On April 2, 2020, in an effort to assist working families facing public health emergencies arising out of the COVID-19 pandemic, two temporary provisions for paid leave were made effective via the Families First Coronavirus Relief Act (FFCRA) – the Family Medical Leave Expansion Act (FMLEA) and the Emergency Paid Sick Leave Act (EPSLA). Not only do the new rules help keep employees on the payroll, but they also provide tax credits to employers with fewer than 500 employees that provide paid leave for COVID-19 related reasons in compliance with the FFCRA. For dentists and other health care providers, the new provisions did not have much of an impact until recently. So, what changed?
Dental offices, for example, were shut down before the new legislation was enacted; therefore, they did not have to comply with FMLEA or EPSLA provisions at that time. Once they reopened and their workforce was reinstated, their obligations under the FFCRA kicked in. Now that school has resumed, and the majority of students are still learning remotely, dentists and other health care providers are scrambling to understand and comply with their obligations to employees.
The FMLEA, or “leave pay,” provides eligible employees of covered employers with paid leave benefits if the employee is caring for his or her son or daughter whose school or place of care is closed, or whose child care provider is unavailable, for reasons related to COVID-19. To be eligible for leave pay benefits, an employee must have worked for a covered employer at least 30 day prior to taking designated leave and be unable to work their normal job in person or remotely. Employees that are able to telework, even at reduced hours, are not eligible for FMLEA pay; however, an employer can choose to pay an employee could be paid partial leave (based on the rules above) if they can telework but at a reduced schedule.
For eligible employees, the FMLEA requires covered employers to provide:
- Unpaid leave for the first 10 days. The employee may elect to use any existing accrued paid leave (vacation pay or accrued sick pay) during this period.
- On day 11 and continuing for up to 10 weeks, the employer must provide the employee with paid leave at two-thirds of the employee’s regular rate (up to a maximum of $200 per day or $10,000 in aggregate per employee).
- Part-time employees are entitled to be paid two-thirds of their regular rate based on the average number of hours worked per week over the past 6 months.
In addition to FMLEA, the EPSLA, or “sick pay” provision in the FFCRA, requires employers to provide employees with up to 80 hours of paid sick leave at two-thirds of the employees regular rate if they are unable to work due to having to care for their own child or children whose school has closed, or if a childcare provider is unavailable due to the coronavirus. This is the only circumstance in which an eligible employee can use both FMLEA and EPSLA, using the two weeks of sick pay followed by 10 weeks of FMLEA, for a total of 12 weeks paid leave at two-thirds of the employee’s regular rate.
The FMLEA and EPSLA paid leave are in addition to vacation, sick, and paid time off (PTO) benefits offered by employer. Both provisions expire on December 31, 2020 and cannot be carried over.
Employers with less than 50 employees may be exempt from the provisions of the FMLEA if they meet any of the following conditions:
- Complying with the FFCRA would result in the small business’ expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
Employers required to provide paid sick leave or FMLEA benefits will receive dollar-for-dollar credits, taken on the federal quarterly payroll tax returns each quarter. The credits will be based on payments that meet the sick pay and leave pay requirements, and are restricted to maximum daily amount limits.
Price Kong continues to follow all updates to the PPP, and will send updates as they happen. For additional information and updates, visit the Price Kong COVID-19 Resource Center.