Key Takeaways For Employers From the Families First Coronavirus Response Act

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”) into law in response to the public health emergency caused by COVID-19.  This is a sweeping legislation that has an immediate impact on millions of employees and employers.  The FFCRA is divided into eight sections (Divisions A through H), and this bulletin highlights the three Divisions that most impact employers: the Emergency Family and Medical Leave Expansion Act; the Emergency Paid Sick Leave Act; and the Tax Credits for Paid Sick and Paid Family and Medical Leave.

Division C – Emergency Family and Medical Leave Expansion Act

The Emergency Family and Medical Leave Expansion Act (“EFMLEA”), dramatically expands the scope of the Family Medical Leave Act (“FMLA”) to address the novel issues taking place as a result of COVID-19.

This section of the FFCRA goes into effect “not later than 15 days after the date of enactment of this Act,” or April 2, 2020.

The EFMLEA Adds Another Qualifying Condition To The Existing FMLA Statute

Under the current FMLA, there are five conditions (listed below) under which an employee can qualify for FMLA leave:

  1. Because of the birth of a son or daughter of the employee and in order to care for such son or daughter.
  2. Because of the placement of a son or daughter with the employee for adoption or foster care.
  3. In order to care for the spouse, or a son, daughter, or parent, of the employee, if such spouse, son, daughter, or parent has a serious health condition.
  4. Because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.
  5. Because of any qualifying exigency (as the Secretary shall, by regulation, determine) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces.

The EFMLEA adds a sixth condition that will only be in place until the end of 2020:

  1. During the period beginning on the date the [EFMLEA] takes effect, and ending on December 31, 2020, because of a qualifying need related to a public health emergency (defined as “an emergency with respect to COVID-19 declared by a Federal, State or local authority”).

The remainder of the EFMLEA addresses the specific provisions of this new qualifying condition: Which employers are covered? Which employees qualify? To what benefits are those eligible employees entitled?

The EFMLEA Broadens the Definition of Employer With Respect to COVID-19-Related Leave.

The EFMLEA greatly expands the definition of “employer.” Under the FMLA, only employers with 50 or more employees are covered.  However, under the EFMLEA, all employers who employ fewer than 500 employees are covered.  This means that all employers who are ordinarily not subject to the FMLA are required (subject to limited exceptions) to provide such leave under the COVID-19-related circumstances outlined in the legislation.

The EFMLEA Loosens Eligibility Requirements, Thereby Making More Employees Eligible For Benefits.

Ordinarily, for an employee to have access to FMLA leave, the employee must work for a covered employer (i.e., more than 50 employees), and have worked 1,250 hours during the twelve months prior to the start of leave.  Under the EFMLEA, however, an employee only needs to have been employed for more than 30 days prior to taking leave.

The EFMLEA Creates a New Entitlement For Leave To Support Employees Whose Children’s Schools Close Due to COVID-19.

The EFMLEA allows eligible employees to take up to twelve weeks of leave where an employee is unable to work, including telework, due to a need for leave to care for the employee’s child (under the age of 18) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.

This particular childcare-related circumstance is the only “qualifying need” available under the EFMLEA.  This is a departure from the prior version of the bill, which contained several other COVID-19-related reasons to provide EFMLEA.

Leave Under This Act Must be Paid.

The FMLA only requires unpaid leave, with employees having the option to use accrued paid leave (e.g., vacation, personal, sick time) for some or all of the FMLA leave period.

In contrast, under the EFMLEA, only the first ten days of an employee’s leave are unpaid.  Like under the FMLA, an employee can use accrued paid leave for this period.  For the remaining ten weeks, an employer must provide no less than two-thirds of an employee’s regular rate of pay for the number of hours the employee would have otherwise been scheduled to work.  However, this pay cannot exceed $200 per day and $10,000 in the aggregate.

