work weeks (or eighty hours), which is capped at $511 per day and $5,110 in total. For employees taking leave to care for someone in self-quarantine or children home from school or daycare, pay is set at two-thirds of their regular rate and limited to $200 a day and $12,000 total for a twelve-week leave period.
 

How do I handle part-time and variable hour employees? 

Employees that work less than full time are eligible for leave commensurate with the average amount of hours they work over a two-week period; an employee that typically works twenty-five hours over two weeks would be entitled to twenty-five hours of leave.
 

Reimbursement 

The CARES Act waives the requirement for a business to have been in operation for one year to qualify for the SBA assistance.  Absent a tax return, the SBA would ask for the latest or year-end profit-and-loss statement and balance sheet. 
 

Will I receive reimbursement for paid leave under this act? 

Small and midsize employers that offer paid sick leave and paid medical leave during this period will be eligible for 100% reimbursement through a tax credit announced by the Treasury Department, Department of Labor, and the Internal Revenue Service. As implemented, employers will be able to keep an amount of normally paid taxes: income, and social security and medicare, equal to the amount of paid leave for that period, rather than sending those taxes to the IRS. If the amount of withheld taxes is less than the paid leave, employers can request an accelerated payment from the IRS for the difference, which should be processed in two weeks or less.
 

Will this affect my current tax credit or tax return? 

Employers that take advantage of the new tax credit under the FFCRA are not eligible to claim other tax credits for leave wages.  

Unemployment Insurance

Expanded unemployment benefits are aimed to help those now out of work due to the virus through a period of what may be extended joblessness. 
 

What is the Emergency Unemployment Insurance Stabilization and Access Act of 2020, and how does it affect unemployment? 

As part of the CARES Act, the Emergency Unemployment Insurance Stabilization and Access Act of 2020 provides more money to states for their unemployment insurance programs; eliminates the standard one-week waiting time; and expands both the eligibility and duration of existing unemployment benefits. Those applying for unemployment would get up to an extra $600 a week in addition to their state benefits, as well as a stipulated 39 weeks of eligibility regardless of what limits are currently in place in their state. Eligibility for unemployment benefits is also expanded to those who would not typically qualify but have been put out of work by the coronavirus, including gig workers and independent contractors.
 

How does that affect my employees? What layoff and staffing considerations do I need to take into account?

If you’ve had to lay off or furlough employees due to the coronavirus, document the reason in a letter to assist with the unemployment process and offer employees information on how to apply for unemployment benefits. It should be noted that, as always,  layoffs should be conducted in a way that is fair and non-discriminatory to avoid running afoul of anti-discrimination laws.  

Figuring out new leave policies, tax credits, and unemployment benefits is an unneeded challenge during this crisis when most business owners are trying to manage their family’s health or finances. Talking with a LegalShield attorney to answer pressing questions for your small business can give you the peace of mind you need in these challenging times. 

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