The Families First Coronavirus Response Act: What Your Startup Needs To Know

March 23, 2020

Buried in the onslaught of public health news, you might not be aware that the federal government just passed an enormous piece of legislation that directly impacts employment law compliance…

Buried in the onslaught of public health news, you might not be aware that the federal government just passed an enormous piece of legislation that directly impacts employment law compliance for small to medium size businesses, including startups.

THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT

The Families First Coronavirus Response Act (FFCRA) dramatically expands paid sick leave requirements and family leave requirements, including applying the Family and Medical Leave (FMLA) to businesses that were never before subject to its regulations.

The paid sick and family leave requirements outlined below apply to all business with fewer than 500 employees.  Yes, that’s right.  It applies only to small and medium size business, not large companies.  Please note, however, that the federal government will be putting forth regulations exempting some small businesses with fewer than 50 employees from some parts of the FFCRA,  At this point, we don’t know which small businesses will qualify for the exemption nor do we know which provisions they will be exempt from.

The FFCRA goes into effect on April 2, 2020, and sunsets on December 31, 2020, unless extended.

This Client Update outlines some major provisions of the FFCRA.

KEY COMPONENTS

A) New Paid Sick Leave Requirements

The FFCRA requires covered employers (i.e. those with fewer than 500 employees) to provide up to 80 hours (i.e. 10 full-time days) of paid sick leave if an employee is unable to work (either onsite or remotely) because the employee:

  • Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  • has been advised by a health care provider to self-quarantine related to COVID-19;
  • is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
  • is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
  • is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
  • is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

The benefit is capped, depending on which of the reasons stated above is the motivation for the employee’s leave.  Part-time employees receive a pro-rated benefit eligibility.

Please note that this requirement exists no matter how long the employee has been working for you.

You cannot require employees to use other accrued leave (sick, vacation, etc…) before they are eligible for these FFCRA benefits.  And, of course, you cannot retaliate against a worker who exercises rights under FFCRA.

B) Expansion of FMLA

The FFCRA requires employers with less than 500 employees to offer up to 12 weeks of paid family leave if an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Certain businesses with less than 50 employees may be exempt from this requirement.

Like the paid sick leave requirement, the statute sets caps on the amount an employee is required to be paid as part of this family leave.

For the first two weeks of leave, the leave may be unpaid.  An employee can, however, use any other accrued paid leave benefit (including the paid sick time under the FFCRA) for those two weeks.  Thereafter, the following 10 weeks the employees are entitled to be paid by the employer, subject to the caps under the FFCRA.

To be eligible, an employee must have been continuously employed for the prior 30 days before requesting leave.

Like any other FMLA leave, an employee is entitled to job-protection during leave – i.e. they can be returned to their job after the conclusion of leave.  For employers with less than 25 employees, there is a limited exemption to this requirement.

C) Requirement to Give Employees Notice

The FFCRA requires all covered employers to post notice of the rights under the FFCRA.  The Department of Labor will be providing the exact language for such notices in the upcoming days.  It is currently unclear how this requirement will apply to remote workers, as the FFCRA only states that the notices must be posted “in conspicuous places on the premises of the employer where notices to employees are customarily posted.”

SUMMARY

With everything else your startup may be juggling right now, it is important to keep in mind the new wave of compliance obligations.  Given the attention around Coronavirus and the importance being placed on protecting our communities and workforces, you can reasonably expect heightened scrutiny around making sure businesses follow these new requirements.

And while startups often make risk management decisions around compliance based on the idea that the government usually focuses on big players, the FFCRA is unique.  It doesn’t apply to the big players.  The only regulatory focus will be on small to medium sized businesses because they are the only ones to which the law applies.

Please do not hesitate to contact us with any questions about this or anything else facing your startup in the midst of the COVID-19 crisis.

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