Families First Coronavirus Response Act (FFCRA): What is It and What Does It Mean for Employers?

After much deliberation around whether the federal government would offer paid leave in response to the COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) was signed into law by President Trump on the evening of March 18. There are two elements to the FFCRA: Emergency FMLA and the Paid Sick Leave Law. Both acts come into effect on April 1, 2020 and will sunset on December 1, 2020.

However, as Jim Paretts, Shareholder at Littler Mendelson, P.C, pointed out in a recent webinar, this act was drafted in a couple of days, whereas it typically takes months and sometimes even years to draft a new leave law. With the new leave coming into effect on April 1, 2020, legal experts, employers, insurance carriers, and TPAs are scrambling to understand the constraints of the law, unravel any issues with the language, and the practical applications of the new leave.

Emergency FMLA

The federal FMLA has been expanded, whereby private-sector employers with less than 500 employees must offer 12 weeks of job-protected leave for a qualified need related to a Public Health Emergency (PHE). To be eligible for this leave:

1. Employees must be on an employer’s payroll for a minimum of 30 days, and 
2. Must be unable to work or telework due to the need to care for a child if the child’s school or childcare facility has been closed, or the childcare provider is unavailable due to a PHE. 

The first two weeks are unpaid, but the remaining 10 weeks are paid at two-thirds the regular rate of pay for the number of hours the employee is scheduled to work. For more details, please refer to the Littler Mendelson website.

Emergency Paid Sick Leave Act

Again, this act protects employees working for private-sector employers with less than 500 employees. Unlike FMLA, employees are not required to have a minimum length of service or a certain number of hours worked to be eligible.

To be eligible an employee must be unable to work or telework for one of the following reasons:

1. Federal, state, or local quarantine or isolation order related to COVID-19
2. Health care provider advised the employee to self-quarantine because of COVID-19
3. Experiencing symptoms of COVID-19, seeking a medical diagnosis
4. Caring for an individual in quarantine or self-isolation
5. Child’s school or care provider is closed or unavailable due to COVID-19 precautions
6. “Substantially similar conditions” (we may see more guidance in regulations soon)

There is a disparity between the payment amount depending on the reason for leave. For reasons 1, 2, and 3 above, an employee is entitled to 100% pay, with a maximum of $511 per day or $5,110 aggregate. For reasons 4, 5, and 6, an employee is entitled to two-thirds of their pay, with a maximum of $200/day or $2,000 aggregate. For more details, I would again direct you to the Littler Mendelson website.

Both of the above leaves are not paid through a government fund, but rather by the employer. However, employers can get reimbursed through tax credits for paid leave provided after the effective date. 

FFCRA Awareness

We asked a sample of absence managers and employees, employed by employers with less than 500 employees, questions on the topic of COVID-19, paid sick leave and the FFCRA. None of them were fully informed on the new regulations or the impact it would have on them, with one participant employed by a covered employer stating that “I don’t know of any federal legislation that requires paid sick leave as of yet.”

At first glance this seems unusual, when it’s all we’ve been hearing about, but enacting and putting emergency leave policies in place is a new concept to everyone. That and the fact that none of the respondents have a strict policy in place for employees to follow if they contract COVID-19, as confirmed by one Absence Manager who said, “We don’t have a formal process specifically for the coronavirus yet. Employees have sick time they can fill out through paychecks technology on the website – as of right now it’s just going to be regular sick time.”

Although the managers and employees we spoke with were unfamiliar with the FFRCA that will be coming into effect on April 1, they all felt comfortable speaking with their supervisor if they contracted the virus and seemed confident that they would be entitled to paid leave if they were to contract COVID-19, proving that employers are supporting their employees during these turbulent times.

Practical Application of the FFCRA

Having spent some time digging into the new leave laws, there are still some outstanding questions that we hope the Department of Labor (DOL) can answer. They have created a Q&A page on their website, which we assume they will update as they respond to incoming queries. 

In the meantime, I have outlined some scenarios that may occur after April 1:

1. New hire out of work due to their child’s school being closed:
   1. Eligible for two weeks of Paid Sick Leave (PSL), with two-thirds of pay, up to a maximum of $200 per day
   2. Not eligible for Emergency FMLA as they’ve been on the payroll for less than 30 days
2. Employee out of work because their child has been quarantined:
   1. Eligible for PSL, with two-thirds of pay, up to a maximum of $200 per day
   2. Not eligible for Emergency FMLA because it doesn’t cover this leave reason
3. Employee on the payroll for 31 days, out because child’s school is closed:
   1. Eligible for PSL, with two-thirds of pay, up to a maximum of $200 per day
   2. Eligible for unpaid Emergency FMLA with job protection for the first two weeks. Potentially eligible for another 10 weeks of Emergency FMLA with two-thirds of pay, up to a maximum of $200 per day, once it’s for a covered reason. 
4. Employee out of work because they themselves have been quarantined:
   1. Eligible for PSL, with full pay, up to a maximum of $511 per day. Note the higher payment because it’s the employee who is quarantined.
   2. Not eligible for Emergency FMLA because it doesn’t cover this leave reason

An important note to remember here is that these scenarios only apply to the federally mandated FFCRA. Depending on where you and your employees are located, they may be eligible for state and local leave laws. It’s a complicated maze to navigate, and if you are still unsure of what to do in a certain scenario, please reach out to your legal counsel. They are best placed to help you navigate the regulations during this complicated and unprecedented time.