Families First Coronavirus Response Act

Today, we take time to address pending legislation related to Covid-19 pandemic that will likely carry significant impacts for all businesses but in particular, small business. The Congress, at least in the House, has passed the Families First Coronavirus Response Act aimed at providing relief for employees impacted by the coronavirus, while it the legislation is well intentioned, it does carry significant financial obligations for small businesses. Statutes and executive orders like these will likely be bouncing around for the next several weeks as the Nation navigates the Covid-19 pandemic.

As always, if you have any questions about your real estate, business, estate planning, or any other legal issue, please let us know by e-mailing managing shareholder Keith Dunnagan at kbdunnagan@bpelaw.com.

Also, remember that we do legal presentations for business and community organizations. If your group would like to schedule a presentation, please contact me to setup a date and time.

Families First Coronavirus Response Act (H.R. 6201)
By: D. Keith Dunnagan, Esq. and Adem A. Balikci, Esq.

It is no secret that the World Health Organization has declared the Covid-2019 a pandemic and both the State and Federal Governments have responded by declaring a state and national emergencies. Through this the Government is allocating funds to the current Covid-19 health concern. Further, last week, Congress began to tackle issues related to current employment that will have implications on all businesses. The FFCA that was passed by the U.S. House of Representatives on March 14, 2020, (President Trump has indicated that he would sign the legislation, however, before that can happen the Senate will have to pass the legislation, which at the time of the writing of this article had not happened) brings new obligations to employers by extending employee sick leave benefits and allowing the employees who have been affected by the Coronavirus to take emergency paid leave.

Emergency Paid Leave Act of 2020 (“EPLA”)

An individual who is unable to work due to one of four qualifying reasons related to COVID-19 may be able to take EPLA. The Code identifies the four qualifying reasons as follow:

* The worker has a current diagnosis of COVID-19.

* The worker is quarantined (including self-imposed quarantine), at the instruction of a health care provider, employer, or government official, to prevent the spread of COVID-19.

* The worker is caring for another person who has COVID-19 or who is under a quarantine related to COVID-19.

* The worker is caring for a child or other individual who is unable to care for themself due to the COVID-19-related closing of their school, childcare facility, or other care program.

Employees who have been employed for 30 days may receive a benefit for a month (up to three months) in which they must take 14 or more days of leave from their work due to the qualifying COVID-19-related reasons. Days when an employee receives pay from their employer such as regular wages, sick pay, or other paid time off, or unemployment compensation do not count as leave days for purposes of this benefit. The first two weeks of the leave can be unpaid, although employees may elect to use other paid benefits to cover the first two week. The remaining time must be paid at 2/3 the employee’s regular rate, subject to potential qualifying exemptions. One of the main exemptions that is targeted towards small business is the potential exemptions of having to pay the extended leave. Under the proposed statute, if passed, the Secretary of Labor will be charged with creating rules to exempt small businesses with fewer than 50 employees from the above requirements, the caveat is that the exemption would be based on whether the business viability would be jeopardized if compliance was required. It remains to be seen what those rules will look like and how they will be enforced.

Additional Sick Leave

FFCA requires employers with less than 500 employees to provide 80 hours of paid sick leave for people who become infected with the coronavirus or have to care for someone who is, as well as people who are quarantined or whose place of work or children’s school is closed due to coronavirus. If the employee is a full-time employee. The sick leave is pro-rated for part time employee based upon the typical number of hours they would work in a two week period. It also would provide a tax credit for businesses and self-employed individuals to cover sick leave.
The paid sick leave required under the bill must be provided in addition to whatever the employer already provides. Paid sick leave must be provided at the employee’s regular rate of pay, unless the employee takes the leave to care for or assist a family member of the employee who:

Is self-isolating because such family member has been diagnosed with coronavirus;

Is experiencing symptoms of coronavirus and needs to obtain medical diagnosis;

A public official or a health care provider makes a determination that the presence of the family member in the community would jeopardize the health of other individuals in the community because of the exposure of such family member to the coronavirus, or exhibition of symptoms of coronavirus by such family member; or

To care of such employee if the school or place of care has been closed, or the childcare provider of such child is unavailable, due to coronavirus, in which case it can be paid at 2/3 the regular rate.

Payroll Credit for Required Paid Sick Leave

The FFCA provides a refundable tax credit equal to 100 percent of qualified paid sick leave wages by an employer. For amounts paid to those employees who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to coronavirus the amount of qualified sick leave wages considered for each employee is capped at $511 per day. For amounts paid to employees caring for a family member or for a child whose school or place of care has been closed, the amount of qualified sick leave wages considered for each employee is capped at $200 per day. There is still much to learn about this tax credit and how or whether it will actually provide relief for small businesses. If you are a small business owner, you should be communicating with your tax professional to determine what compliance steps you may need to take if this bill becomes law.

It is without a doubt that this new law puts a huge burden on the shoulders of small businesses. The law is complicated and has more components to it. Should you have any questions, attorneys at BPE Law Group are here to respond to your questions.


The attorneys of BPE Law Group, PC. have been advising our clients on real estate, business and estate planning issues for over 20 years and have assisted numerous clients in probate, business and real estate matters and have represented and advised brokers on their professional obligations as well as consumers on their rights. If you have questions concerning legal matters, give us a call at (916) 966-2260 or e-mail Keith at kbdunnagan@bpelaw.com. Our flat fee consult for new clients may get you the answers you need for the questions you have.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.