Employer’s Quick Guide to the Families First Coronavirus Response Act

Nelson Mullins Riley & Scarborough LLP

Nelson Mullins Riley & Scarborough LLP

On March 18, 2020, President Trump signed H.R. 6201, the Families First Coronavirus Response Act (Families First Act). In addition to the expansion of family and medical leave, and the requirement to provide paid leave, the Families First Act also provides for federal grants to state unemployment funds under certain circumstances, and allows employers to apply for refundable tax credits to offset the cost of the paid leave. The provisions of the Act require additional interpretation for which the U.S. Department of Labor and Internal Revenue Service are empowered to issue rules and regulations. Employers should review the following quick reference to understand their potential new obligations. 

Emergency Family and Medical Leave Expansion Act



Employer Coverage

Applies to private employers with fewer than 500 employees, unless future regulations that may be issued by the DOL exclude the employee as a health care provider, emergency responder or as employed by a business with fewer than 50 employees if providing the leave would affect the employer’s ability to continue as a “going concern” (i.e. not financially viable). Also applies to employees of governmental agencies of any size.

Covered Event

If the employee is unable to work or telework due to a need to care for a child under 18 years of age because that child’s school (elementary or secondary) or place of care has closed or the child’s child care provider (i.e. provider who receives compensation for providing child care services on a regular basis) is unavailable due to a public health emergency with respect to COVID-19.


Up to 12 weeks of job-protected leave is available. The first 10 days of leave may be unpaid, after which employee receives pay for the remainder of leave at two-thirds (2/3) of the employee’s regular pay rate up to a maximum paid leave of $200/day ($10,000 in the aggregate over 12 weeks).

Possible Pay During First 10 Days of Leave

During the initial 10-day period, employee may elect to use available paid company leave (i.e., vacation, leave, personal leave, or medical or sick leave).

Part-Time and Irregularly Scheduled Employee Benefits

Pay equal to average number of hours worked each week over the six month period prior to taking leave. Calculation must include deemed hours for which the employee took “leave of any type.” For an employee who works variable hours, but did not work for the employer over that six month period, calculate the average number of hours per day the employee reasonably would have been expected to work at the time of hire.

Emergency Paid Sick Leave Act



Employer Coverage

Applies to private employers with fewer than 500 employees, unless future regulations that may be issued by the DOL exclude the employee as a health care provider, emergency responder or as employed by a business with fewer than 50 employees if providing the leave would affect the employer’s ability to continue as a “going concern” (i.e. not financially viable). Also applies to employees of governmental agencies of any size.

Available for all employees of covered employers (defined above), regardless of the employee’s length of service.

Covered Events

If the employee is unable to work or telework because:

  1. Employee is subject to a Federal, State or local quarantine or isolation order related to COVID-19; 
  2. Employee has been advised by a health care provider to self-quarantine due to COVID-19 concerns; 
  3. Employee has been experiencing COVID-19 symptoms and are seeking a medical diagnosis; 
  4. Employee is caring for an individual (i.e., not limited to a family member) subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns; 
  5. Employee is caring for a son or daughter if the child’s school or day care is closed or the child’s care provider is unavailable due to public health emergency (same basis as Emergency FMLA – see above); or 
  6. Employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.


  1. Full-time employee is entitled up to 80 hours of paid sick leave, while part-time employees are entitled to be paid for the number of hours per day they worked on average over the prior two-week period.
  2. Sick leave taken for reasons (1)-(3) in “Covered Events” above (COVID-19-related self-care) paid at the employee’s regular rate, with maximum paid leave of $511/day ($5,110 in total). Sick leave taken for reasons (4)-(6) above (care for others and other government specified conditions) paid at two-thirds (2/3) the employee’s regulate rate, with maximum paid leave of $200/day and $2,000 in total. 
  3. This emergency sick leave is in addition to any company-provided or statutory sick leave, and employees have the option to take emergency sick leave before any other sick leave available to them. However, emergency paid sick time shall not carry over from one year to the next.
Prohibition Against Employee Requirement to Use other Paid Sick Time

Employer may not require employee to use other paid leave under an employer policy before the employee uses the paid sick time under the Act.

Other Compliance Obligations and Refundable Tax Credits



Employee Notice Obligation The employee must provide as much notice of the need for leave as practicable. 
Job Restoration at End of Leave

For up to 12 months following earlier of (1) the end of leave or (2) the date when the need related to a public health emergency ends, the employer must make reasonable efforts to restore employee to a position equivalent to the position the employee held when the leave commenced (equivalent employment benefits, pay, and other terms and conditions of employment).  

Exception to Job Restoration Employer with fewer than 25 employees may be exempted if (1) the employee was on leave due to a public health emergency or (2) the employee’s position no longer exists due to economic conditions or other changes in the operating conditions of the employer that affect employment.

Effective Date

A date specified by the Secretary of Treasury not later than 15 days after enactment (i.e. April 2, 2020) until December 31, 2020.

Refundable Tax Credits

Paid leave under the Acts (both paid sick and emergency family) is not subject to Social Security, but is subject to Hospital Insurance taxes. Non-governmental employers that comply with the Acts can apply for tax credits applied against their Social Security taxes in the amount of 100% of the paid leave wages paid pursuant to the Acts each calendar quarter. In addition, amounts equal to Hospital Insurance taxes on the paid leave wages and the allocable cost of employer-provided group health plan coverage during the paid leave period can also be claimed as tax credits against Social Security taxes. 

Employees Covered by Collective Bargaining Agreement

Employer can make contributions to a multiemployer plan, provided employees can receive pay from such plan based on hours worked under the multiemployer collective bargaining agreement for paid leave taken under FMLA.

Notice Posting Employers must post a conspicuous notice related to employee rights for emergency paid sick leave. The Department of Labor will publish a model notice by next week. The Notice must be posted by April 2.
No Discrimination or Retaliation Prohibition against discharge, discipline, or any discrimination against employee who takes leave under the Act, files a complaint or institutes or causes to be instituted any legal proceeding under the Act. 

Emergency Unemployment Insurance Stabilization and Access Act of 2020




Allocates $1 billion in emergency administration grants to states in calendar year 2020, for processing and paying unemployment benefit claims: 

  1. Half of resources for states’ administrative costs, if they meet certain requirements (see “Eligibility,” below); and
  2. Half of resources for emergency grants for eligible states reporting 10% or greater unemployment claims over the same quarter in the previous calendar year.

Eligible states will receive full federal funding, versus states’ previous 50% share of costs, for extended unemployment benefits. Fully-funded extended benefits are increased from 26 to 52 weeks.


For category (1), above, states must:

  1. Require employers to notify employees that unemployment benefits are available at the time of separation from employment;
  2. Ensure unemployment applications and related application assistance is available in at least two of the following ways: online, via phone, or in person;
  3. Notify applicants when an application is received and is being processed, and if the application is unable to be processed, the state must provide information to the applicant to ensure their application is successfully processed.

Additional requirements for both (1) and (2) include states:

  1. Express commitment to maintain and strengthen access to the unemployment compensation system, in both initial and continued claims; and 
  2. Demonstrate steps it has taken or will take to ease claimants’ eligibility requirements and access to unemployment (like waiving work search requirements and the waiting period).

Effective Dates

A date specified by the Secretary of Treasury not later than 15 days after enactment (i.e. April 2, 2020) until December 31, 2020.

In addition to the above wage-specific provisions in the Families First Act, employer group health plans are also required to cover certain COVID-19 related costs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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