Includes new paid FMLA and sick leave mandates
Posted by Robert Davis on April 2, 2020.
On March 18 President Trump signed into law H.R 6201 (“The Families First Coronavirus Response Act”), a bipartisan bill that includes temporary paid family and sick leave mandates for government employers and private employers with fewer than 500 employees. Additionally, the bill imposes new requirements for group health plans to provide coverage for COVID-19 diagnostic testing without any cost-sharing requirements.
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The bill requires all group health plans (including self-insured plans) to provide coverage for COVID-19 diagnostic testing at no cost to the participant. The requirement includes coverage for the cost of a provider, urgent care center, or emergency room visit in order to receive testing. This mandate is effective immediately, and will continue until the end of the current public health emergency as declared by the Secretary of Health and Human Services.
Note that this requirement would extend to high-deductible health plans (HDHPs) as well, which generally may not provide below-the-deductible coverage for diagnostic testing. However, the IRS recently issued Notice 2020-15 to clarify that HDHPs may provide first-dollar coverage for medical care services and items purchased related to testing for and treatment of COVID-19.
Emergency Family and Medical Leave Expansion Act
The bill creates special FMLA rights for certain employees of private employers with fewer than 500 employees and certain government employers. Specifically, eligible employees will be entitled to up to 12-weeks of job-protected FMLA leave if unable to work (or telework) because a child’s school or place of business is closed, or its childcare provider is otherwise unavailable, due to a public health emergency. For this purpose,
The first ten days of qualifying leave may be unpaid, and the employee may substitute accrued PTO or other leave during this period. After that, eligible employees will be paid at a rate of no less than two-thirds their normal pay up to a maximum of $200 per day and $10,000 in the aggregate.
Note that this paid leave requirement applies only with respect to this special coronavirus-related FMLA leave. All other types of FMLA leave do not have to be paid (although an employer can
To offset the cost to employers, the bill also creates a refundable payroll tax credit equal to 100% of qualified family leave wages, up to a per employee cap of $200 per day and $10,000 for all calendar quarters. The credit is against the employer’s portion of Social Security taxes. Employers may not also take a deduction for wages used to claim the credit.
The new leave requirements and the related tax credits are effective on April 1, 2020 and will sunset after December 31, 2020.
Emergency Paid Sick Leave Act
The bill requires certain government employers and private employers with fewer than 500 employees (“covered employers”) to provide two weeks of fully paid sick leave for certain specific coronavirus-related purposes.
Like the Emergency Medical and Family Leave provisions discussed above, the bill creates a refundable payroll tax credit to help offset the employer’s costs.
The new sick leave requirements and the related tax credits are effective on April 1, 2020 and will sunset after December 31, 2020.
Guidance on Determining if an Employer has fewer than 500 employees
The Department of Labor has issued a set of frequently asked questions that help clarify the rules for determining if an employer has fewer than 500 employees.
According to the FAQs, a corporation typically is considered a single employer and each of its employees – across all separate establishments or divisions – will be counted towards the 500-employee threshold.
If a corporation owns another corporation, the two corporations are separate employers unless they are joint employers under the Fair Labor Standards Act (FLSA) with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted.
In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted.
For additional information, please contact Robert Davis (firstname.lastname@example.org).
Robert Davis is a managing director in Deloitte Consulting LLP and leads the Washington Rewards Policy Center of Excellence, dedicated to informing practitioners and clients about legislative and regulatory developments relating to employer-sponsored rewards programs.
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Date/time: 4th April 2020, 00:02
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