Emergency family and medical leave of absence
What is emergency family and medical leave of absence?
Emergency family and medical leave of absence (FMLA) is an amendment to existing FMLA regulations to help employees during COVID-19.
Under the amended FMLA, businesses with under 500 employees are required to provide job-protected emergency FMLA leave for employees. Businesses with under 50 employees may be exempted by the Department of Labor from these requirements if the DOL decides that they would jeopardize their business.
Emergency FMLA can be used by employees who are unable to work (or telework) while caring for a child under 18 because the child’s school/place of care is closed or unavailable due to the COVID-19 public health emergency.
How should employers pay employees during FMLA?
First 10 days are unpaid
New employees qualify for emergency FMLA coverage after 30 days of employment. The first 10 working days taken off are unpaid. They may be covered with accrued paid time off, sick leave, or emergency paid sick leave.
Employees receive two-thirds of pay after 10 days unpaid
After the first 10 days, employers must pay employees two-thirds of their normal rate of pay up to $200 per day or the aggregate of $10,000. For employees with varying work hours, take the average number of hours they were scheduled to work in the six months prior to the start of their leave (or if a recent hire, then the reasonable average hours expected at the time of hire).
Employees who make more than the amounts listed above can be paid their full wages if the employer is able to cover these costs, but employers will only receive a tax credit up to those amounts.
What sort of job protection are employees entitled to?
As with traditional FMLA leave, this leave is job-protected and employees are generally entitled to return to their same or equivalent position. However, employers with less than 25 employees are exempt from this requirement if they can show that the position no longer exists due to economic conditions caused by COVID-19, and the employer took reasonable efforts to restore the employee to an equivalent position with equivalent compensation and benefits.
How does the employer tax credit work?
Businesses can receive tax credit for wages paid towards this benefit up to $200 per day and $10,000 total per employee over the course of the COVID-19 pandemic. In a given quarter, the maximum credit is $2,000 per employee. Credit is applied to an employer’s Social Security taxes (this reduces the federal tax payments Gusto makes on your behalf). Credit amounts that exceed social security liabilities will be refunded after the quarter ends.
What should I do now if an employee needs leave?
If you have an employee who needs emergency leave due to COVID-19, you are free to provide this benefit before the law goes into effect on April 2, 2020. Employers will be required to start providing this type of leave starting April 2, 2020.
Note that any emergency leave you provide before April 2, 2020 cannot later be used towards the tax credit or counted against the amount of leave you must provide. You’ll need to keep track of the first 10 days taken by each employee outside of Gusto. We’re working to provide support for emergency FMLA in Gusto ASAP. We’ll update this page when support for emergency FMLA is available in Gusto.