For employees whose schedule varies from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken leave, the employer should calculate the average number of hours the employee was scheduled per day over the six-month period ending on the date on which the employee takes the EFMLEA leave (including hours for which the employee took leave of any type).  If the employee has not been employed for six months, the employer should calculate the rate of pay the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

Employers With Less Than 25 Employees May Be Exempted From Job Restoration Protection.

Under the FMLA, upon return from leave, the employer requires that the employer return the employee to the same job, or one that is nearly identical (equivalent).

These protections do not apply to an employer that employs fewer than 25 employees so long as the employee’s positon no longer exists due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by the COVID-19 public health emergency.  However, the employer must make reasonable efforts to restore the employee to an equivalent position with equivalent employment benefits, pay, and other terms and conditions, and contact the employee if an equivalent position opens for up to a year after the employee’s leave.

Possible Exemptions For Health Care Employers and Small Businesses

The EFLMEA gives the Secretary of Labor the authority to issue regulations for good cause to exclude certain health care providers and emergency responders from the definition of eligible employee.

It also gives the Secretary of Labor the authority to issue regulations for good cause to exempt small businesses with fewer than 50 employees from the requirements of the EFLMEA when “the imposition of such requirements would jeopardize the viability of the business as a going concern.”

We await the issuance of any such regulations.

EFMLEA Does Not Provide Leave In Addition To Twelve Weeks Under FMLA

Of note, the EFMLEA appears to merely add an alternative, qualifying reason for an employee to take FMLA leave – i.e., because of a qualifying need related to a public health emergency.  As such, if an employee has already used twelve weeks of FMLA leave for another qualifying reason, then the employee would not be to use an additional twelve weeks of EFMLEA leave for a qualifying need related to a public health emergency.

No Retaliation

As a reminder, the FMLA (and, therefore, also the EFMLEA) prohibits employers from:

  • Interfering with, restraining, or denying the exercise of, or the attempt to exercise, any FMLA right;
  • Discriminating or retaliating against an employee or prospective employee for having exercised or attempted to exercise any FMLA right; or
  • Discharging or in any other way discriminating against any person, whether or not an employee, for opposing or complaining about any unlawful practice under the FMLA.

If employers are considering layoffs and/or furloughs in association with the COVID-19 outbreak, they should be cautious not to make those decisions on the basis of whether or not an employee is using, or is expected to use, EFMLEA leave.

Division E – Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act (“EPSLA”) provides that all employers with less than 500 employees shall provide its employees with paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
  3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
  6. The employee 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.

There is an express exception for employers who are “health care provider[s]” or “emergency responder[s].”  Those employers may elect to exclude their employees from the application of this subsection of the statute.

This section of the FFCRA goes into effect on April 2, 2020.

Amount of Paid Leave Benefit

For any paid sick time that falls under paragraphs (1), (2), or (3), full-time employees are entitled to 80 hours of paid sick time, and part-time employees are entitled to the number of hours that such employee works on average over a two-week period.  In no event shall the total amounts paid exceed $511 per day, or $5,110 in aggregate.

For any paid sick time that falls under paragraphs (4), (5), or (6) (i.e., care of family members), the calculation is the same as above, except that employees are only entitled to two thirds of their wages, as opposed to their full wages.  In no event shall the total amounts paid exceed $200 per day, or $2,000 in aggregate.

There is no minimum period of time that an employee must be employed before he/she qualifies for this leave.

Of note, employers are expressly prohibited from requiring individuals taking EPSLA leave to find their own replacement.

It Is Unclear If The EPSLA Leave Is Required In Addition To Employee’s Existing Paid Sick Leave.

An earlier version of the FFCRA expressly stated that the EPSLA leave was “in addition to” any paid leave provided for by the employer, but that language was removed in the final bill.  Therefore, it is unclear if employers may require employees to use the EPSLA leave concurrently with their Massachusetts-required paid sick leave.

Based on the information we currently have, our view is that treating the new EPSLA leave as a completely separate category of leave would be a good option for most employers.  This is because employers are also entitled to refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing COVID-19-related leave to their employees.  If an employer asks an employee to use his/her previously banked sick leave time first, and an employee uses 40 hours of previously banked sick leave time for the first half of their EPSLA leave, the employer must pay that time out and will not be reimbursed for it through the special tax credits available under the FFCRA.

