The Families First Coronavirus Response Act: What You Need to Know

On March 18th, 2020, the Families First Coronavirus Response Act (FFCRA) was sign into law, providing important services for American families during this difficult time. The FFCRA is intended to help both employees and employers alike. While there are many provisions in the full legislative package, there are four main aspects of the law that apply primarily to businesses. Here we will break down how this new law may impact your business.

The first portion of the FFCRA that businesses need to pay attention to revolves around the expansion of the U.S. Family and Medical Leave Act (FMLA). In 2020, employers with fewer than 500 employees must provide up to 10 weeks of paid FMLA. The first two weeks of the normal 12-week FMLA leave can be offered as unpaid leave, although an employee is able to receive payment during this time through other paid leave or accrued PTO. Your business could receive an exemption from the Secretary of Labor if you have less than 50 employees or can prove offering the leave would “jeopardize the viability” of your business.

Eligible employees include anyone that has been employed for at least 30 days. Childcare must be provided for employees’ children whose schools have been closed due to the pandemic. The employee must be incapable of working (on-site or remotely) while providing childcare. Employers will first offer unpaid leave (or accrued paid PTO) for 10 days. After this time period, FMLA will go into effect. Employees will be compensated at two-thirds their normal pay rate. The paid leave cannot exceed $200 a day and $10,000 total for the duration of the 10 weeks.

If your business has fewer than 25 employees, you will not be required to reinstate an employee who has taken leave upon their return to work. However, you will be required to do so if you have more than 25 employees. If your business has fewer than 50 employees, you will be exempt from any civil actions concerning emergency paid leave. Healthcare facilities and emergency response organizations are legally protected to exclude any employees from paid leave expansion.

The second aspect of the FFCRA that applies directly to businesses is emergency paid sick leave. Companies with fewer than 500 employees are required to offer paid sick leave to those who meet a specific criteria. The employee must be unable to work on-site or remotely because:

  • They have been put under federal, state, or local quarantine or isolation related to COVID-19.
  • Their doctor has advised them to self-quarantine due to COVID-19.
  • They are experiencing symptoms of COVID-19 and are in the process of getting a medical diagnosis.
  • They are caring for a family member subject to a quarantine order or self-quarantine.
  • They are caring for children whose schools are closed or whose regular caregiver is unable to work because of the COVID-19 emergency.

Full-time employees can receive a maximum of 80 hours of paid sick leave and part-time employees can receive a maximum based on the average amount of time they work in an average two week period. If the employee qualifies under the first three reasons, the sick leave will be paid at the employee’s regular rate with a cap at $511 a day and $5,110 total. If an employee qualifies based on the last two reasons above, they will receive two-thirds their regular pay with a daily cap of $200 per day and $2,000 total.

Emergency paid sick leave through the FFCRA is offered in addition to existing sick leave and/or paid time off that is already offered by the employer. If your business has fewer than 50 employees, you may be exempt if you can prove offering these provisions would “jeopardize the viability” of your business. Again, healthcare and emergency response organizations are able to exclude employees from these provisions.

Tax Credits for paid sick leave and paid FMLA will be offered to help employers afford these provisions. Each quarter, employers are entitled to fully refundable tax credits for costs related to the FFCRA. If these tax credits are not enough to cover employee payouts, the U.S. Treasury Department has been authorized to assist in covering the rest of the costs with cash payouts. The Treasury is also authorized to waive penalties for businesses that do not submit their payroll taxes in anticipation of a refund under FFCRA. A tax credit will be increased by the amount paid by the employer to maintain healthcare for employees on paid sick leave or FMLA.

The final provision of the FFCRA that applies to businesses is the allocation of $1 billion for state unemployment programs. This provision also gives the state government more flexibility in determining which workers need unemployment insurance. Employees no longer need to wait a week or meet specific work search requirements before becoming eligible for unemployment insurance (UI). These provisions may help employers make business decisions surrounding potential layoffs or staff changes due to the coronavirus crisis.

If you need help understanding how the Families First Coronavirus Response Act may affect you personally or as a business entity, please reach out to us at Veitengruber Law. We are working through the pandemic at virtual locations throughout New Jersey and can be reached at the phone numbers listed on our website.















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