The Families First Coronavirus Response Act

Last updated: March 27, 2020

Updates:
March 25: DOL releases FFCRA poster and FAQ
March 24: First DOL guidance issued.
March 20: FFCRA enacted into law.

Use the links below to navigate directly to a section of interest

TL;DR
Introduction to the FFCRA
Payment structure of the FFCRA
Emergency Paid Sick Leave Act
     Coverage / Eligibility
    Qualifying conditions
    Benefits
    Notice requirements
    Prohibited practices
Emergency Family and Medical Leave Act
    Coverage / Eligibility
    Exemption
    Benefits
    Job Protection
Guidance from the U.S. Department of Labor
Notes

This summary of the Families First Coronavirus Response Act (FFCRA), which became law on March 20, is intended to help employers understand their core obligations under these new laws. Additional guidelines and clarifications are likely to be issued by regulation and we will update you on these and other key developments regarding the interpretation and application of the FFCRA, as they become available. [Update: First DOL guidance issued on March 24. See below.]

Required lawyer disclaimer: This is not legal advice. (Duh.) If you would like to explore how the FFCRA applies to your business specifically, please contact us using the short form on the left side of this page. We are here to help you navigate this unprecedented, disruptive period.

TL;DR

Employers of fewer than 500 persons have substantial new paid sick leave and paid FMLA obligations to employees who are off work due to a COVID-19-related issue with themselves or their children. However, while the employer has to front the cost of these expenditures, the costs will be credited dollar-for-dollar against quarterly payroll taxes – and if the payments exceed payroll taxes, the employer will receive a refund.

Introduction to the FFCRA

The Families First Coronavirus Response Act was enacted to respond to immediate needs arising from the COVID-19 pandemic. It includes supplemental appropriations to a range of federal government agencies to support programs such as unemployment insurance, veterans’ health services, school lunches, and welfare programs.

The portions of the FFCRA of greatest interest to employers are the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.

goodcounsel clients have been asking whether the FFCRA can assist them in retaining and making payments to employees whose schedules have been cut back, and whose jobs may be in danger of being eliminated entirely, due to the pandemic and the resulting drop-off in economic activity. The answer, unfortunately, is that these programs are focused solely on providing temporary economic support for employees who must cease working directly as a result of a COVID-19 health-related issue that they or their children are experiencing. The FFCRA does not provide general economic assistance to employers. That assistance may yet come, but it was not part of this legislation.

Payment structure of the FFCRA

While the FFCRA mandates that employers make certain payments to employees, employers, in turn, receive a quarterly payroll tax credit equal to 100 percent of those payments. And if the tax credit to which the employer is entitled exceeds its payroll taxes in the quarter, the excess will be treated as an overpayment and refunded to the employer. Thus, while employers must lay out funds in the short term, these payments are effectively being made by the U.S. government.

Nevertheless, for small employers who believe that paying benefits under the FFCRA would be a hardship, exemptions may be available.

Emergency Paid Sick Leave Act

Coverage / Eligibility

The Emergency Paid Sick Leave Act (EPSLA) applies to all employers who employ fewer than 500 employees.

All employees, regardless of work schedule or tenure with the employer, are eligible for paid sick leave. An employer may not require an employee to exhaust other paid leave before using paid sick leave.

Qualifying conditions

The employer must provide paid sick leave to an employee who is:

  1. subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. advised by a health care provider to self-quarantine due to COVID-19 concerns;
  3. seeking a medical diagnosis for COVID-19 symptoms;
  4. caring for a person described in (1) or (2) above;
  5. caring for his or her child if the child’s school or place of care is closed or the child’s care provider is unavailable due to COVID-19 precautions; or
  6. experiencing any other condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

However, an employer may elect to exclude a health care worker or emergency responder from EPSLA benefits.

Benefits

The paid sick leave benefits to which an employee is entitled are determined as follows:

  • Full-time employees are entitled to paid sick leave at their regular rate of pay, for hours they would otherwise normally be scheduled to work, up to a maximum of 80 hours per employee.
  • Part-time employees are entitled to paid sick leave at their regular rate of pay, for hours they would otherwise normally be scheduled to work, up to a maximum number of hours for each employee equal to what he or she works on average over a two-week period.
  • If a part-time employee’s work schedule varies substantially from week to week, then for purposes both of calculating actual hours of sick pay and the employee’s two-week average, the employee will be deemed to have worked
    • the average number of hours that the employee was scheduled per day over the preceding 6-month period (including leave hours), and if the employee did not work for that period, then
    • the average number of hours per day that the employee reasonably expected to be scheduled to work at the time of his or her hiring.
  • Paid sick leave per employee is capped at $511 per day and $5,110 in total, however, if the leave is taken to care for others, the required compensation is two-thirds of employee’s regular rate of pay and is capped at $200 per day and $2,000 in total.

