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COVID-19 Workplace Impact and Employer FAQs: The Families First Coronavirus Response Act

Stacy Williams

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This article addresses questions employers are asking about four sections of the FFCRA. (Updated April 3, 2020.)

The Families First Coronavirus Response Act (FFCRA; "The Act") was signed into law on March 18, 2020, and generally requires employers with fewer than 500 employees to provide a certain amount of paid sick and paid leave to employees affected by COVID-19, and provides affected employers with a corresponding employment tax credit. In addition, the FFRCA temporarily expands Family and Medical Leave Act (FMLA) requirements to offer protected leave related to the coronavirus.

Q: What does FFCRA cover in general?

A: FFCRA guarantees free coronavirus testing, establishes paid family and medical leave and corresponding tax credits, enhances unemployment insurance, expands food security initiatives, and increases federal Medicaid funding. It is divided into the following sections:

1. Appropriations,
2. Nutrition Waivers, to allow students who receive free or reduced-priced meals at schools to continue to receive them
3. Emergency Family and Medical Leave Act Expansion
4. Emergency Unemployment Insurance Stabilization and Access Act of 2020
5. Emergency Paid Sick Leave Act
6. Health Provisions, to help expand COVID-19 diagnostic testing and required tests to be performed at no cost to consumers
7. Tax Credits for Paid Sick and Paid Family and Medical Leave
8. Budgetary Effects

This FAQ document addresses sections C, E, F and G.

Q: When does FFCRA take effect?

A: The law went into effect on April 1, 2020.

Q: Which employers are impacted by FFCRA?

A: The paid sick and paid family leave components impact employers with fewer than 500 employees. The bill authorizes the Secretary of the Department of Labor to issue regulations to: (1) exclude certain healthcare providers and emergency responders from the definition of eligible employee; and (2) exempt small businesses with fewer than 50 employees when it would jeopardize the viability of the business.

Q: How will FFCRA impact employers?

A: Most, but not all, of the provisions of the FFCRA will impact employers with fewer than 500 employees. These employers will be required to provide a certain amount of paid sick and paid family leave to employees affected by COVID-19; and will receive corresponding employment tax credits. In addition, FFRCA temporarily expands the reasons for which employees working for companies with fewer than 500 employees may take leave under the Family and Medical Leave Act (FMLA).

Q: Does FFCRA apply if employers furlough or lay off employees?

A: No, FFCRA provides certain additional paid sick and family leave for eligible employers and does not apply to employees who are furloughed or laid off by an employer. Please note that other laws, including state or municipal laws, may impact furloughed or laid off employees.

Emergency Family and Medical Leave Expansion Act (Emergency FMLA Act)

Q: Which employers are covered by the FFCRA Emergency FMLA Act?

A: Employers with fewer than 500 employees. The Department of Labor may issue regulations excluding from the definition of employer: (1) certain health care providers and emergency responders; and (2) small businesses with under 50 employees when imposing such requirement would jeopardize the viability of the business. We anticipate any future regulations would address the extent to which such categories of employers will be excluded and any requirements for an employer to be excluded.

Q: Are there any exceptions for health care providers and emergency responders?

A: In addition to the Department of Labor's ability to exclude certain employers, an employer of an employee who is a health care provider or an emergency responder may elect not to provide FFCRA Emergency FMLA leave to such employees.

Q: Which employees are eligible to take leave under the FFCRA Emergency FMLA Act?

A: Subject to the exceptions for healthcare providers and first responders above, employees who have been employed for at least 30 calendar days are eligible.

Q: How much leave are eligible employees entitled to take?

A: Eligible employees are entitled to take up to 12 weeks of job protected leave.

Q: Are employees entitled to an additional 12 weeks of leave under the FFCRA Emergency FMLA Act or is the total leave for all FMLA reasons limited to 12 weeks?

A: Total leave under the FMLA, including leave under the FFRCA and for previously existing FMLA-qualifying situations, is limited to 12 weeks.

Q: Are there any exceptions to the requirement that the leave be job-protected?

A: Employers with fewer than 25 employees are not required to provide job-protected leave for an employee taking leave if the employee's position no longer exists following leave due to operational changes occasioned by a public health emergency provided that: (1) the employer makes reasonable efforts to restore the employee to an equivalent position; and (2) the employer makes reasonable attempts to contact the employee for a period of one year following a certain period if an equivalent position becomes available.

