Families First Coronavirus Response Act

On March 18 President Trump signed the Families First Coronavirus Response Act (FFCRA) and the law becomes effective on April 1. The new law has several components, two of which create new leave entitlements for workers affected by COVID-19. The leave requirements of the FFCRA will expire on December 31, 2020 (unless Congress extends them). This article summarizes parts of the FFCRA that directly impact employers.

Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act (EPSLA), a component of the FFCRA, requires employers with fewer than 500 employees to provide paid sick time to employees who are unable to work (or telework) due to a need for leave because the employee:

1. Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;

2. Has been advised by a health care provider to self-quarantine related to COVID-19;

3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;

4. Is caring for an individual subject to an order described in 1 (above) or self-quarantine as described in 2 (above);

5. Is caring for a child (under 18) of said employee, whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19;

6. 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.

Full-time employees are eligible for 80 hours of leave and part-time employees are eligible for the average number of hours they work over a two-week period. The leave must be paid at the employee’s regular rate of pay; however, the EPSLA includes caps on the amounts employers are required to pay. The caps differ depending on the reason for the leave.

Paid sick time under the FFCRA is in addition to any leave an employer already provides its employees. Employers cannot require employees to use company-provided leave benefits before using FFCRA benefits.

Emergency Family and Medical Leave Expansion Act

The Emergency Family and Medical Leave Expansion Act (FMLA Expansion Act), which is also part of the FFCRA, amends the Family and Medical Leave Act to provide leave for specific COVID-19-related reasons. The leave can be used when the employee is unable to work (or telework) because the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19. (Note: This is reason 5, above.) To be eligible, an employee must have worked for the employer for at least 30 calendar days.

FMLA leave is usually unpaid. However, under the FMLA Expansion Act only the first ten days are unpaid. Thereafter, the employer is required to pay the employee two-thirds of the employee’s regular pay up to $200 per day. If the number of hours worked varies from week to week, the employer should average the worker’s hours over the previous six months to determine the weekly number of hours for paid leave purposes.

There are some important differences between the Family and Medical Leave Act and the requirements specific to the FMLA Expansion Act. Leave under the FMLA Expansion Act does not include the requirement that a company employ 50 employees within a 75-mile radius. In other words, if your company has fewer than 500 employees, but is not covered by the FMLA, your employees are still entitled to the leave provided by the FMLA Expansion Act. Furthermore, for leave related to COVID-19, employees are eligible if they have worked for the employer for at least 30 calendar days (not the 12 months and 1,250 hours required to qualify for standard FMLA leave).

Tax Credits

To help employers pay for the law’s paid leave provisions, the FFCRA provides for tax credits. Subject to some caps and restrictions, employers are eligible for tax credits for paid sick and protected FLMA leave based on the type of leave and whether the leave is for the employee or the employee’s family member.

Expanded Unemployment Benefits

The Emergency Unemployment Insurance Stabilization and Access Act, also part of the FFCRA, is expected to provide additional money to the states to augment their unemployment funds. The law also relaxes eligibility requirements for claimants directly affected by COVID-19.

Coverage

The EPSLA and the FMLA Expansion Act apply to employers with fewer than 500 employees. However, in some circumstances, employers with fewer than 50 employees can claim exemption from the requirements of the FMLA Expansion Act. (For more information on the exemptions, see the DOL’s Q&A, linked below, especially Questions 58 and 59.)

The FFCRA was enacted pursuant to Congress’s authority under the commerce clause of the U.S. Constitution. Therefore, its mandatory leave provisions apply only to businesses engaged in commerce or any industry or activity affecting commerce. Courts and regulatory agencies have interpreted “affecting commerce” very broadly. Consequently, while some companies do not “affect commerce” and are not covered by the FFCRA’s leave provisions, most companies are.

An example of businesses that are not covered are retailers with a gross annual business volume of less than $500,000. (For shopping centers and office buildings the threshold is only $100,000 per year.)

Whether a non-retailer is covered by the FFCRA depends on the amount of goods or services provided by the employer out of state (“outflow”) or purchased by the employer from out of state (“inflow”). For non-retail businesses, the threshold amount is $50,000 or more.

For additional information from the U.S. DOL, including access to the required poster, go here.

For the U.S. DOL’s FFCRA Questions & Answers go here.