Employment Aspects of Families First Coronavirus Response Act (FFCRA)
March 25, 2020
The Families First Coronavirus Response Act (FFCRA), signed into law on March 18, 2020 and effective April 1, 2020, actually contains multiple pieces of legislation affecting the rights and obligations of both employees and employers. When combined, these pieces of legislation are meant to provide paid leave to certain employees who are affected by the Coronavirus public health emergency and to provide tax credits to employers who are required to provide paid leave.
Specifically, the leave provisions of the FFCRA include the Emergency Paid Sick Leave Act, which provides up to 80 hours of paid sick leave beginning April 1, 2020, and the Emergency Family Medical Leave Act, which expands eligibility under the FMLA to provide up to an additional ten weeks of paid leave beyond the two weeks of paid sick leave for certain employees.
Read together, these parts of the FFCRA may provide up to 12 weeks of paid, job protected leave for certain eligible employees. The Act covers private employers with fewer than 500 employees (this is different than the usual FMLA application to employers with 50 or more employees) and certain public employers; however employers with fewer than 50 employees may seek exemption from compliance with the Act from the Secretary of Labor if compliance would jeopardize the viability of their business. Additionally, health care providers and emergency responders may be excluded at the election of their employers.
Emergency Paid Sick Leave Benefits
Beginning April 1, 2020, qualifying employees of covered employers shall immediately be eligible to be paid for 80 hours of leave under the Emergency Paid Sick Leave Act. Employees will be eligible for emergency paid sick leave if they are unable to work (or telework) for one or more of the following reasons:
- Employee is subject to federal, state, or local quarantine related to Coronavirus;
- Employee has been advised by a healthcare provider to self-quarantine due to Coronavirus;
- Employee is experiencing Coronavirus-related symptoms and is seeking medical diagnosis;
- Employee is caring for an individual who is subject to a federal, state, or local quarantine order or that individual has been advised to self-quarantine due to Coronavirus;
- Employee is caring for a child whose school or childcare facility has been closed or the child’s regular childcare provider is unavailable due to Coronavirus; or
- Employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and Secretary of Labor.
Eligible full-time employees will be entitled to 80 hours of paid sick time while part-time employees will be entitled to a number of hours equal to the number of hours that they work on average over a normal two-week period. Employees who are personally affected by Coronavirus (reasons 1-3 above) will be paid their normal wage, subject to a cap of $511 per day and a total of $5,110 over the 80 hour period. Employees unable to work due to caring for a child or due to the closure of the child’s school/daycare or the absence of a child’s regular childcare provider (reason 5 above) are capped at $200 per day and a total of $2,000 over the two week period. Additionally, employees caring for an individual subject to a federal, state, or local quarantine order or an individual who has been advised to self-quarantine due to Coronavirus, or employees experiencing other substantially similar conditions specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and Secretary of Labor (reasons 4 and 6 above) are to be paid at a rate of 2/3 of their regular pay, up to $200 per day.
Employers cannot require employees using emergency paid sick leave to find a replacement employee to cover for them while absent from work. Additionally, employers cannot require employees to use other leave already provided by the employer prior to using emergency paid sick leave under FFCRA. Employees using emergency paid sick leave cannot be discharged, disciplined, or otherwise discriminated against for using the leave. Any employer found to have violated these provisions will be subject to the penalties provided by the Fair Labor Standards Act (FLSA)
Emergency paid sick leave will cease beginning with the employee’s next scheduled shift immediately following the termination of his/her need for sick time. Eligibility for emergency paid sick leave will end on December 31, 2020.
Emergency Family Medical Leave Benefits
As mentioned above, the FFCRA also expanded the FMLA to provide for additional paid leave beyond emergency paid sick leave. This expansion does not provide for paid leave during the first ten days of leave, but these days can be covered by the Emergency Paid Sick Days Act mentioned above. After these first two weeks, certain employees shall be eligible for an additional ten weeks of paid FMLA leave.
Employees shall be eligible for this extended FMLA leave if they are unable to work or telework due to the need to care for a child whose school/daycare is closed, or because their normal childcare provider is unavailable, due to COVID-19. Additionally, in order to be eligible for this leave, employees must have been employed by their employer for at least 30 calendar days (this is different than the usual FMLA requirement that employees work for the employer at least a year).
Eligible employees shall be paid at a rate of 2/3 of their regular pay, up to a cap of $200 per day and $12,000 total over the ten week period following the initial 80 hours of emergency sick leave. Leave for eligible employees who do not work normal hours shall be calculated based on the average number of hours an employee is scheduled to work per day over the 6 month period ending on the date on which the employee begins the leave (including any hours for which the employee took leave during that 6 month period).
Employees using Emergency FMLA leave shall be entitled to be restored to their job after the conclusion of their leave. However, employers with fewer than 25 employees can deny an employee restoration to his/her position if:
- The employee took leave for public health crisis-related reasons;
- The position no longer exists due to economic conditions or other changes in the employer’s operating conditions that affect employment and were caused by the public health crisis;
- The employer makes reasonable efforts to restore the employee to an equivalent position but ultimately cannot do so; and
- The employer makes reasonable efforts to contact the employee if an equivalent position becomes available at a later date.
The period for which this is applicable is 1 year beginning on the earlier of the date on which the qualifying need for the public health emergency leave concludes or 12 weeks after the date on which the public health emergency leave begins.
Tax Credits for Employers
In order to ease the burden on covered employers who must provide the paid leave explained above, the FFCRA provides tax credits for each calendar quarter for impacted businesses and organizations.
FFCRA provides such employers with a refundable tax credit for 100 percent of the emergency paid sick leave and emergency paid FMLA leave paid by employers for each calendar quarter through December 31, 2020. These tax credits can be applied against the tax imposed for an employer’s Social Security and Railroad Retirement payroll taxes.
The amount of qualified emergency paid FMLA wages taken into account for the tax credits is limited to $200 per day per employee and capped at $10,000 per employee for all calendar quarters. If an employee is subject to quarantine or an isolation order, has been advised by a health care provider to self-quarantine, or is experiencing coronavirus symptoms and is seeking a medical diagnosis, the amount of qualified sick leave wages taken into account for the tax credits is capped at $511 per day per employee. If an employee is caring for another individual or child, or because they experience a substantially similar illness, the amount of qualified sick leave wages taken into account for the tax credits is capped at $200 per day per employee. Finally, for a calendar quarter, the total number of days that the employer can take into account for tax credit purposes with respect to a particular employee for that quarter may not exceed 10 days, less the number of days taken into account for that employee for all previous quarters. No credits will be allowed unless the employer maintains documentation required by the Secretary of Treasury.
Employers also may receive tax credits for contributions made to an employee’s health plan coverage while the employee is on paid sick leave or paid FMLA leave, as well as the amount of certain employer group health plan expenses that are properly allocated to the qualified emergency leave and sick leave wages.