What Credit Unions Need to Know to Comply With FMLA and Paid Sick Leave

The Families First Coronavirus Response Act takes effect on April 2, 2020 and will sunset on Dec. 31, 2020.

We want to provide some guidance on the Act that was signed on March 18 by President Trump and expands the family and medical leave act (FMLA) as well as guarantees up to two weeks of paid sick leave for certain U.S. workers. 

Both the paid FMLA and paid sick leave provisions apply only to private employers with fewer than 500 employees. However, the legislation does allow the U.S. Department of Labor to exempt small businesses with fewer than 50 employees when the requirement would jeopardize the viability of the business. (View the full Act here: HR 6201)

FMLA Expansion for COVID-19
The Act amends the FMLA to allow up to 12 weeks of emergency leave for an employee who is unable to work (or telework) in order to care for a child (under 18 years of age) if the child’s ordinary place of care, including school, is unavailable due to a public health emergency. The initial 10 days of leave are unpaid, but the employee may elect to use accrued paid sick leave and/or accrued vacation during this otherwise unpaid period. After this 10-day period, employees are entitled to receive up to two-thirds of their average earnings, with a daily cap of $200 and an overall per-employee cap of $10,000.

Paid Sick Leave for COVID-19
The Act also adds a paid sick leave obligation. Employers with fewer than 500 employees must immediately make available 80 hours of paid sick leave for full-time employees, or the equivalent of the average number of hours over two weeks for part time employees. Employees are covered for the following reasons:

• Ordered by the government to quarantine or isolate.
• Advised by a healthcare provider to self-quarantine due to COVID-19 concerns.
• Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
• Caring for an individual who is in quarantine or isolation.
• They are unable to work because their child’s (who is a minor) school or place of care has been closed due to COVID-19 precautions.
• The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor. (The precise meaning of this reason will be clarified by the Secretary of Health and Human Services)

Employer Tax Credit
Employers will be provided refundable tax credits against their employer portion of Social Security taxes for 100% of the qualified sick leave and family leave wages paid in accordance with the Act. If the sick leave and family wage leave paid by the employer exceeds the employer's Social Security tax obligation, the employer will receive a check for the difference from the government.