Allen & Gooch Blog

Employment Law & Litigation

COVID-19 Resources for Small Businesses – Family First Coronavirus Response Act

What does your Business Need to Know about the Family First Coronavirus Response Act?

Family First Coronavirus Response Act (H.R. 6201) passed late yesterday related to paid leave policies for employers.  The law will take effect on April 2, 2020 and remain effective until December 31, 2020.  There are certain key employment provisions that employers will need to implement in their employee policies. The law contains two provisions to provide paid leave to employees forced to miss work because of the COVID-19 outbreak: a new federal paid sick leave law and an emergency expansion of the Family Medical Leave Act (FMLA).

Emergency Paid Sick Leave

  1. Who does the law apply to?

    • Employers with fewer than 500 employees
  2. What paid leave is required of employers?

    • The law provides full-time employees with up to 80 hours of paid leave and part-time employees with a number of hours that would equal the hours that such employee works over a 2-week period.
    • Employers are to pay the employee their full salary based on their regular rate of pay (as defined by the Fair Labor Standards Act).
  3. When is the employee entitled to the paid leave?

    • Employees may use emergency paid sick leave (i) to self-isolate due to a Coronavirus diagnosis, (ii) to obtain medical care for Coronavirus symptoms, or (iii) to comply with a recommendation or order to quarantine due to exposure to, or symptoms of, the Coronavirus.
  4. What if an employee needs to take leave for a family member?

    • Family Member: (i) an employee’s parent, spouse, and son or daughter under the age of 18, as well as (ii) pregnant women, senior citizens, and individuals with disabilities or access or functional needs who are also either the employee’s son or daughter, next of kin, grandparent or grandchild, or for whom the employee is their next of kin.
    • Employees may use emergency paid sick leave (i) to care for a family member who has or is experiencing Coronavirus-related symptoms or who is under quarantine by a public health official or health care provider, or (ii) to care for their child whose school or child care provider is closed or unavailable due to Coronavirus.
      • Employers are only required to pay at least two-thirds of the employee’s salary during such leave period.
  5. How does this impact an employer’s existing policy?

    • Paid sick leave provided by this law is in addition to existing paid leave policies.
    • Employers are prohibited from changing their existing leave policy to avoid this new requirement, and would also be required to post a notice regarding employee’s rights under the law (a model notice will be made available for this purpose).
  6. Caps on Paid Leave

    • If employee takes leave for his/her own COVID-19 illness or quarantine, then the employee can get a maximum of $511 per day or $5,110 in the aggregate for the entire two-week period.
    • If the employee is caring for a family member because of COVID-19 exposure or a child because of school or day care closure, then the employee can receive up to $200 per day or $2,000 in the aggregate for the entire two-week period.

Emergency Family and Medical Leave Expansion Act

The law amends the Family and Medical Leave Act to provide additional coverage for public health emergency leave to eligible employees. Eligible employees would be able to take up to 12 weeks of FMLA leave for a qualifying need related to a public health emergency, including:

  • to comply with a recommendation or order by a public official or health care provider that the employee remain out of work because of (i) exposure of the employee to Coronavirus, or (ii) the employee exhibits symptoms of Coronavirus (where the employee is otherwise unable to comply with the recommendation/order and perform the functions of their role);
  • to care for a family member whose presence in the community, as determined by a public health official or a health care provider, would jeopardize the community’s health; and
  • to care for the employee’s child, if the child’s school or care provider is closed or unavailable due to a public health emergency.
  1. What portion of the leave is required to be paid?

    • 2 weeks of unpaid leave (employer can substitute accrued paid leave, but employer cannot require an employee to use any additional leave provided by the employer instead of or before the leave provided under the Act)

    • 10 weeks of paid leave

      • Paid Leave: 2/3 of an employee’s regular rate of pay multiplied by the number of hours the employee normally would be scheduled to work
      • Cap on Amount of Paid Leave: $200 per day or $10,000 in the aggregate for the 10 weeks of paid leave
  2. Who does the law apply to?

    • Employers with fewer than 500 employees
  3. How does the law define family member?

    • Family Member: (i) an employee’s parent, spouse, and son or daughter under the age of 18, as well as (ii) pregnant women, senior citizens, and individuals with disabilities or access or functional needs who are also either the employee’s son or daughter, next of kin, grandparent or grandchild, or for whom the employee is their next of kin.
  4. How else does the law change the FMLA requirements?

    • Employees must be employed for at least 30 calendar days (as opposed to the eligibility criteria typically applicable under the FMLA, which requires that employees be employed for at least 12 months).
    • For employers with fewer than twenty-five employees, the reinstatement requirements are modified.

What about the Employer’s Business?

Employers may be concerned about being able to provide this additional benefit to employees and the financial burden on the business in an uncertain time.  Employers should consider the following options for the benefit of their business and their employees.

  1. Secretary of Labor can exempt employers with fewer than 50 employees from both leave provisions of the Act if the employer can show that the leave would jeopardize the viability of the business.
  2. Tax Credits to Employers: The employer will get a tax credit equal to 100 percent of the qualified sick leave or qualified family leave wages paid by such employer in each calendar quarter. The credit can only be as high as the employer’s payroll taxes for that quarter; however, any qualifying amounts paid to employees as leave in excess of the payroll taxes owed will be treated as an overpayment that shall be refunded to the employer.
  3. SBA Loans: SBA is offering low or zero interest rate loans that can help some employers, depending on their circumstances.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.