On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (FFCRA), which aims to provide initial relief to small and midsize employers and employees. The act provides paid sick leave under the Emergency Paid Sick Leave Act (EPSLA) and expands the Family and Medical Leave Act (FMLA) to include coverage for emergency family leave under the Emergency Family and Medical Leave Expansion Act (EFMLA) for COVID-19 related reasons and creates refundable paid sick and childcare leave credits for eligible businesses.
The act’s effective date is April 1, 2020, with many of the provisions of the act ending on December 31, 2020. In addition to the paid leave requirements, some key takeaways from the act are:
Note: Provisions of the act are not retroactive.
Most importantly for employers, it requires two weeks of paid leave for COVID-19 related purposes and expands FMLA-type leave, including for caring for a child when a school or place of childcare is closed.
The new sick leave and expanded FMLA leave requirements apply to all employers with fewer than 500 employees. This includes those with less than 50 employees that are not covered by the FMLA. The geographic location of the employees is also not a factor, unlike the 75-mile radius used in the FMLA.
As stated previously, a covered employer is one with 500 or fewer employees – at the time the employee's leave is to be taken – within the United States, which includes any state of the United States, the District of Columbia and any territory or possession of the United States. In making this determination, you should include:
Independent contractors under the Fair Labor Standards Act (FLSA) are not considered employees for purposes of the 500-employee threshold. Nor are employees that have been laid off or furloughed and have not been subsequently reemployed. Furthermore, employees must be employed within the United States.
If two entities are found to be joint employers under the FLSA, all of their common employees must be counted in determining whether paid sick leave must be provided.
In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act (FMLA), then employees of all entities making up the integrated employer are to be counted in determining employer coverage for purposes of the expanded family and medical leave requirements.
Under the Emergency Paid Sick Leave Act (EPSLA) employers are required to provide eligible employees with:
Part-time workers must be provided leave equal to the number of hours they would normally work in two weeks. For example, an employee who works an average of 32 hours per week would be entitled to 64 hours of paid sick leave.
The paid sick leave in the new law is in addition to any other paid leave that a company would otherwise provide and does not carry over from one year to the next.
The EPSLA requires employers to provide paid sick leave to employees who are unable to work for the following six reasons having to do with COVID-19 where:
Note: Each employee is only eligible for 80 hours of paid sick leave. Therefore, an employee may not take paid sick leave to care for an individual other than themselves and then take additional sick leave if he or she contracts the virus.
Employers may exclude employees who are healthcare providers or emergency reponders from taking paid sick leave.
Unless an employee is unable to telework due to the requirements of his or her particular job, an employer is not obligated to pay sick leave for employees choosing to self-quarantine. An employee who is self-quarantining but still able to telework may not take sick leave if:
Similarly, employees seeking a medical diagnosis due to experiencing symptoms of COVID-19 (i.e., shortness of breath, fever, dry cough, etc.) may take paid leave due to an inability to work for time spent making, waiting for or attending an appointment for a test for COVID-19. But, the employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis. If an employee who is waiting for the results of a test is able to telework, he or she may not take paid sick leave if the conditions described in the bullets above apply. However, such employees may continue to take leave while experiencing symptoms or testing positive provided the healthcare provider advises the employee to self-quarantine. Additionally, an employee who is unable to telework may continue to take paid sick leave while awaiting a test result, regardless of the severity of the symptoms he or she is experiencing.
An employee who exhibits COVID-19 symptoms and seeks medical attention but is told that he or she do not meet the criteria for testing and is advised to self-quarantine, would be eligible for paid sick leave provided he or she is unable to telework.
To take paid sick leave to care for an individual other than oneself, there must be a genuine need for the employee to care for the individual. Sick leave may not be taken for an employee to care for someone for which he or she has no personal relationship. “Personal relationship” is defined under the act as an immediate family member, roommate or similar person the employee has a relationship with where the expectation of care exists. Additionally, the individual needing to be cared for must either:
Employees who are using sick leave for reasons related to their own isolation or care, must be paid their regular pay for the time they are absent, up to a maximum of $511 per day and $5,110 for the leave. Employees using sick leave for purposes of caring for a child or individual other than themselves must be paid up to 2/3 of their regular pay, up to $200 per day and $2,000 for the leave period.
