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Families First Coronavirus Response Act Passes with Less Burden on Employers

March 19, 2020

This is an update to our first report on this legislation.  Before sending it to the President, Congress made significant changes to narrow the law’s scope and ease its burden on employers, particularly small employers.  The President has now signed it.  The law takes effect no later than 15 days after enactment and remains in place until the end of 2020.

The most significant change is that family leave is available only to care for a child whose school is closed due to the pandemic.  An employee needing leave in this circumstance is only entitled to 2/3 pay while on leave and pay is capped at $200 per day.  Having to take a pay cut to take advantage of the law will encourage employees to explore other childcare alternatives before resorting to the benefits this law makes available.

The sick leave provisions originally proposed remained substantially the same. Basically, employees may take 2 weeks of paid leave at full pay, capped at $511 per day, if they are personally sick with coronavirus or quarantined.  If they need leave to care for a close relative who is sick or quarantined, they are entitled to 2 weeks at 2/3 pay, capped at $200 per day.  Again, Congress seems to be providing a benefit while encouraging employees to explore all options available to them.

For part-time employees, their pay for purposes of this law is calculated based on the average hours they work in a two-period looking back over the previous 6 months.

Addressing concerns for small businesses, the law is designed to be cost-neutral to employers.  That is, the pay that is available to employees is capped and employers are entitled to quarterly tax credits against social security taxes to recoup 100% of the wages paid to their employees under this law.

Leave taken under these laws is job-protected, meaning an employer cannot terminate an employee for taking leave and employees are entitled to their job back after the leave ends.  There are some special considerations concerning job restoration for employers of less than 25 employees that should be fleshed out more in the anticipated regulations.

Paid leave provided by this law may not be carried over if not used and employers are not required to pay terminated employees for unused leave.

We have prepared a sample policy that employers may use to notify their employees of this law now. The Secretary of Labor will be publishing a form notice but we recommend immediate notice to employees.

The Families First Act only applies to employers of less than 500 employees.  Employers who are healthcare providers or first responders may elect not to have this law apply.

We are continuing to study this law and consider its application.  We are available to address your individual circumstances and questions.

Trip Umbach 

Alfred Perkins

Breanna Young

Keith Stephens

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