The Complex Interplay of FFCRA and CARES: Guided Navigation of COVID-19 Legislation

By Kim LaFevor and Matt Stiles

On March 11, 2020, H.R. 6201-Families First Coronavirus Response Act (FFCRA) bill was introduced in the House of Representatives by House Appropriations Committee Chairwoman Nita Lowey (D-NY) with the aims of providing legislative relief to specifically address paid family and medical leave, paid sick leave, unemployment benefits, and tax credit provisions for employers amidst the COVID 19 crisis.  With historical speed, legislative approvals in both the House and Senate took only 3 weeks combined.  President Donald J. Trump signed this new legislation on March 18 which took effect April 1st and sunsets year-end on December 31, 2020.  It is not often we see a bicameral legislative system move with such unification and sense of urgency.  The expeditious path of this unprecedented legislation brought with it a whirlwind of employer mandates and employee rights generally affecting most public and private employers with fewer than 500 employers.  It is hard to imagine that this new law was introduced as a bill less than two months ago, yet now we have had to grapple with its immediate, careful, and far reaching deployment.  What are the broad provisions of the FFCRA?  How are we purveying a steady response? As a covered employer, how can we be assured we have met all its mandates?  How does the newly passed Coronavirus Aid, Relief, and Economic Security Act (CARES Act) interplay?

Unpacking the FFCRA

FFCRA applies to all public and private employers with fewer than 500 full and part-time employees in the United States, District of Columbia, or any territory of the United States.  Employers must consider all employees, including employees on leave, temporary employees who may be jointly employed by another employer, other employees aggregated by virtue of an integrated  employer relationship, day laborers supplied by a temporary agency (whether the agency or client firm), and Federal government employees covered by Title I of the Family Medical Leave Act (FMLA).  Since Federal employees covered under Title II already have special coverage provisions, the FFCRA did not modify their eligibility.

The Act provides two employment related components for employees:  1) the Emergency Family and Medical Leave Expansion Act, and 2) the Emergency Paid Sick Leave Act.  Additionally, the FFCRA also allows for employer tax credits.  However, in a separate legislative action, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) presents an interplay of legal requirements that are interdependent with the remedies of the FFCRA. To fully glean an employer’s obligations, it is vital to discern the anatomy of both of these laws and how they interplay to provide both employer and employee crisis relief solutions.   

Emergency Paid Sick Leave Act (EPSLA)

The FFCRA affords emergency paid sick leave entitlements for employers covered under the Act.   These emergency paid sick leave benefits include up to two weeks (80 hours-or part-time workers two-week equivalent) paid sick leave for employees who take leave related to COVID 19 because they are unable to work or telework for the following reasons:

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID 19
2. has been advised by a health care provider to self-quarantine related to COVID 19
3. is experiencing COVID 19 symptoms and is seeking a medical diagnosis
4. is caring for an individual subject to an order described in #1 or #2
5. is caring for his or her child whose school or place of care is closed (or child care provider is unavailable) due to COVID 19 related reasons
6. is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services (U. S. Department of Labor, 2020)

Employees are paid at 100% for qualifying conditions #1-#3 up to $511 daily and $5,110 total, and two-thirds their regular rates of pay for reasons #4-#6 up to $200 daily, and $2,000 total.  Such afforded benefits are provided by the employer in addition to existing paid leave benefits.  Therefore, employees are enabled to exhaust all available emergency paid leave provided by this Act before they can be required to use any otherwise available leave benefits offered through the employer.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

The FFCRA expands the Family and Medical Leave Act of 1993 (FMLA) for the purposes of childcare for an employee’s child 18 years of age and younger in the event the child’s school is closed or child care provider is unavailable due to a public health emergency.  At this time, neither the Act nor DOL imposes a certification requirement on employees seeking EFMLEA; however, U.S. Treasury Department (IRS) FAQs instruct employers to obtain in employee requests for leave and substantiation of eligibility in writing and retain those records to prove eligibility for a tax credit.  FFCRA authorizes employers to receive a tax credit for 100% of the qualified EPSL and EFMLEA benefits paid to their employees, including the cost of employer-paid health insurance premiums for benefits provided to employees using such leave. 

This emergency expansion of traditional FMLA applies to all employers with fewer than 500 employees and not limited to the original 50 or more employee threshold used under traditional FMLA, as well as lowers tenure eligibility to employees who have worked for only 30 days or greater.  While the first 10 days of EFMLEA may be unpaid in the event the employee does not elect to use accrued paid leave during this initial period, an employee could elect to receive EPSL benefits during that first 10 days, concurrently with EFMLEA.  Thereafter, an employee who remains on EFMLEA leave could take up to an additional 10 weeks at two-thirds of the employee’s regular rate of pay, for a total of 12 weeks capped at $200 per day or $12,000 in total (inclusive of both EPSL and EFMLEA benefits).

Interplay of the new Coronavirus Aid, Relief, and Economic Security Act (CARES)-Relief for Workers Affected by the Coronavirus Act (RWACA)

President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on Friday, March 27, 2020.  While separate legislation from the FFCRA, this new law provided Paycheck Protection Program (PPP) loans for small businesses, non-profits, and other specified businesses, but also includes the Relief for Workers Affected by Coronavirus Act (RWACA) which works in cadence with the states’ unemployment compensation systems. 

The RWACA provides additional unemployment benefits to those impacted by COVID 19 and offers benefits beyond the maximum usually paid by the states, as well as provides coverage to employees who are not generally eligible (those who are self-employed, independent contractors, workers of the “gig economy,” lack of sufficient work history, seeking part-time employment, etc.) for unemployment benefits.  The RWACA provides $600 per week for eligible employees and this specially included group of workers, above any amount to which one may be entitled for a four-month period retroactive to eligible recipients beginning the workweek of March 29, 2020 through July 31, 2020.  Furthermore, the Act allows for an additional 13 weeks of unemployment compensation payments after state unemployment benefits are no longer available up to 39 weeks through December 31, 2020.

In Closing

Again, we are less than two months from a declared pandemic, idea generation for workplace solutions to full deployment of the mandates of both FFCRA and CARES.  We remain fully immersed in the interpretation and deployment of their respective mandates and their somewhat complex interplay.  It is important to remember, despite legislative dictates of the FFCRA and CARES to which we must respond, a crisis also becomes a defining moment that poses a unique opportunity to elevate organizational brand, draw upon business acumen, demonstrate an organizational resiliency and don duty of care in assuring the well-being of its people. And we must remember, lasting relationships are forged in crisis.