What Employers Need to Know About the Families First Coronavirus Response Act
Although no one can know for sure how long COVID-19 will continue to sicken Americans and disrupt the economy, it is likely that the virus will be part of our lives for some time.
In effort to ease the burden on employers and employees, Congress passed measures such as the Families First Coronavirus Response Act (the Act or FFCRA), which requires employers with fewer than 500 employees to provide paid leave for employees affected by COVID-19. The Act went into effect on April 1, 2020 and is currently set to expire on Dec. 31, 2020.
Both employees and employers benefit from the Act because the leave benefits paid by employers are 100% recoverable through payroll tax credits. This article explains what employers need to know about their employees' rights — and their own rights — under the FFCRA.
What Is Required Under the FFCRA?
The FFCRA has two parts, the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act:
Emergency Paid Sick Leave Act (EPSLA)
This part requires certain employers to provide up to 80 hours of paid sick leave to qualifying employees who need to take time off for acceptable reasons related to COVID-19. Acceptable reasons include:
- The employee or someone the employee cares for is subject to quarantine orders or has been advised by a health care provider to self-quarantine.
- The employee has COVID-19 symptoms and is getting treatment for those symptoms.
- The employee is caring for their child whose school or place of care is closed for reasons related to COVID-19.
Emergency Family and Medical Leave Expansion Act (EFMLEA)
This part expands the Family Medical Leave Act to require certain employers to provide qualifying employees with up to 10 weeks of paid and up to two weeks of unpaid emergency family and medical leave for parents who are caring for children whose school or child care is unavailable because of COVID-19.
Employers are required to allow an employee to use emergency paid sick leave as provided by the Act instead of first using other sick time or vacation time.
Is My Business Included Under the FFCRA?
The FFCRA applies to private employers with fewer than 500 employees at the time the leave would occur.
If you have fewer than 50 employees, it is possible for leave requests to be exempt from the portion of the Act that requires employers to allow parents to take paid leave when COVID-19 causes closure of schools or child care when permitting the leave "would jeopardize the viability of the business as a going concern."
The rule-making document put out by the Department of Labor has limited exceptions for certain employers that employ healthcare providers or emergency responders and some federal employers.
Which Employees Are Eligible for Leave Under the FFCRA?
Both full-time (employees working at least 40 hours per week) and part-time (employees working less than 40 hours per week) are eligible for paid leave benefits under the FFCRA. Read more about the legal definition of an employee here.
Emergency Paid Sick Leave
The EPSLA allows for up to 80 hours of emergency paid sick leave for any employee in quarantine, isolation, or showing symptoms of COVID-19 and seeking medical attention, no matter how long that employee has been employed. Employees can receive their full pay up to $511 per day in sick leave. Employers can choose to pay in excess of $511 per day but that amount will not be reimbursable.
Employees must have a note from their doctor or from a government official saying that they are required to self-quarantine or isolate.
The EPSLA allows for up to 80 hours of emergency paid sick leave for any employee caring for an individual who has COVID-19 or caring for their child whose school or child care is unavailable because of COVID-19, no matter how long that employee has been employed. Employees in this situation can receive up to two-thirds of their pay up to $200 per day. Employers can choose to pay in excess of $200 per day but that amount will not be reimbursable.
Emergency Family and Medical Leave
Employees who wish to use Emergency Medical Leave under the EFMLEA to care for a child under the age of 18 (or with a disability that limits self-care) because of COVID-19-related school or daycare closures must have been employed by the business for at least 30 days. These employees are eligible for two-thirds of their normal pay (up to $200 a day) for up to 12 weeks, but the first 10 days of leave are unpaid (though employees can use vacation or sick time during this period).
Requests to Use Leave Intermittently
Intermittent leave for employees working remotely is permissible under the FFCRA, but only if it is agreed upon by the employer and employee. The Act permits employees who qualify for emergency paid sick leave or emergency family and medical leave to work a shorted schedule of hours while teleworking so long as their employer agrees.
On-site employees are required to take emergency paid sick leave for qualifying reasons related to COVID-19 in full-day increments. Intermittent leave is only allowed for employees working on-site if the employer agrees and it is to care for a child whose school or daycare is unavailable because of COVID-19.
Do Jobs Have to be Restored Under the FFCRA?
The Act gives employees the right to get their positions back (or an equivalent position) upon returning from leave, similar to how employees are treated after returning to work from Family and Medical Leave Act (FMLA) leave.
However, unlike with FLMA leave, employees' positions are still subject to employment actions like layoffs, as long as the actions would still have taken place had the employee not been on leave.
Employers with fewer than 25 employees are also not required to provide job restoration if the following conditions are met:
- The employee took leave to care for a child whose school or child care was unavailable because of COVID-19;
- The position held by the employee "no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by a public health emergency (i.e., due to COVID-19 related reasons) during the period of the employee's leave";
- The employer made reasonable efforts to restore the employee's position; and
- The employer puts forth a reasonable effort to reach the employee if a position equivalent to the employee's former position opens within the following year.
How Are Payroll Tax Credits Claimed?
Perhaps the most pressing question on many employers' minds is how to get reimbursed for paid leave under the FFCRA? Payroll tax credits are claimed though federal employment tax reporting or by filing IRS Form 7200 – Advance Payment of Employer Credits to request an advance payment of employer credits due to COVID-19.
The key to receiving payroll tax credits is detailed and effective recordkeeping, including:
- Documentation showing how the employer determined how much paid leave under the FFCRA was paid to employees;
- Documentation showing how the employer determined the amount of qualified health plan expenses that were allocated to wages; and
- Copies of relevant tax forms that were submitted to the IRS, including completed IRS Form 7200 and Form 941.
Employers are required to keep documents and information related to FFCRA leave requests for four years after the request, regardless of whether the request was approved or denied. Even if only oral conversations take place regarding leave requests, it is up to the employer to document such discussions in writing.
When a business with fewer than 50 employees denies a request for emergency family medical leave requests to care for children whose school or daycare was unavailable because of COVID-19 based on the exception for small businesses, the employer must document how the business is exempt pursuant to the regulations.
Seek Help From an Employment Law Attorney
Even though the Act has been in effect since April 1, 2020, there is still a lot of confusion regarding the businesses it regulates and how it applies.
This article serves as an overview of the more than 120 pages of guidelines that were written on the Act by the Department of Labor. In order to avoid an employment lawsuit, and to make sure your business gets properly reimbursed by the IRS, it's important to consult with an employment law attorney in your area if you have questions or concerns.