Employer Requirements Under the Families First Coronavirus Response Act
Updated April 1, 2020
The “Families First Coronavirus Response Act” (FFCRA) supports businesses with fewer than 500 employees and their workers affected by the COVID-19 disease outbreak. The FFCRA provides certain employees with emergency paid sick leave and/or partially paid public health emergency leave. To help pay for these paid leaves, affected employers are eligible for refundable credits toward their share of quarterly Social Security and Medicare taxes. The FFCA includes two major sections: Emergency Paid Sick Leave Act (EPSLA) and emergency Family and Medical Leave Extension Act (E-FMLA).
Employee Rights - FFCRA Poster
Paid Leave Requirements go into Effect April 1
Starting April 1, businesses with fewer than 500 employees will need to provide employees with paid time off for a variety of reasons relating to COVID-19. Under the Families First Coronavirus Response Act, eligible employers will need to provide two weeks of paid leave for workers who are quarantined (due to federal, state or local government order or advice of a health care provider) and/or experiencing COVID-19 symptoms and seeking a medical diagnosis. Eligible employers will also need to provide up to 10 weeks of paid leave for workers who need to care for children whose school or child care facilities are closed. Read more about the Department of Labor’s employer requirements here. Employers will have to post notice of these changes in a similar manner to other poster requirements. Businesses with fewer than 50 employees and those that produce medical products or COVID-19-related medical equipment may be eligible to receive exemptions from the paid leave requirements. Read more about exemptions here.
Emergency Paid Sick Leave Act (EPSLA)
The Emergency Paid Sick Leave Act requires employers with fewer than 500 employees to provide all employees (full or part-time) paid sick leave when employees are unable to work (or telework) because:
The Secretary of Labor may exempt small businesses with fewer than 50 employees when the imposition of such requirements would jeopardize the viability of the business. The Labor Department is expected to issue emergency guidance. ILMA will advise when it's available. Importantly, an employer may not require employees to utilize other paid sick time provisions prior to using the FFCRA paid sick leave, or require that they find a replacement worker. Paid sick leave must be provided in addition to other paid leave an employer provides.
- the employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
- the employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
- the employee is experiencing symptoms of COVID-19 and seeks a medical diagnosis;
- the employee is caring for an individual who is subject to an order described in No. 1 or has been advised to self-quarantine as in No. 2;
- the employee is caring for his or her child/children if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions; or,
- the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
The paid sick leave benefits are determined by whether the employee is full- or part-time. Full-time employees are entitled to 80 hours of paid sick leave (10 work days) and part-time employees are entitled to a number of hours equal to the number of hours that such employee works, on average, over a two-week period. For Nos. 1, 2 or 3 above, paid sick leave is calculated at the employee’s regular rate of pay, capped at $511 per day and $5,110 in the aggregate. For Nos. 4, 5 and 6 above, paid sick leave is calculated at two-thirds the employee’s regular rate of pay, capped at $200 per day and $2,000 in the aggregate. Employers are required to post in conspicuous places where notices to employees customarily are posted, a notice being prepared by the Labor Department. ILMA will advise when the notice is available. The FFCRA prohibits employers from retaliating against employees who use paid sick leave under the new law.
The paid sick leave benefit is effective from April 4, 2020 to December 31, 2020. Violations will be deemed as violations of the minimum wage requirements of the Fair Labor Standards Act (FLSA), subjecting an employer to the remedies under the FLSA, including liquidated damages and attorneys’ fees.
Emergency FMLA Extension Act (E-FMLA)
The E-FMLA temporarily overrides existing leave entitlements under the Family and Medical Leave Act (FMLA). Normally, the FMLA only applies to employers with more than 50 employees; however, the new law includes all employers with under 500 employees. The Secretary of Labor can exempt small businesses under 50 employees, if enforcing E-FMLA would jeopardize the business’s viability – however, regulations and procedure for doing so have not yet been published. The E-FMLA adds as a qualifying need an employee unable to work (or telework) to a care for a child under 18 if: (1) the school or place of care has been closed; or, (2) the child care provider of such child is unavailable, in each case due to a public health emergency. “Public health emergency” is defined as a declared emergency from the COVID-19 disease outbreak.
For this usage of the FMLA, after the first 10 days of unpaid leave (which an employee may elect to substitute for paid leave), employers must provide paid leave for the remaining FMLA period. Unlike other FMLA uses, an employee must be employed for at least 30 days when the leave is requested to be eligible. The new law does not provide more than 12 weeks of FMLA leave in a 12-month period for employees who were already eligible. Employees who have used some of their FMLA leave entitlement will only be eligible to use their remaining entitlement for the additional benefits. Under E-FMLA, paid leave must be provided in an amount that is not less than two-thirds of the employee’s regular rate of pay and the number of hours the employee would otherwise normally be scheduled to work. Benefits, however, are capped at $200 per day and $10,000 in the aggregate. For employees with varying schedules, the number of hours is equal to the average number of hours the employee was scheduled to work per day over the previous six months, calculated from the date when the employee takes such leave.
E-FMLA does not address the availability of intermittent leave or leave on a reduced work schedule for leave taken because of the current public health emergency. The Labor Department is expected to issue guidance. The FMLA’s job restoration requirements also apply to most leave under the E-FMLA. However, job restoration requirements do not apply for employers with fewer than 25 employees if following conditions are met:
- The employee takes leave for a public health emergency;
- The position held by the employee when the leave commenced does not exist because of economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a public health emergency during the period of leave;
- The employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held with equivalent benefits, pay and other terms and conditions of employment; and
- If such reasonable job restoration efforts fail, the employer makes reasonable efforts to contact the employee for one year following the earlier of the date on which the employee’s leave concludes or 12 weeks after the date on which the employee’s leave commences.
The expanded E-FMLA benefit expires on December 31, 2020.
Tax Credits for Paid Sick and Paid FMLA
The FFCRA provides refundable tax credits against the employer’s share of the quarterly Social Security and Medicare tax payments for payments made in each quarter for paid sick leave and paid FMLA taken under the new law. The amount of the tax credit is generally equal to 100 percent of the qualified sick leave wages and qualified family leave wages paid by the employer with respect to the calendar quarter, up to a per-employee cap of $511 per day for qualified sick leave wages and $200 per day for qualified family leave wages. Because of the refundable nature of the tax credit, if the aggregate amount of qualified sick leave wages and qualified family leave wages paid by the employer in a calendar quarter exceeds the employer’s portion of the quarterly Social Security tax payments payable with respect to all employees, the excess will be treated as an overpayment and will result in a refund for the employer.
Questions remain how these tax credits will be implemented, such as whether the credits will be reduced from tax deposits, the Form 941 process, or some other mechanism. Each presents cash-flow implications for employers. The Treasury Department will issue temporary regulations addressing the mechanics of the tax credits.
In addition to the FFCRA, many states are working on similar emergency legislation to enact expand their own paid sick leave or family and medical leave laws to cover COVID-19 related-issues. Some of these state laws may be in addition to the FFCRA’s new requirements.
ILMA will continue to monitor the rapidly developing employment-related changes and will provide updates as appropriate.