The Families First Coronavirus Act (FFCA) was passed by U.S. Congress and signed by President Trump on March 18, 2020. The FFCA includes numerous sweeping measures that have been designed to help both families and businesses during the COVID-19 pandemic.

The Families First Coronavirus Act requires certain employers to provide employees with paid sick leave or extended family and medical leave for specified reasons related to COVID-19. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020. 

Emergency Paid Sick Leave

Duration of Emergency Paid Sick Leave

The FFCA provides that all employers that have less than 500 employees (including government employers) must provide Emergency Paid Sick Leave as follows:

• For full-time employees, employers must provide 80 hours of emergency paid sick leave
• For part-time employees, the employer must provide a pro-rated amount that is equal to the average of two weeks of work for the part-time employee.

Eligible Reasons for Emergency Paid Sick Leave

The FFCA’s Emergency Paid Sick Leave may be used by employees if they are unable to work (at their place of work or remotely) for one of the following reasons:

• The employee (or an individual that the employee is caring for) is subject to COVID-19 related quarantine by the federal, state, or local government. 
• The employee (or an individual that the employee is caring for) has been instructed to self-quarantine for COVID-19 reasons by a health care provider.
• The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
• The employee is caring for a child whose school or child-care provider is closed due to COVID-19 
• The employee is experiencing any other substantially similar condition, as specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury, and the Secretary of Labor. 

Amount of Emergency Paid Sick Leave

The payment amount for Emergency Paid Sick Leave will vary depending on the reason for leave and are as follows:

• If the leave is due to the employee being quarantined by government order, or in self-quarantine by the advice of a physician or if the employee is experiencing symptoms of COVID-19 and seeking a diagnosis, then the amount of leave is the rate at which the employee is normally paid for such time subject to a cap of $511 per day and $5110 in aggregate per employee. 
• If the leave is for any other reason (to care for someone else in quarantine or advised to self-quarantine, due to school/daycare closures or if the leave falls into the ‘substantially similar conditions’ category), then the amount of the leave is the rate at which the employee is normally paid for such time subject to a cap of $200 per day, and $2000 in aggregate per employee. 

Other Important Provisions

• The FFCA states that the emergency paid sick leave provisions go into effect ‘no later than 15 days after the law has been enacted’. 
• The expiration date of the emergency paid sick leave provisions is on December 31, 2020.
• Employers can’t require that employees use other paid leave prior to using emergency paid sick leave. 
• However, employees can choose to use other paid leave if they so choose.
• Employers of healthcare workers and emergency responders may elect to exempt such employees from the FFCA provisions.

FMLA Public Health Emergency Leave

The FFCA has added a ‘Public Health Emergency’ as a new qualifying reason for employees to receive paid FMLA leave. The emergency family and medical leave expansion act becomes effective no later than 15 days after becoming law and expires on December 31, 2020. 

What’s different from traditional FMLA?

There are significant differences in the provisions of the Act from the Family and Medical Leave Act (FMLA), and these include the following: 

• The law amends the Family and Medical Leave Act (FMLA) to provide up to 12 weeks of leave ‘because of a qualifying need related to a public health emergency’. 
• Prior to the Act, for employees to be eligible for FMLA they had to be employed for a year and have worked a minimum of 1250 hours, however, under the FMLA Public Health Emergency Leave, eligible employees only have to have been employed for at least 30 calendar days at the time of the request for leave. 
• The definition of ‘covered employers’ has also changed to now include all private employers with fewer than 500 employees. Under traditional FMLA small businesses (i.e., fewer than 50 employees) were excluded. 
• Qualified employees are entitled to paid leave. 

What is a Qualifying Need?

A qualifying need related to a public health emergency tends to arise when the employee is unable to work due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable because of an emergency with respect to COVID-19 declared by a federal, state or local authority. This amendment narrows the conditions precedent for taking leave. 

 When Are Employees Entitled to Paid Leave 

All employees are entitled to paid leave when working for businesses, and it is important that you know when the Act comes into effect. These include the following: 

• The first 10 days of leaves are unpaid, but an employee may elect to substitute accrued vacation leave, personal leave, or medical/sick leave, and employers are prohibited from requiring the substitution of paid leave. 
• If the leave for a qualifying need related to a public health emergency continues beyond 10 days, it must be paid. 
• The leave paid at a rate of two-thirds of employee’s regular rate of pay as determined under the Fair Labor Standards Act (FLSA) and is based on the number of hours the employee would normally have been scheduled to work. 
• For employees with varying work hours, a special formula is provided. In all cases, an employer need not pay an employee more than $200 per day and $10,000 in aggregate. 

Employees are Returned to Pre-Leave Status 

It’s important that businesses follow the law and reinstate their employees to their previous positions before they took the leave. These include the following: 

• Generally, employers with 25 or more employees must restore employees to their positions following their return from leave in the same manner as generally mandated by the FMLA. 
• Employers with less than 25 employees also must reinstate employees unless certain conditions are satisfied. 

The U.S. Department of Labor (DOL) May Issue Regulations to Provide Exclusions to Assist Small Businesses

The U.S. Department of Labor (DOL) will have the authority to issue regulations to exempt those businesses with fewer than 50 employees from having to provide emergency leave if doing so would jeopardize the viability of the business. In addition, an employer of an employee who is a healthcare provider or emergency responder may elect to exclude that employee from the leave provisions provided by the Act. 

Employer Tax Credit – Emergency Paid Sick Leave and FMLA PHE Leave

To help employers offset

the costs of emergency paid sick leave and FMLA public health emergency leave, the FFCA has created an employer tax credit. The credit for employers is against the employer’s share of social security taxes. 

Tax Credit for Emergency Paid Sick Leave 

• The tax credit corresponds to the amount paid out by the employer.
• It is subject to the same caps ($511 per day and $5110 in aggregate per employee for employee-related leave and $200 per day, and $2000 in aggregate per employee for others-related leave).

Tax Credit for FMLA Public Health Emergency Leave

• The tax credit corresponds to the amount paid out by the employer
• Subject to the same caps ($200 per day per employee and $10,000 in aggregate per employee). 

Protecting the Rights of Employees

If you’re an employee working for a business and have been affected by COVID-19, you may be eligible for compensation of your pay in some form. There are times when employees simply don’t have the time to choose between their health and the interests of the company that they are working for. This Act ensures that they are well-protected if they are forced to take time off.

Conclusion

The FFCA certainly places a heavy financial burden on small businesses that already cash strapped as a result of this pandemic.  Business owners are forced to lay out money to pay employees who are unable to work for a variety of reasons.  The tax credit will offset these costs, but it may be months before companies are reimbursed for these costs.  There are exemptions available to businesses unable to comply with this law.  If you need guidance regarding the FFCA, please call me directly on me cell phone at (732)759-5114.  I’d be happy to help.