Q: What are the reasons an employee can take leave?

A: Eligible employees can take leave for "a qualifying need related to a public health emergency." A qualifying need related to a public health emergency for purposes of the FFCRA Emergency FMLA Act is limited to when an employee is unable to work (or telework) due to a need to care for a child under the age of 18 if the child's school or place of care has closed or the child care provider for the child is unavailable due to the public health emergency.

Q: Must leave under this provision be paid?

A: The first 10 days of the leave can be unpaid. An employee may elect – but cannot be required – to use accrued vacation, personal, medical or sick leave for those days. The remainder of the leave must be paid at two-thirds the employee's regular rate of pay for the number of hours the employee would otherwise be scheduled to work. For employees who have weekly working hours that fluctuate, the employer can take an average over a six-month period. If the employee did not work during that period, 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 controls. Paid leave is subject to a limit of $200 per day and up to a total amount of $10,000.

Q: Can an employer take a credit for the amount it pays employees in paid leave?

A: Yes. See Section Tax Credits for Paid Sick and Paid Family and Medical Leave below.

Q: For how long is the FFCRA Emergency FMLA Act in effect?

A: The FFCRA Emergency FMLA Act will expire December 31, 2020.

Emergency Paid Sick Leave Act

Q: Which employers are covered by the FFCRA Emergency Paid Sick Leave Act?

A: Employers with fewer than 500 employees, except businesses with fewer than 50 employees may claim exemption from leave requirements if it would jeopardize the business. It is unclear at this time how employers would demonstrate that an exemption should apply, and we anticipate future regulations would address this issue.

Q: Are there any exceptions for health care providers and emergency responders?

A: An employer of an employee who is a health care provider or an emergency responder may elect not to provide FFCRA paid sick leave to such employees.

Q: Which employees are eligible to take leave under the FFCRA Emergency Paid Sick Leave Act?

A: Subject to the exceptions for health care providers and first responders above, employees are eligible to take paid sick leave under FFCRA regardless of how long they have been employed by that employer.

Q: How much leave time are eligible employees entitled to take?

A: Full-time employees are entitled to take up to 80 hours of paid sick leave. Part-time employees are eligible for the number of hours equal to the average hours worked over a two-week period.

Q: For what reasons are employees entitled to take paid sick leave?

A: Employees who are unable to work or telework due to any one or more of the following conditions:

1. They are subject to a federal, state, or local quarantine or isolation order ("isolation order") related to COVID-19
2. They have been advised by a health care provider to self-quarantine due to concerns related to COVID-19 ("quarantined employee")
3. They are experiencing symptoms of COVID-19 and seeking a medical diagnosis
4. They are caring for an individual who is subject to an isolation order or is a quarantined employee
5. They are caring for a child if the school or place of care of the child has been closed, or the child care provider is unavailable due to COVID-19 precautions
6. They are experiencing any other substantially similar condition as specified by the Secretary of Health and Human Services

Q: How much are eligible employees entitled to be paid?

A: Paid sick leave will be based on employees' regular compensation, but is capped at a maximum 100% of wages up to $511 per day (and a total of $5,110) for employees in categories 1-3 above, and two-thirds of wages up to $200 per day (and a total of $2,000) for employees in categories 4-6 above.

Q. What impact does this have on a company's existing sick leave policy?

A: This paid sick leave is in addition to any existing sick leave the employer provides. An employer may not require an employee to use other paid leave before the employee uses the paid sick time under the act. Nothing expressly prohibits employers from changing their leave programs after the law is enacted; however, the employee relations impact of doing so should be carefully considered.

Q: Is there a required poster or notice to employees?

A. Employers will be required to post an approved notice once the Department of Labor makes it available.

Q: When will the Departments of Labor begin enforcing the Emergency Paid Sick Leave provisions?

A: On March 20, 2020, the Department of Labor, Treasury and the Internal Revenue Service issued a joint news release announcing that emergency guidance will be issued to allow for a 30-day non-enforcement window provided that employers implement good faith compliance. Go to https://www.dol.gov/newsroom/releases/osec/osec20200320 for further information.

