What Employers Should Know About the New Families First Coronavirus Response Act

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (FFCRA), H.R. 6201, an emergency measure that directly imposes upon smaller employers both paid family leave and new paid sick leave obligations. After originating in the House late last week, the bill quickly passed both chambers of Congress and gained the White House’s approval. The measure will have a major impact on employers with fewer than 500 employees. Now that the legislation has been signed into law, its provisions become effective no later than 15 days after the Act is enacted and expire on December 31, 2020. Employers need to act swiftly to amend policies and train employees to ensure that employee leaves are administered in accordance with the new law.

Qualified Employers

  • The bill applies to employers with 500 or fewer employees.
  • The legislation provides a tax credit to small/medium businesses that provide benefits through the social security tax paid by employers.
  • Companies with 50 or fewer employees must provide required benefits, but can apply for a hardship waiver with respect to Paid Family Medical Leave benefits only.  They must still provide paid sick leave without any waiver.

Emergency Sick Leave

The emergency paid sick leave is available for employees who are unable to work (or telework) due to: (1) a governmental quarantine or isolation order related to COVID-19; (2) advice from a health care provider to self-quarantine due to concerns related to COVID-19; (3) the employee experiencing symptoms of coronavirus and seeking a medical diagnosis; (4) a need to care for or assist an individual who is subject to categories (1) or (2) above; (5) a need to care for a child whose school or place of childcare is closed or unavailable due to coronavirus; or (6) the employee is experiencing any other similar condition to be specified by the Secretary of Health and Human Services.

As to the Emergency Paid Sick Leave, it is important for employers to be aware of the following provisions:

  • Employers of employees who are health care providers or emergency responders may elect to exclude those employees from the emergency sick leave provisions.
  • Full-time employees are to receive 80 hours of sick leave, and part-time workers are granted leave equivalent to their average hours worked in a two-week period, with the sick leave in either instance being available for immediate use regardless of the employee’s tenure at the employer.
  • An employee may, but is not required to, first use any existing paid time off. Also paid sick time will not carry over from year to year.
  • Workers taking leave for themselves will have to be paid at least their normal wage or the applicable federal, state, or local minimum wage, whichever is greater. Workers taking time off to care for family members must be paid at two-thirds of the foregoing rate. Sick leave is capped at $511 per day and $5,110 in the aggregate for leave taken in categories (1) through (3) described above (i.e., on one’s own behalf), and capped at $200 per day and $2,000 in the aggregate for leave taken in categories (4) through (6).
  • Employers will be prohibited from (i) requiring workers to find replacements to cover their hours during time off; or (ii) discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer related to such.
  • Employers will have to post a notice containing information regarding the emergency sick leave provisions; the Labor Department is to create a model notice no later than 7 days after the Act is enacted.
  • The Department of Labor will be authorized to issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern”, and (iii) ensure consistency between the emergency sick leave provisions and emergency family leave provisions described below.
  • Workers under multiemployer collective bargaining agreements whose employers pay into pension plans will have access to paid emergency leave.
  • Wages required to be paid under the emergency sick leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.

Emergency Family Leave

Private-sector employers with fewer than 500 workers, along with governmental entities, will have to provide up to 12 weeks of FMLA leave for employees who have been on the job for at least 30 days, and who are unable to work or telework because they have to care for a minor child if the child’s school or place of care has been closed, or if the child care provider of that child is unavailable due to a coronavirus emergency. An employer of an employee who is a health care provider or an emergency responder may elect to exclude the employee from the emergency family leave provisions.

Employers should be aware of the following provisions of the Emergency Family Leave:

  • The first 10 days of leave can be unpaid (a worker could opt to use accrued vacation days or other available paid leave for those days). For subsequent days of leave, workers will receive a benefit from their employers equal to at least two-thirds of their normal pay rate. The paid leave is capped at $200 per day and $10,000 in the aggregate.
  • Generally, the employee on leave must be restored to his or her prior position; however, this requirement does not apply to employers with fewer than 25 employees if the position held by the employee on leave no longer exists due to economic conditions or other changes in the employer’s operating conditions caused by the coronavirus pandemic, and the employer makes reasonable efforts to restore the employee to an equivalent position.
  • Wages required to be paid under the emergency family leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.
  • The Department of Labor will be authorized to issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, and (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
  • Workers under multiemployer collective bargaining agreements whose employers pay into pension plans will have access to paid emergency leave.

The full text of the Act can be found here.

This alert was authored by Employment attorneys Troy Valdez and Rosan Agbajoh. The Coblentz Employment team will continue to monitor this legislation and provide necessary updates. For further information or questions, contact any of our Employment lawyers: Troy Valdez (tvaldez@coblentzlaw.com), Fred Alvarez (falvarez@coblentzlaw.com), Stephen Lanctot (slanctot@coblentzlaw.com), Erin Doyle (edoyle@coblentzlaw.com), Rosan Agbajoh (ragbajoh@coblentzlaw.com), Kenneth Nabity (knabity@coblentzlaw.com), Hannah Jones (hjones@coblentzlaw.com), and Crista Welch (cwelch@coblentzlaw.com).