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The Families First Coronavirus Response Act: What Does it Mean for Employers?

The Families First Coronavirus Response Act has passed the House and is now making its way through the Senate. Here is what employers need to know.

On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act (the “FFCRA”) by a vote of 363-40. The FFCRA is a separate law from the $8.3 billion emergency coronavirus spending package that President Trump signed into law on March 6. While the FFCRA has not yet been enacted into law (and at least some technical revisions are expected), the substance of the final FFCRA is likely to closely mirror what is in the version passed by the House of Representatives.

An Overview of the Families First Coronavirus Response Act for Employers

As summarized by House Appropriations Committee Chairwoman Nita M. Lowey (D-NY), the purpose of the FFCRA is to provide support to families that might otherwise face significant financial strain as a result of the novel coronavirus (COVID-19) pandemic:

“Our top priority in this public health emergency must be providing support to the American people. . . . The [FFCRA] will help ensure the physical safety and financial security of our nation’s working families during this time of crisis. With this bill, we can provide paid leave, guarantee free testing, and enhance important benefits for children and families.”

To this end, the FFCRA bolsters a number of public welfare and financial assistance programs (i.e. by providing $500 million in additional funding to Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and an additional $400 million to the Emergency Food Assistance Program). However, it imposes a number of new burdens on employers as well.

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Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

You can read the House version of the Families First Coronavirus Response Act here and the House’s title-by-title summary of the FFCRA here.

If enacted into law, the FFCRA will establish various requirements for employers. This includes establishing a right to paid sick leave for coronavirus-related absences and enhancing the scope of the Family and Medical Leave Act (FMLA) with respect to COVID-19 diagnoses. Eligible employers will be able to claim a limited payroll tax credit if they comply with the FFCRA’s requirements.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

For employers, the key provisions of the FFCRA are as follows:

1. Mandatory Paid Sick Leave for COVID-19

The FFCRA establishes another new law titled the Emergency Paid Sick Leave Act (the “EPSLA”). Under the EPSLA, private companies with fewer than 500 employees are required to provide paid sick leave for the following reasons:

  • An employee chooses to self-isolate after being diagnosed with coronavirus;
  • An employee seeks a medical diagnosis or medical care due to experiencing symptoms of coronavirus;
  • An employee seeks to take time off from work in order to, “comply with a recommendation or order by a public official with jurisdiction or a healthcare provider on the basis that the physical presence of the employee on the job would jeopardize the health of others because of—(A) the exposure of the employee to coronavirus; or (B) exhibition of symptoms of coronavirus by the employee”;
  • An employee seeks time off in order to care for or assist a family member who satisfies any of the three listed above criteria; or,
  • An employee seeks time off to care for a child if the child’s, “school or place of care has been closed, or the child care provider of such child is unavailable, due to coronavirus.”

Under the EPSLA, all full-time employees are entitled to 80 hours of paid sick leave 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 2-week period.”

Crucially, the EPSLA provides that the paid time off made available to employees as required by the new law must be provided in addition to the paid time off that employers offer under ordinary circumstances. Employers cannot require employees to take their “ordinary” paid time off prior to taking sick leave under the EPSLA. The law also states that employers cannot change their paid-time-off policies once the EPSLA is enacted in an effort to limit the total paid sick leave to which their employees are entitled.

If the FFCRA is enacted, the paid sick leave provided for under the EPSLA will be available to all employees immediately regardless of their duration of employment. In order to fully comply with the EPSLA, companies with less than 500 employees must also post notice of employees’ rights at their places of business. The law states that the Secretary of Labor will provide a model notice within seven days of the law’s enactment.

Violations of the EPSLA will constitute violations of the minimum wage and wrongful termination provisions of the federal Fair Labor Standards Act, and will subject employers to penalties including fines, imprisonment, and injunctive relief (under 29 U.S.C. Section 216 and Section 217). There are special rules regarding plan and program contributions for employers that are parties to collective bargaining agreements.

Under the current version of the EPSLA, the statute’s paid sick leave provisions will expire at the end of 2020.

2. Emergency Expansion of the FMLA for COVID-19

The FFCRA also creates the Emergency Family and Medical Leave Expansion Act (the “FMLA Expansion Act”), which affords FMLA protection to employees in certain coronavirus-related circumstances. The FMLA Expansion Act applies to employees of companies with more than 500 employees who have been employed for a minimum of 30 days. Critically, this covers employers with fewer than 50 employees which would not ordinarily be subject to the FMLA’s requirements (the law provides that the Secretary of Labor has discretion to exempt small businesses with fewer than 50 employees when compliance would “jeopardize the viability of the business as a going concern”).

Under the FMLA Expansion Act, employees are entitled to job-protected leave consistent with the FMLA under the following circumstances (as abridged in the House’s title-by-title summary):

  • “To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus;
  • “To care for an at-risk family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; and
  • “To care for a child of an employee if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a coronavirus.”

The FMLA Expansion Act states that the first 14 days of leave taken under the act “may consist of unpaid leave.” However, employees also have the option to substitute accrued paid time off for unpaid leave during this time. After this initial 14-day period, employers must provide paid leave, with the amount of compensation paid being calculated as, “not less than two-thirds of an employee’s regular rate of pay,” and based on, “the number of hours the employee would otherwise be normally scheduled to work.”

Notably, the FMLA Expansion Act appears to potentially exclude teleworkers who are able to continue to work from home. Under the current legislative language, an employee is only eligible if he or she is “unable to . . . perform the functions of [his or her] position.” This interpretation would seem to make sense, as the law is only intended to protect employees who are unable to work as the result of a coronavirus diagnosis. However, if an employee is logistically able to work from home but is incapable of doing so as a result of his or her sickness, then the law’s protections would still apply.

The FMLA Expansion Act also includes job restoration provisions that deviate from the standard provisions of the FMLA, and it includes a possible exception for companies with fewer than 25 employees.

Similar to the EPSLA, in the current House version of the legislation, the FMLA Expansion Act sunsets on December 31, 2020.

3. Payroll Tax Credit for Employers that Comply with the FFCRA

The FFCRA provides a refundable payroll tax credit for employers that provide paid sick leave pursuant to the EPSLA and that comply with the two-thirds compensation provisions of the FMA Expansion Act. Companies can claim the limited credit on a quarterly basis, using it to offset their Social Security tax payment obligations.

With regard to paid sick leave, employers can claim up to $200 per employee per day for up to 10 days. This cap is increased to $511 per employee per day when the employee (as opposed to a qualifying family member) is diagnosed with coronavirus. With respect to the FMLA Expansion Act, the credit is also limited to $200 per employee per day, subject to a maximum aggregate credit of $10,000 per employee.

Is Your Company Prepared to Comply with the Families First Coronavirus Response Act?

As the Families First Coronavirus Response Act is expected to become law in substantially the form that received bipartisan approval in the House, employers nationwide must begin preparing to comply with the law’s requirements. At Oberheiden P.C., our federal compliance lawyers are prepared to provide fully assist companies in complying with the FFCRA. To speak with one of our senior attorneys about your company’s obligations in confidence, call 888-680-1745 or inquire online today.

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