Part-time employees are eligible for the number of hours of leave that the employee works on average over a two-week period.
Hours of leave are calculated based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours. The part-time employee may take paid sick leave for this number of hours per day for up to a two-week period and may take expanded family and medical leave for the same number of hours per day up to 10 weeks after that.
If this calculation cannot be made because the employee has not been employed for at least six months, use the number of hours that you and your employee agreed that the employee would work upon hiring. If there is no such agreement, you may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his or her employment.
For purposes of the FFCRA, the regular rate of pay used to calculate paid leave is the average of the employee’s regular rate over a period of up to six months prior to the date on which leave is taken. If an employee has not worked for a period of six months, the regular rate is the average of an employee’s rate of pay for the period in which he or she has worked for you. The FMLA expansion requires you to pay an employee for hours that he or she normally would have been scheduled to work even if that is more than 40 hours in a week.
However, the act only provides for 80 hours of pay for the two-week period. Thus, for example, an employee who is scheduled to regularly work 50 hours per week, would be paid for 50 hours of work in week one of the leave and you would then only be required to pay for 30 hours of work in week two.
Note: Pay does not need to include a premium for overtime hours.
If the employee’s schedule varies from week to week, an employer should use one of the methods discussed previously in Counting hours worked to calculate the regular rate of pay.
Employees with rates of pay lower than the federal, state or local minimum wage should be paid the higher minimum wage amount for the leave period. For example, an employee makes $4.65 per hour and the federal minimum wage is $7.25/hour; the state minimum wage is $9.00/hour and the local minimum wage is $10.00/hour. The employee would need to be compensated at the higher $10.00/hour for the paid leave period. For such employees taking leave to care for a child due to a school closing or unavailability of childcare, he or she would receive $6.67/hour for the leave period (2/3 the highest applicable minimum wage).
The FFCRA also created the Emergency Family and Medical Leave Expansion Act (EFMLEA). Under EFMLEA, covered employers (those with less than 500 employees) must provide employees that have been employed by the employer for at least 30 days with up to 12 weeks of job-protected paid leave if the employee is unable to work (or telework) due to the need for leave to care for a son or daughter under 18 whose school or place of care was closed, or the childcare provider is unavailable, due a COVID-19 "public health emergency."
The first two weeks of the 12-week period are unpaid. However, an employee may use existing sick time, PTO and/or vacation time under the employer's policy if the employer elects to allow such employees to do so. If the reason for the leave is related to caring for a child, the employee may use the two weeks of EPSLA provided during the unpaid period. For the remaining 10 weeks of the period, employees must be paid at 2/3 of their regular pay, up to $200 per day and $10,000 per leave period. Unlike the regular FMLA, employers cannot require employees to use other paid leave.
The EFMLEA amends the FMLA to add a sixth reason to take the 12-week entitlement: To care for an employee’s son or daughter whose school or place of care is closed, or childcare provider is unavailable due to COVID-19 reasons. Employees are limited to a total of 12-weeks per leave period. Therefore, where an employee has already taken Family and Medical Leave Act (FMLA) leave in the current 12-month period, the maximum amount of EFMLEA leave is reduced by the amount of FMLA leave entitlement taken during the period.
Example: If the employer uses the calendar year as the 12-month FMLA leave year and an employee took three weeks of leave in January 2020 for the employee’s own serious health condition, that employee would only have nine weeks of EFMLEA leave available.
Additionally, employees are limited to a total of 12 weeks of expanded family and medical leave under the EFMLEA, even if the applicable time period (April 1 to December 31, 2020) spans two 12-month leave periods under the FMLA. For employees needing to take leave to care for a servicemember with a serious injury or illness, the total amount of leave available will be calculated based upon the maximum amount outlined under the FMLA of 26 weeks.
