Families First Coronavirus Response Act Signed into Law

March 20, 2020

President Trump has signed the Families First Coronavirus Response Act (H.R. 6201), which mandates employers with fewer than 500 employees (including many franchisees) provide nearly all employees with emergency paid sick and family leave benefits to use if they are impacted by COVID-19.

There are questions regarding how to determine whether a covered employer has fewer than 500 employees depending on the corporate structure of the company, which will have to be resolved by the U.S. Department of Labor's implementing regulations.  One potential issue is whether a large corporation's subsidiary with fewer than 500 employees would be covered.

An HR Policy-developed proposal to replace the complicated and unprecedented employer paid leave mandates with expanded unemployment benefits received 50 bipartisan votes, but not the 60 votes needed to amend the measure.

The new law requires employers with fewer than 500 employees to:

  • Immediately provide 80 hours of paid sick leave to full-time employees, while part-time employees are entitled to the usual number of hours they work in a typical two-week period.

    • Paid sick leave taken for personal use is capped at $511 per day and $5,110 in total, while the amount of leave taken to care for a sick family member is capped at $200 per day and $2,000 in total.

  • Provide 10 weeks of paid family leave only to care for a child whose school or daycare is closed due to the coronavirus.

    • Paid family leave is capped at $200 per day and $10,000 total.  All other FMLA leave is still unpaid.

A payroll tax credit, up to certain dollar amounts, will help offset the cost of the mandated benefits for small employers.

Both leave mandates are effective April 2, 2020, and sunset on December 31, 2020.

A survey of HR Policy members found 28% are planning to voluntarily provide these paid leave benefits even though they are not eligible for the tax credit, and another 38% are considering it and are likely to provide them.

Outlook:  Many details and questions will have to be worked out through rulemaking, which the U.S. Department of Labor will begin to work on immediately.  It is possible this sets a precedent for the next Congress and a new administration to apply these leave requirements to all employers, if the current Congress has not already done so by then.