On March 18, 2020, Congress passed the Families First Coronavirus Response Act, H.R. 6201 (Act). President Trump quickly signed the bill into law Wednesday evening. The Act will now take effect in fifteen days and will expire on December 31,

The Act responds to the novel COVID-19 outbreak by providing paid sick leave and free COVID-19 testing, expanding food assistance and unemployment benefits and requiring employers to provide additional protections for healthcare workers. Below is a summary of the employer related provisions, which are retroactive to January 19.

Of the Act’s provisions, most relevant to employers are its temporary guarantees of Emergency Paid Family Leave and Emergency Paid Sick Leave. These provisions ONLY pertain to employers with fewer than 500 employees, though the Secretary of Labor is authorized to exclude from coverage certain healthcare providers and first-responders from the definition of eligible employees. The Secretary of Labor can also exempt small businesses with fewer than 50 employees if the Act’s provisions would “jeopardize the viability of the business.”

The Act makes clear that the “paid” components of both provisions will ultimately be funded by the federal government. Although employers will be initially fronting this money to workers who claim these benefits, ALL expenses will be fully reimbursed by the federal government in the form of a refundable tax credit that counts against the employer’s quarterly payroll tax. Those whose costs more than offset their tax liability will receive a full refund of the difference from the IRS.