Note: Prior use of FMLA leave does not affect an employee’s ability to take EPFLA leave.
Because leave under the EFMLEA is paid leave, the FMLA provision allowing for substitution of the employee’s accrued paid leave is inapplicable, and neither the employee nor the employer may require the substitution of paid leave. However, where federal or state law permits and employers and employees agree, accrued paid leave may be used to supplement the two-thirds pay under the EFMLEA so that the employee receives the full amount of their normal pay.
Small businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide leave due to school closing or childcare unavailability if the leave requirements “would jeopardize the viability of the business as a going concern.”
Note: This exemption is only available for the school closing or childcare unavailability provisions in the act.
For an exemption to be valid, one of the following scenarios must apply:
Keep in mind that even if your small business qualifies for an exemption under one of the areas described above, it still must provide up to 80 hours of paid sick leave for employees to use for the other reasons available under the EPSLA as described earlier in this chapter.
Employers do not need to send supporting documentation regarding the decision to deny EPSLA or EFMLEA leave to the U.S. Department of Labor (DOL) under this exemption, but instead should retain such records for its own files.
Because the new law is an amendment to the FMLA, many of the practices from the FMLA will apply. Employees do not need to specifically request their new leave rights, but merely communicate circumstances that a supervisor should recognize as triggering their leave rights. Certifications by a healthcare provider are sufficient to qualify for leave, without further substantiation.
Both EPSLA and EFMLA leave may be taken on an intermittent basis provided that the employer and employee agree to the terms of such leave. The basic terms of the mutual agreement would be in the increments in which leave may be taken. Without such an agreement, no leave under the FFCRA may be taken intermittently.
If an employee is teleworking and the company allows the intermittent leave it may be taken on an hourly basis. Employees are to be paid their regular rate of pay for hours worked and 2/3 of their regular rate for leave hours.
Example - An employee making $20/hour works 8:00 a.m. until noon and then takes leave from noon to 4:00 p.m. to care for a child. The employee would receive his or her regular pay of $80 ($20 x 4) and an additional four hours of pay at 2/3 their regular rate ($80 x 2/3 = $53.33) for a total daily compensation of $133.33.
Teleworking employees may take intermittent leave even if the leave is related to the employee or employee's household member having COVID-19 as the employee's being self-isolated takes away the risk of exposure to the employer's other employees.
Similarly, if the employee is not teleworking, but is required to report to the employer's worksite, then the leave must be taken in full-day increments, unless it is leave taken to care for a child whose school or place of care is closed, in which case it may be taken on an hourly basis. This intermittent leave may be granted only in cases where there is an absence of confirmed or suspected COVID-19 in the employee's household. The employer will want to ensure it is taking all precautions to reduce the risk of exposure to its other employees.
If the leave is taken because of the employee having COVID-19, or symptoms thereof, or is caring for an individual suspected of having, or having, COVID-19, then intermittent leave is prohibited under the act. Such leave is prohibited due to the unacceptably high risk that the employee might spread the virus to other employees who are reporting to the employer's worksite.
If an employee is able to return to work prior to exhausting the full two weeks of EPSLA leave or 10 weeks of paid EFMLA leave, he or she may use the remaining leave for another qualifying reason prior to December 31, 2020.
ESPLA and EFMLEA leave are in addition to any existing leave already provided by the employer (i.e., vacation, personal leave, sick time, etc.). There is nothing in the FFCRA that mandates that an employer provide preexisting leave entitlements concurrently with EPSLA or EFMLEA leave. However, an employer may not deny an employee EPSLA or EFMLEA leave on the grounds that an employee has already taken another type of leave or taken leave from another source, including leave taken for reasons related to COVID-19. Regardless of how much other leave an employee has taken up to the date he or she requests EPSLA or EFMLEA leave, the employer must permit the employee to immediately take any and all paid sick leave or expanded family and medical leave to which he or she is entitled and eligible under the EPSLA and the EFMLEA. However, the preceding analysis does not apply to or affect the FMLA's 12 workweeks within a 12-month period cap.
