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UPDATED APRIL 1, 2022
On March 18, 2020, President Donald Trump signed the bipartisan Families First Coronavirus Response Act (H.R. 6201) into law. On March 27, 2020, President Donald Trump signed the bipartisan Coronavirus Aid, Relief, and Economic Security Act, otherwise known as the CARES Act, ( H.R. 748) into law, which clarified and made some changes to the Families First Coronavirus Response Act and are integrated into this article. Also see The CARES Act Affects Emergency Paid Leave, Unemployment Insurance, and ERISA.
These acts come on the tail of the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074), which provided funding to federal and state agencies to address the COVID-19 pandemic. These acts will have widespread effects on employers in the United States. Our team has prepared the following summary of the acts.
Two provisions in the Families First Coronavirus Response Act give paid leave to employees who have to miss work because of the COVID-19 outbreak: these are an emergency expansion of the Family Medical Leave Act (FMLA) and a new federal paid sick leave law. Note the law will go into effect April 1, 2020 and expires December 31, 2020.
FMLA Expansion
FMLA has been significantly changed and expanded under the acts. Relevant FMLA provisions now apply to all employers with fewer than 500 employees. The acts include language allowing the Secretary of Labor to exclude healthcare providers and emergency responders from the definition of employees who are allowed to take FMLA leave and exempts small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business. See Small Businesses – Are You Exempt from the Families First Coronavirus Response Act?
Employees will be FMLA eligible if they have worked for the employer for at least 30 days prior to the designated leave. Rehired employees who (1) were laid off not earlier than March 1, 2020, and (2) worked at least 30 of 60 days before they were laid off will also be FMLA eligible. This FMLA expansion means that any eligible employee may take up to 12 weeks of protected leave to care for their child, including children over 18 years of age with a disability and incapable of self-care because of that disability, if their school or place of care is closed or if their childcare provider is unavailable.
The first 10 days of leave may be unpaid (although note the mandatory sick leave provisions below), with the remainder paid at two-thirds the employee’s regular rate for the remainder of the time period – capped at $200 per day and $10,000 in the aggregate for each employee. Employers with 25 or more employees will have the same obligation as under traditional FMLA to return any employee who has taken emergency FMLA leave to the same or equivalent position upon the return to work. However, employers with fewer than 25 employees are generally excluded from this requirement if jobs no longer exist and if the employer makes reasonable attempts to return the employee to an equivalent position for up to a year following the employee’s leave.
After the first workday (or portion thereof) an employee receives paid sick time under this act, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.
Employers will receive reimbursement for these payments in the form of payroll tax abatement tax credits.
Emergency Paid Sick Leave Act
This portion of the law allows an eligible employee to take paid sick leave in the event the employee is subject to a quarantine or isolation order or advised to quarantine by a health care provider (and cannot work); is displaying symptoms of COVID-19 and seeking medical diagnosis; is caring for someone in quarantine, subject to an isolation order, or has been advised to self-quarantine by a health care provider; is caring for a child, including children over 18 years of age with a disability and incapable of self-care because of that disability, if that child’s school or place of care is closed or childcare provider isn’t available; and in related circumstances defined by the Department of Health and Human Services. This is not limited just to family members.
Employers with fewer than 500 employees must provide 80 hours of paid sick leave at the employee’s regular rate, subject to a cap. (There is an exception for healthcare providers and emergency responders).
Sick leave pay is capped at $511 per day up to $5,110 total per employee for their own use and $200 per day up to $2,000 total to care for others. Employees with irregular schedules are paid based on the average number of hours worked in the six months prior to the leave, with other obligations for shorter service periods.
This paid sick leave will not carry over from year to year and may be in addition to any paid sick leave currently provided by employers.
Employees may use this time prior to the paid FMLA time described above; use of this time will not extend the FMLA time available.
Sick pay tendered to employees will also be offset by a 1:1 reduction in payroll tax obligations in the form of tax credits.
Tax Credits
Employers will not be penalized for any failure to make a deposit of the tax imposed if the failure was due to the anticipation of COVID-19 affiliated tax credits. Employers may be eligible for advance payroll credit. The Secretary of the Treasury will later release forms and instructions to provide guidance on how businesses may receive advanced credit.
Furloughed Employees are Not Eligible
According to recent DOL guidance, an employer who furloughs an employee because the employer does not have enough work or business for the employee, the employee is not entitled to emergency paid leave under the Acts. The employee may, however, be eligible for unemployment insurance benefits. For more information about unemployment insurance and other resources available to employees and employers at this time, please see our article: COVID-19 Government-Sponsored Resources.
Construction Contractors are Eligible for Reimbursement
For more information, please see The CARES Act Affects Emergency Paid Leave, Unemployment Insurance, and ERISA
Notice Requirement
Employers must post and keep posted, in places an employee would likely see the notices every workday (e.g., a break-room or bulletin board), notices regarding the Families First Coronavirus Response Act. If an employer’s employees are currently teleworking, employers must email or direct mail the notices to all current and subsequently hired employees or post it on their internal or external website. The two notices required, as of now, are:
For more information about the notice requirements and to assure compliance, please visit the Department of Labor Families First Coronavirus Response Act Notice – FAQ.