Health Provisions

Q: What new requirements have been imposed on group health plans?

A: A group health plan (GHP) is required to cover without any cost or cost sharing (including deductibles, copayments, and co-insurance) on COVID-19 testing and testing-related services. In addition, a GHP cannot require prior authorization or other medical management related requirements in the event a covered individual must be tested for COVID-19. These requirements apply regardless of whether a GHP is fully-insured or self-insured.

Q: What testing-related services are covered by this requirement?

A: To the extent the services are necessary to determine whether COVID-19 testing is necessary, testing-related services would include:

• In person and telemedicine visits

• Urgent care visits

• Emergency room visits

Q: When is this requirement effective?

A: March 18, 2020.

Tax Credits for Paid Sick and Paid Family and Medical Leave

Paid Sick Leave Tax Credits

Q: Will employers be entitled to take a credit for the amounts they pay in paid sick leave under FFCRA?

A: Yes. All employers, except for government employers, required to pay paid sick leave under FFCRA will be entitled to take a tax credit for the amount paid. These non-government employers will be entitled to a refundable federal employment tax credit for the entire amount they pay in paid sick leave.

Q: Are government employers eligible for a tax credit for paid sick leave?

A: No. The credit does not apply to the government of the United States, the government of any state or political subdivision or any agency or instrumentality of such government.

Q: Are there limits to the tax credit employers can receive for paid sick leave?

A: Yes. Credits may not exceed amounts paid for emergency paid sick leave up to the amounts described above. Because the credit is fully refundable, employers will receive reimbursement of the amount paid, subject to the caps, even if their tax liability is less than the amount paid in emergency paid sick leave.

Q: Am employers entitled to a credit if they keep paying for employees to have health insurance while they are on leave?

A: If employers continue an employee's health plan coverage while the employee is on paid emergency sick leave under FFCRA, the credit is increased up to an amount that includes the employer's expense for the health plan coverage.

Q: How will this tax credit be made available?

A: On March 20, 2020, the Department of Labor, Treasury and the Internal Revenue Service issued a joint news release providing examples of how the tax credit works. Go to https://www.dol.gov/newsroom/releases/osec/osec20200320 for further information.

Paid Family Leave Tax Credits

Q: Will employers be entitled to take a credit for the amounts they pay in paid family leave under FFCRA?

A: Yes, all employers except for government employers, are entitled to a refundable federal employment tax credit for the entire amount they pay to eligible employees. Because the credit is fully refundable, employers will receive full reimbursement of the amount paid regardless of their actual tax liability.

Q: Are government employers eligible for a tax credit for paid family leave?

A: No. The credit does not apply to the government of the United States, the government of any state or political subdivision or any agency or instrumentality of such government.

Q: Are there limits to the tax credit employers can receive for paid family leave?

A: Yes. Credits may not exceed amounts paid for an individual with respect to family medical leave, i.e., $200 per day, and an aggregate of $10,000 with respect to all calendar quarters.

Q: Am I entitled to a credit if I keep paying for my employees to have health plan coverage while they are out on family leave?

A: If you continue an employee's health plan coverage while the employee is on paid family leave, the credit is increased by an amount equal to your expense for providing such coverage.

Q: For how long will the credits under FFCRA be in place?

A: Like the paid sick and paid family leave provisions, the tax credits created by FFCRA will expire December 31, 2020.

Q: How will this tax credit be made available?

A: On March 20, 2020, the Department of Labor, Treasury and the Internal Revenue Service issued a joint news release providing examples of how the tax credit works. Go to https://www.dol.gov/newsroom/releases/osec/osec20200320 for further information.

Learn more

• Do you know which type of employee leave applies? This infographic shows the criteria for three types of leave: Emergency Family and Medical Leave Expansion, Emergency Paid Sick Leave and Family and Medical Leave Act. View the infographic.
• Launch this webcast anytime to get more information on the FFCRA: Protecting Your Workforce and Understanding Policies as Your Organization Responds to COVID-19
• Keep up-to-date on this and other legislation by subscribing to ADP's Eye on Washington alerts.

The information provided by ADP is for general informational purposes only and is not legal, accounting or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation. Any information provided here is by nature subject to revision and may not be the most current information available on the subject matter discussed.