The U.S. Department of Labor (DOL) interprets “existing employer policy” to include a COVID-19 related offering of paid leave that the employer voluntarily issued prior to April 1, 2020, and under which employees were offered more paid leave than under the employer's standard or current policy. The department acknowledges that some employers voluntarily offered and provided such leave to help employees in this time of emergency. Nonetheless, the FFCRA still requires those employers to provide the entirety of the EPSLA and EFMLEA leave to which its employees are eligible, regardless of whether an employee took the additional paid leave the employer voluntarily offered. Doing so is necessary to ensure all eligible employees receive the full extent of paid sick leave and expanded family and medical leave to which they are entitled under the EPSLA and the EFMLEA. However, an employer may prospectively terminate such a voluntary additional paid leave offering as of April 1, 2020, or thereafter, provided that the employer had not already amended its leave policy to reflect the voluntary offering. This means the employer must pay employees for leave already taken under such an offering before it is terminated, but the employer need not continue the offering in light of the FFCRA taking effect.
While the employee is on leave, the employer must continue the employee’s group health care coverage on the same basis as if the employee were still working including medical care, surgical care, hospital care, dental care, eye care, mental health counseling, substance abuse treatment and other benefits coverage. This requirement also applies to benefits provided through a supplement to a group health plan, whether or not the supplement is provided through a flexible spending account or other component of a cafeteria plan.
Should an employer begin providing a new health plan or benefits or changes occur to the health benefits or plans while and employee is taking EPLSA leave or EFMLEA leave, the employee is entitled to the new or changed plan benefits to the same extent as if the employee was not on leave. The employer is required to provide notice of any opportunity to change plans or benefits and if the employee requests changes to coverage it must be provided.
If the leave is unpaid, the employee must pay his or her share of the premium, but even if he or she does not, the employer must reinstate the coverage when the employee returns to work, with no preconditions. (These are essentially the same rules that apply to FMLA leave.)
An employer that is a signatory to a multiemployer collective bargaining agreement may satisfy its obligations under the EFMLEA and the EPSLA by making contributions to a multiemployer fund, plan or other program consistent with its bargaining obligations and its collective bargaining agreement. The contributions must be based on the amount of EPSLA and EFMLEA leave to which the employee is entitled under the applicable provisions of the FFCRA based on each employee's work under the multiemployer collective bargaining agreement. The fund, plan or other program must allow employees to obtain their pay for the leave to which they are entitled under the FFRCA.
Alternatively, an employer that is part of a multiemployer collective bargaining agreement may choose to satisfy its obligations under the FFCRA by means other than through contribution to a plan, fund or program, provided they are consistent with its bargaining obligations and collective bargaining agreement.
Employees are not entitled use EPSLA or EFMLEA leave to offset a reduction in hours caused by the lack of available work. Thus, leave cannot be used for hours that the employee is not scheduled to work.
Shutdowns and furloughs
Under the DOL's FAQs, employees are not entitled to EPSLA or EFMLEA leave in the event of a shutdown either before or after the effective date of FFCRA, or if they become furloughed. Furthermore, if a worksite closes while an employee is on leave, the employee's paid leave ends on the date of the closure. Employers are encouraged to consult with legal counsel prior to furloughing employees or shutting down a worksite if there are employees out on leave that would be affected by such actions.
Generally, when leave is concluded, the employee has the right to return to his or her old job or to an equivalent one. If the employer conducts a layoff that would have included the employee on leave, the employer can deny restoration. There is also a “key employee” exception to the restoration requirement, like the one in the FMLA. Employers with fewer than 25 employees can deny restoration in the case of an employee who is on leave to care for a child in the event of a school closure or closure by the child's caregiver for the following reasons:
In response to an employee request for leave under the FFCRA, the following documentation in support of the reason for the leave must be compiled:
The employer also should require the employee to submit supporting documentation:
Additionally, the employer may request any information necessary to qualify for tax credits. If the employee fails to provide the requested information, the leave may be denied.
