Businesses of all sizes are facing a wide range of potential legal and risk concerns as the impact of the coronavirus (or COVID-19) continues to play out. One of the major areas of concern and uncertainty is the Families First Coronavirus Response Act (FFCRA). Small businesses should carefully consider the implications the FFCRA will have on their business and how to handle certain employee situations moving forward.

The Department of Labor (DOL) has released a preliminary “Questions and Answers” page, attempting to answer some questions about compliance and options for the businesses impacted by FFCRA. The paid leave provisions will become effective on April 1, 2020, and will apply to leave taken between April 1, 2020 and December 31, 2020. The DOL has stated that they will be issuing regulations about implementation in the near future, however there are still numerous questions left unanswered at this point. 

So, what is there to know at this point?

Who Does it Apply To?

The FFCRA applies to private businesses with less than 500 employees.

What Are the Major Concerns For Business Owners? 

The two leave provisions are the biggest concerns for business owners under the FFCRA; Emergency Paid Sick Leave and Emergency Family and Medical Leave. Generally, the FFCRA provides that covered employees are eligible for the following:  

• Two weeks (up to 80 hours) of Emergency Paid Sick Leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined, and/or experiencing symptoms and seeking a medical diagnosis; or
• Two weeks (up to 80 hours) of Emergency Paid Sick Leave leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine, or to care for a child (under 18 years of age) whose school or child care provider is closed.
• Up to an additional 10 weeks of paid Emergency Family and Medical Leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work because a child’s school or child care provider is closed. 

Another major question for business owners under these leave provisions is whether or not there are limits on how much they will have to pay should an employee take leave. There are daily limits, as well as limits on the total amount that can be paid out to employees in leave situations. 

If an employee is taking Emergency Paid Sick Leave because they are:

• Subject to quarantine or isolation order;
• Have been advised by a healthcare provider to self quarantine; or
• Experience symptoms and are seeking a medical diagnosis,

they will receive their regular rate of pay, for up to a maximum of $511/day, or $5,110 total over the entire two week Emergency Paid Sick Leave period. 

If an employee is taking Emergency Paid Sick Leave because they are:

• Caring for an individual subject to a quarantine or isolation order; or
• Caring for a child whose school or daycare is closed,

they will receive 2/3 of their regular rate of pay, for a maximum of $200/day, or $2,000 over the entire two week Emergency Paid Sick Leave period. 

If an employee is taking Emergency Family and Medical Leave because they are caring for a child whose school or daycare is closed may take Emergency Paid Sick Leave for the first 10 days (see above), and then take an additional 10 weeks under the Emergency Family Leave. In this situation employees will receive 2/3 of their regular rate of pay, for a maximum of $200/day, or $12,000 over the entire twelve week combined Emergency Paid Sick Leave and Emergency Family and Medical Leave period.

What Employees Are Covered? 

All employees are eligible for two weeks of Emergency Paid Sick Leave. 

Employees employed for at least 30 days are eligible for up to an additional 10 weeks of paid Emergency Family and Medical Leave.

How Will Businesses Be Reimbursed For Leave Payments?

Most business owners are concerned about how to pay for leave in this situation and how they will be reimbursed. Businesses will be eligible for new refundable payroll tax credits that should “immediately and fully reimburse them” for complying with the FFCRA. 

What Is The Temporary Non-Enforcement Period? 

The DOL will observe a temporary, 30 day, “non-enforcement” period when the FFCRA takes effect on April 1 and will use this period to allow businesses to come into compliance with FFCRA. During this time, the DOL will not bring enforcement actions against business for violations as long the business has reasonably and in “good faith” to comply with the FFCRA. 

It appears that “good faith” will exist when any violations are redressed and the business has made the employee whole as soon as possible, there were no willful violations and the business has provided the DOL with a written commitment to comply with the FFCRA in the future. 

What About An Exemption? 

There has been a lot of talk and speculation about the DOL providing exemptions from the FFCRA. 

It does appear that small businesses with fewer than 50 employees may qualify for exemption from the requirement of paid leave in the situation where care is needed for a child whose school or child care is no longer available. The exemption will be available if a business is able to show that the paid leave requirements would make it no longer an option for the business to continue. 

The DOL will be providing additional criteria with specifics on how an exemption will work. Any business who will be seeking an exemption should document why the business will meet the criteria. 

In summary, there are still many things to figure out and regulations will be released. Business owners should note that at this point the DOL has offered only initial and informal compliance assistance. Any answers may change or be added to as more formal guidance and regulations are developed and finalized. 

John Rabil is the founder of  Launch, where he works with small and medium sized businesses focusing on counseling, advising and proactive legal and risk management. John has a broad range of business experience, from working at large multinational companies, to starting his own business, which allows him to combine his real life business and legal expertise to provide his clients with unique guidance and specialized advice. John’s vision is to redefine how businesses access and use legal services.