COVID-19 Client Alert: FFCRA, CARES Act and Employment

April 1, 2020

Knowledge

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Wright Lindsey Jennings

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Knowledge

The Families First Coronavirus Response Act (FFCRA) and the CARES Act provide significant COVID-19 related federal employment benefits. Beginning April 1, 2020, FFCRA requires private employers with 500 or fewer employees and public employers to provide paid leave in certain circumstances. First, for qualifying reasons such as an employee who contracts COVID-19 or is under a government or physician-ordered quarantine (and cannot telework), the employee is entitled to 2 weeks leave at full pay, subject to a daily cap of $511. Second, employees who are unable to work (and cannot telework) due to school closures or unavailability of childcare are entitled to 12 weeks paid leave at 2/3 their normal pay rate, subject to a $200/day cap. Employers with fewer than 50 employees may be able to obtain an exemption from the paid leave requirements. Like other federal employment laws, the FFCRA includes a non-retaliation provision.

Employers must post a new Department of Labor (DOL) poster providing notice of the new leave benefits. If a company has employees working remotely, the notice must be emailed and/or placed on the company’s website. Links to the poster and a DOL FAQ about the poster can be found below.

The DOL has provided answers to some but not all of the questions raised by the FFCRA—including whether the new leave can be taken intermittently (only with employer permission) and whether the paid leave must be provided in the event of a business closure or furloughs (generally no, except for leave taken prior to the closure/furlough). However, pursuant to FFCRA amendments in the CARES Act, employees who are rehired after closure or furlough may be entitled to certain of the paid leave benefits upon rehire.

The paid leave that private companies must provide under the FFCRA is fully reimbursable, and the IRS has stated that an immediate dollar-for-dollar tax offset against payroll taxes will be provided. Also see our firm’s detailed summary of the Payroll Protection Program established by the CARES Act.

The CARES Act expands unemployment benefits in a number of ways, including duration and benefit amount. Additionally, the Act provides unemployment benefits for previously ineligible individuals like the self-employed and independent contractors. More detailed information is provided in the previously referenced CARES Act summary. Expansion of unemployment benefits has also occurred at the state level in Arkansas, including waiver of the 7-day waiting period and reemployment activities requirements. A Department of Workforce Services hotline has been created to handle the overwhelming number of claims/inquiries, but delays in claims processing are expected.

Keep in mind that many other long-standing employment laws may impact employer decision-making during the public health emergency. These include the Warn Act (layoffs), OSHA (employee safety), and wage and hour law (for example, where hourly employees are working remotely or where salaried employees’ hours are reduced). Additionally, employees who contract COVID-19 may be entitled to protected leave and/or other accommodations under the Family and Medical Leave Act and the Americans with Disabilities Act.