Records must be retained for four years. This includes grants and denials of leave. It also includes all documentation provided by the employee in support of the request for leave. If the employee provided oral statements, the employer is responsible for documenting the reasons and retaining the documentation. In the case of a small business invoking the exemption, the determination by the authorized officer must be retained.
For purposes of the tax credits, the employer must retain the following documentation for four years:
The language of the FFCRA requires that each covered employer (even if they live in a state that requires greater protections) must post the FFCRA notice in a conspicuous place on its premises. If an employer has employees reporting to multiple worksites, the notice must be posted at each individual site. The poster can be obtained by clicking the Policies/Forms tab at the top of this chapter or online at:
Since, during this time of coronavirus pandemic, many employees of covered employers are telecommuting and not actually on the premises, the DOL has issued guidance stating that an employer would satisfy the posting requirement by either:
The notice need not be:
This notice must be conveyed to new hires either by email, direct mail or by posting the notice on the premises or on an employee information internal or external website.
The act provides for a tax credit for employers who have paid employees under the new law. Covered employers qualify for dollar-for-dollar reimbursement through tax credits for qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee that has taken leave under the act for a qualifying reason, up to the appropriate caps as outlined previously. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.
To take 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. Employers seeking to submit a claim should visit:
Example 1 - An eligible employer pays $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withhold from all of its employers and the employer share of Social Security and Medicare. This employer would deduct the $5,000 from the $8,000 normally disbursed to the IRS and under the new law would only deposit the remaining $3,000 on the next regular deposit date.
Example 2 - An eligible employer pays $10,000 in sick leave and is only required to deposit $8,000 in taxes, the employer would use the entire $8,000 of taxes in order to make qualified leave payments and would then file a request for accelerated credit with the IRS for the remaining $2,000.
In addition to the credits for wages, employers are also able to receive credits for for “qualified health plan expenses” related to that leave. The five things all employers should know about calculating payroll tax credits for qualified health plan expenses under the FFCRA are:
For self-insured plans, the IRS suggests a substantially similar method that takes into account the average premium rate determined separately for employees with self-only and other than self-only coverage.
Employers are encouraged to establish a coding system to differentiate leave taken under FFCRA form other leave or work time, to help support the tax credit. Because the payment levels are different for the different reasons, the company should use different codes, such as CVchild, CVcare or CVemployee, or whatever codes the employer chooses to identify the reason for which the leave was taken.
The EPSLA requirements are enforced by the U.S. Department of Labor (DOL) and the penalties for violations of the Fair Labor Standards Act (FLSA) apply. That means in cases of minimum wage violations, that the claimants could receive double the amount they were due, plus attorneys’ fees, and the DOL may pursue additional penalties. For instance, an employee may maintain, on behalf of himself or herself and any other similarly situated employees, an action in any federal or state court of competent jurisdiction to recover an amount equal to the federal minimum wage for each hour of paid sick leave denied, an additional equal amount as liquidated damages, and an amount for costs and reasonable attorney's fees. Moreover, the Secretary may bring an action against an employer to recover an amount equal to the federal minimum wage for each hour of paid sick leave denied, and an additional equal amount as liquidated damages, or to obtain an injunction against the employer. Finally, in the case of a repeated or willful violation, the employer shall also be subject to a civil penalty for each violation, and liable in an additional amount, as liquidated damages, equal to the minimum wage for each hour of paid sick leave denied.
The enforcement provisions of the FMLA apply to violations of the EFMLEA, with one exception: An employee may not bring a private action against an employer under the EFMLEA if the employer is not otherwise subject to the FMLA.
Employees may file complaints alleging violations of the EPSLA and/or the EFMLEA with the DOL's Wage and Hour Division.