Because of the ambiguity in the statute, we may see more guidance from the Department of Labor on this issue in the coming weeks.

Notice Requirements

Like other labor laws, employers are required to post a notice in a conspicuous place on the work premises to notify employees of the availability of EPSLA leave.  The Secretary of Labor will make a notice available “not later than 7 days after the date of enactment” – i.e., on or before April 9, 2020.

No Retaliation

The statute expressly makes it unlawful for employers to discharge, discipline, or otherwise discriminate against an employee who takes a leave in accordance with the law.

As discussed in the prior section with respect to the EFMLEA, if employers are considering layoffs and/or furloughs in association with the COVID-19 outbreak, they should be cautious not to make those decisions on the basis of whether or not an employee is using, or is expected to use, the EPSLA leave.

Penalties for Violation

Employers who are found to violate the EPSLA or retaliated against an employee for pursuing EPSLA benefits will be considered to have failed to pay minimum wages in violation of the FLSA.

An Employee Who Qualifies For EFMLEA Will Also Qualify For EPLSA.

Under the FMLA, if an employee substitutes paid leave for unpaid FMLA, the two types of leave run concurrently, with the employee receiving pay pursuant to the paid leave policy and receiving protection for the leave under the FMLA.

Applying that to these two new laws, we note that both the EFMLEA and the EPSLA provide benefits to employees who need leave to care for a child in the event that their school or childcare provider has been closed due to the COVID-19 crisis.  The EPSLA requires ten days of paid leave only, and the EFMLEA requires no paid leave for the first ten days.  Therefore, a likely scenario for employees who qualify for both of these benefits would be that the first two weeks of the twelve-week EFMLEA leave would be paid pursuant to the EPSLA, and then the remaining ten weeks would be paid pursuant to the EFMLEA.

DIVISION G – Tax Credits for Paid Sick and Paid Family and Medical Leave

The FFCRA allows employers to take tax credits for qualified public health emergency leave wages and qualified sick leave wages, with such credits to be taken on payroll tax returns filed by the employers.  Most employers file payroll tax returns on a quarterly basis on Form 941, thus, any credits for wages paid pursuant to the FFCRA would be taken on the payroll tax return for that quarter.  The credit is refundable to the employer to the extent that the amount of wages paid pursuant to the FFCRA for that quarter exceed the payroll taxes owed for that quarter.

On March 20, 2020, the Treasury Department, Labor Department, and IRS released a statement outlining important information for employers regarding their tax credits

Link: Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave

Some key takeaways, as noted by the three agencies, are:

Complete Coverage

Employers receive 100% reimbursement for paid leave pursuant to the FFCRA.

  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.

Fast Funds

Reimbursement will be quick and easy to obtain.

  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
  • Where a refund is owed, the IRS will send the refund as quickly as possible.

Easing Compliance

  • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.

Lastly, although the EFMLEA and the EPSLA are not effective until April 2, 2020, the corresponding sections under the Tax Credits section of the FFCRA suggest that the credits are available earlier than that.  Sections 7001(g) and 7003(g) identically states:

Application Of Section.—This section shall apply only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury (or the Secretary’s delegate) which is during the 15-day period beginning on the date of the enactment of this Act, and ending on December 31, 2020.

We interpret the March 20, 2020 announcement from the Treasury, IRS, and Labor Departments as an indicator that employers can start granting leave and utilizing credits now.  However, our view is subject to further guidance and regulations on the tax credits.

Finally, to the extent that businesses utilize a third-party vendor for their payroll services, we suggest that those businesses reach out to their payroll administrators to discuss this process now, so that businesses can take advantage of the credits as soon as possible.


The legislative landscape in response to the COVID-19 pandemic is changing on nearly an hourly basis.  The FFCRA has immediate implications for employers.  We will continue to monitor relevant statutes and regulations and share insights with our clients.


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