Families First Coronavirus Response Act: What it Means for Employers

Updated: March 25, 2020

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”) into law. The FFCRA contains two main provisions that address employee leaves – the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) and the Emergency Paid Sick Leave Act (“EPSLA”).  Both of these provisions go into effect on April 1, 2020 and are expected to remain in place until December 31, 2020.  The provisions of the EFMLEA and EPSLA apply to employers with less than 500 employees.

The Emergency Family and Medical Leave Expansion Act (EFMLEA)

The Basics 

The EFMLEA expands the existing Family and Medical Leave Act (“FMLA”), but has several different provisions and requirements than the FMLA in response to the COVID-19 pandemic.  Under the EFMLEA, employers with less than 500 employees are required to provide up to twelve (12) weeks of job-protected leave to an employee who cannot work or telework due to the need to care for a child under the age of 18 when the child’s school or day care is closed or the child’s caregiver is unavailable due to the COVID-19 public health emergency.

Partially Paid Leave

Unlike the FMLA, the leave is partially paid.  While the first ten (10) days of the leave can be unpaid (subject to other paid leave availability and paid leave under EPSLA discussed below), thereafter, the leave is paid at a rate of 2/3 of the employee’s regular rate of pay, up to a cap of $200 per day, and $10,000.00 in total.  During the first ten days of unpaid leave, employees are permitted (but not required) to use available paid time off to cover some or all of the unpaid period.  Additionally, employees may also utilize the ten (10) days of paid sick leave under the EPSLA to obtain pay for the first 10 days of the EFMLEA leave, provided that the employee qualifies for leave under EPSLA.  Also unlike the FMLA, employees are eligible for this partially paid leave after working for their employer for thirty (30) days.

Job-Protected Leave

Similar to the FMLA, an employer is required to return the employee to his/her position following the end of the leave.  Employers with less than twenty-five (25) employees are exempted from this requirement, but only if the employee’s position no longer exists due to economic or operating conditions due to the COVID-19 health emergency and the employer makes reasonable efforts to restore the employee to an equivalent position with equivalent pay, benefits, and employment terms/conditions for a one-year period following the end of the leave.

Tax Credit

Employers can receive a refundable tax credit equal to 100% of the qualified family leave wages they pay for each calendar quarter pursuant to the EFMLEA. The tax credit is allowed against the employer portion of Social Security taxes.

The Emergency Paid Sick Leave Act (EPSLA)

The Basics

The EPSLA provides employees of employers with less than 500 employees up to ten (10) days of paid sick leave when the employee cannot work or work remotely for one of the following reasons:

1. The employee is subject to federal, state, or local quarantine or isolation order;
2. The employee has been advised by a health care provider to self-quarantine;
3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
4. The employee is caring for a person subject to a federal, state, or local quarantine or isolation order or who has been advised by a health care provider to self-quarantine;
5. The employee is caring for a son or daughter of the employee whose school or day care is closed or the childcare provider is unavailable due to the COVID-19 public health emergency;
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, the Secretary of the Treasury, and/or the Secretary of Labor.         

Paid Leave

Employers with less than 500 employees must provide full-time employees with up to eighty (80) hours of paid leave for a qualifying reason. A part-time employee’s leave entitlement is based on the number of hours the part-time employee works, on average, over a two-week period.  If the employee’s normal hours scheduled are unknown, or the part-time employee’s schedule varies, the employer should use a six-month average to calculate the average daily hours. Alternatively, if the employee has not worked for the employer for six months, the employer should use the number of hours the employer and employee agreed the employee would work upon being hired. Finally, if there is no such agreement, the employer should calculate the appropriate number of hours of leave based on the average hours worked per day the employee was scheduled to work over the entire time of his/her employment. The paid leave is to be paid at the employee’s regular rate of pay up to a limit of $511 per day and $5,110.00 in total for the employee’s own use of the leave (numbers 1-3 above).  The paid leave is to be paid at 2/3 the employee’s regular rate of pay up to a limit of $200 per day and $2,000.00 in total to care for others and for any other substantially similar condition (numbers 4-6 above).

Can Be Used In Conjunction With EFMLEA

Employees qualifying for both EFMLEA and EPSLA can use the paid leave under the EPSLA to cover the unpaid 10-day period under the EFMLEA, provided that the employee is eligible for both leaves.

Tax Credit

Employers can receive a refundable tax credit equal to 100% of the qualified sick leave wages they pay for each calendar quarter pursuant to the EPSLA. The tax credit is allowed against the employer portion of Social Security taxes.

Please keep in mind that many details, such as how need for the leave will be documented and possible exemptions via regulations for certain health care workers and small businesses, as well as other matters, have not been finalized.  Expect that additional nuances and clarifications will be forthcoming in the days and weeks ahead.

“Although a previous version of this client alert reported that the effective date was April 2, 2020, which was based on the statute providing that it would go into effect not later than fifteen (15) days following the enactment of the FFCRA,  the United States Department of Labor (DOL) has since announced that the statute will become effective April 1, 2020.  However, on March 24, 2020, the DOL issued a Non-Enforcement Bulletin, indicating that it would not seek an enforcement action against employers who do not comply through April 17, 2020, as long as the employer acts “reasonably” and in “good faith.”

Rina Russo is a partner at Walter Haverfield who focuses her practice on labor and employment law. She can be reached at rrusso@walterhav.com or at 216-928-2928.