An employer can terminate paid sick leave once the employee’s COVID-19-related needs cease. Employers can also require employees to follow “reasonable notice procedures” to continue receiving sick pay.

Notice requirements

Within seven days after passage of the ESPLA (i.e., by March 27), the Secretary of Labor is to make available a model poster describing employee rights under that Act, which the employer must post at the work premises along with other required signage. We will link to this when it becomes available. (Of course, this is not particularly relevant for those businesses whose employees are currently teleworking due to the shelter-in-place order; good practice, in that case, might be to circulate a hyperlink of the sign to employees who are working remotely.)

Prohibited practices

It is unlawful for an employer to discharge, discipline, or discriminate against an employee for taking paid sick leave or filing a complaint under the FFCRA.

Emergency Family and Medical Leave Act

The Emergency Family and Medical Leave Act (EFMLA) expands the existing Family and Medical Leave Act. It applies to employers who had fewer than 500 employees on each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.

Coverage / Eligibility

Any employee who has worked for an employer for at least 30 days may take up to 12 weeks of job-protected leave when unable to work or telework due to the need to care for the employee’s child (under age 18) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency (which means an emergency with respect to COVID–19 declared by a Federal, State, or local authority).

Exemption

The Secretary of Labor may issue regulations under which employers with fewer than 50 employees may apply for an exemption if providing the leave required under EFMLA “would jeopardize the viability of their businesses as a going concern”; it is not yet clear if and when these regulations will be issued. These regulations may also exclude healthcare providers and emergency responders from taking EFMLA leave.

Benefits

The benefits to which an employee is entitled under the EFMLA are determined as follows:

  • The employer may require that the first 10 be unpaid leave, however the employer must provide paid leave thereafter. Employees may use any accrued PTO leave to cover some or all of the first 10-day unpaid period or may avail themselves of paid sick leave to the extent they qualify under the Emergency PLSA.
  • Full-time and part-time employees are entitled to receive at least two-thirds of their regular pay rate, for hours they would otherwise normally be scheduled to work, up to $200 per day or $10,000 in total per employee.
  • If the work schedule of an employee varies substantially from week to week, then for purposes both of calculating EFMLA benefits, the employee will be deemed to have worked
    • the average number of hours that the employee was scheduled per day over the preceding 6-month period (including leave hours), and if the employee did not work for that period, then
    • the average number of hours per day that the employee reasonably expected to be scheduled to work at the time of his or her hiring.

As a condition of receiving benefits, in any case where the necessity for leave is foreseeable, an employee must provide the employer with notice of leave that is practical under the circumstances.

Job Protection

The obligation of an employer under regular FMLA to restore the employee to his or her previous position at the end of the leave remains under EFMLA, however, employers with fewer than 25 employees need not restore an employee to his or her position if:

  • the employee’s position at the commencement of leave no longer exists due to economic conditions or other changes in the employer’s operating conditions that (1) affect employment and (2) are caused by the COVID-19 emergency during the leave period;
  • the employer makes reasonable efforts to restore the employee to an equivalent position; and 
  • the employer makes reasonable efforts to contact the employee if an equivalent position later becomes available, for a period of one year after the earlier of (1) end of the COVID-19 emergency or (2) the date that is 12 weeks after the date on which the employee’s leave commenced.

Guidance from the U.S. Department of Labor

The U.S. Department of Labor (DOL) Wage & Hour Division issued its first round of published guidance on March 24. It consists of three documents, a Fact Sheet for Employees, a Fact Sheet for Employers and Questions and Answers.

The Fact Sheet from Employers is a summary of the legislation, more or less the same as the information provided above. The Questions and Answers sheet helps address some of the finer technical points of calculating wages, time periods, and the like. We did not, however, see anything of significant substantive interest.

The DOL has now released its FFCRA poster (also available in Spanish) along with a related FAQ.

The main DOL COVID-19 resources page can be viewed here.

Notes

  • The FFCRA extends the same benefits to the self-employed as it does to the employer-employed. A self-employed person may take tax credits against individual taxable income.
  • Benefits paid under FFCRA are not subject to federal payroll taxes.
  • EFMLA does not provide for additional FMLA coverage. Thus, an employee’s EFLMA benefits are reduced to the extent that he or she has used regular FMLA leave.