Background Screening Companies: New Applicable Paid Leave Laws Due to Covid-19

With theFamilies First Coronavirus Response Act (FFCRA) going into effect as of April 1, 2020, the employment screening industry should think about how they might prepare for any financial and staffing disruptions.

Aside from abiding solely to a limited hardship exception befitting companies with less than 50 employees, what does the FFCRA provide for employment background screening firms with 500 or less employees? For the ensuing period (April 1, 2020, to December 31, 2020), FFCRA provides for two paid leave mandates covering specified COVID-19-related concerns.

Based on the Emergency Paid Sick Leave Act (EPSLA), paid leave benefits are accessible for a maximum of 80 hours and as many as 10 weeks within the framework of the Emergency Family & Medical Leave Expansion Act (E-FMLA). These provisions are contingent upon caps on a per employee premise.

Additionally, you can offset eligible payments under each segment of the FFCRA on a dollar-for-dollar tax credit basis on your quarterly payroll tax submissions. Even so, only payments you make within the scope of the FFCRA may be eligible for tax credits.

In a similar step, the Department of Labor (DOL) has issued decrees under the FFCRA indicating it doesn’t plan on commencing any enforcement measures under the FFCRA for 30 days. Nonetheless, compliance is compulsory as of the start of April, 2020.

Also, several states and localities have put in place laws to extend or create leave (either paid or unpaid) privileges for employees.

Here’s a recap of the FFCRA’s core provisions.

Employment Screening Firms Covered by the FFCRA

Adhering to the FFCRA terms, these regulations won’t apply if your background screening company has 500 or more employees. If so, you’ll need to abide by specific applicable state and local laws, as well as unpaid leave provisions listed under the FMLA, alongside the existing company leave policies.

But what if you have less than 500 employees and accept that your background screening venture is an “integrated enterprise” constituting part of another company—domestic or foreign parent or else fellow subsidiary company? Then, you can reason that your venture isn’t within reach of the FFCRA.

Nevertheless, you could encounter significant negative implications after admitting to being an “integrated enterprise” according to existing employment guidelines. These will include accountability for violations ensuing from all entities under the “integrated enterprises” business ecosystem. As such, you should carefully weigh your decision before you opt-out of the FFCRA.

Electing to utilize the “integrated enterprise” theory should only arise after consulting your legal department. Also, this consideration should bear in mind eligible payments under the FFCRA typically have to be offset by payroll tax credits.

Which Eligibility & Paid Leave Perks Does EPSLA Afford Employers?

As one component of FFCRA, EPSLA provides for up to a maximum of 80 hours paid leave (accordingly prorated for part-time employees). Furthermore, this provision applies to all your employees (if you have less than 500 employees) notwithstanding their length of service. Hence, each personnel of your firm is eligible for EPSLA from the onset of the subject’s employment.

EPSLA provides for paid sick time for your employment screening workers when they’re unable to work (or incapable of teleworking) under any of these COVID-19 related concerns:

  1. Employee’s subject to federal, state, or local quarantine/isolation decree linked to COVID-19.
  2. Employee under instructions from a health service provider to self-quarantine.
  3. Subject’s experiencing COVID-19 symptoms and seeking medical diagnosis.
  4. Employees taking care of individuals who (i) are under orders to self-quarantine, or (ii) notified to self-isolate or quarantine.
  5. Personnel caring for their children whose education institutions or place of care is closed. Or if your paid childcare service provider is unavailable owing to COVID-19 associated reasons.
  6. Workers exhibiting any other conditions of a similar nature as stipulated by the Health and Human Services (HHS) secretary after consultation with their Labor and Treasury counterparts.

On the premise of eligibility, an employment screening employee will only get paid leave benefits of not more than 80 hours under the EPSLA provisions. Furthermore, the employee is eligible to utilize this perk before any other potentially available paid leave time off.

The EPSLA benefits do have an upper limit based on $511 per day for each qualifying employee. Events 1-3 above are computed according to the worker’s regular pay rate and alternatively at $200/day for qualifying provisions satisfying events 4-6 above. Accordingly, the EPSLA arrives at the latter amount after taking into account two-thirds of the employee’s standard pay rate.

Under DOL guidelines, besides satisfying the provisions of having fewer than 50 employees, an officer from such an enterprise can self-certify if the leave request relates to a child-care event only; or applies to one of these criteria’s:

  • Provision of paid medical leave or extended family or sick leave, would lead to a venture’s expenses and financial obligations surpassing accessible business revenues. Else, may cause the employment screening firm to cease operating or work at a minimal capacity.
  • Absenteeism of the employee(s) requesting paid sick leave or extended family or medical leave may bring about substantial concerns relating to the financial health or operational capacity of the employment screening company. Mostly, this takes into consideration the specialized skills, business knowledge, or responsibility of the employee(s).
  • This provision also considers the replacement worker’s availability both in terms of time and location. Thus, enabling them to perform the aforementioned tasks and allow the subject(s) to take sick leave without significantly affecting the minimum operational capacity of the company.

Eligibility and Paid Sick Leave Benefits Provided for by the E-FMLA

E-FMLA caters to the type of paid leave perks made available by the FMLA and explicitly pertaining to COVID-19 childcare events. This provision covers employees unable to work or telework because they need to provide care for minors (more so if the child(ren) care provider is unavailable). Or else, if the child(ren’s) place of care or education institution is closed or inaccessible as a result of public health-related concerns.

Akin to the EPSLA, background screening companies can access benefits extended by E-FMLA until December 31, 2020. As with all other FMLA-related reasons, personnel with their own underlying health issues or workers providing care for family members with critical health conditions, the current unpaid leave prerequisites of the FMLA remain in effect.

Besides, leave is only available to personnel who’ve been under your employment for at least 30 days regardless of the number of workers you employ within a 75-mile radius. These FMLA & E-FMLA qualification provisions expand on the traditional eligibility thresholds.

Yet, when you look at the benefits, E-FMLA skips providing for leave payments for the first 10 days—factoring that EPSLA benefits are available to cater for that period (as discussed under qualifying factor 5 above).

After the initial 10 days, and for the ensuing 10 week period provided for by E-FMLA, leave payment must not exceed a two-third fraction of the employee’s standard pay rate with an upper limit of $200/day or $10,000 on aggregate.

Meanwhile, according to DOL guidelines, if your employee uses up all or a substantial portion of their 12 weeks FMLA eligibility ceiling, after that, they can only use the remaining portion for E-FMLA purposes.

An identical hardship exemption like the one available to background screening firms with under 50 employees are considered in the provisions of EPSLA and is also accessible under E-FMLA.


Even if short-lived (applicable for the balance of 2020) the new FFCRA laws mandate several paid leave benefits. But as with most employment laws, background screening companies must expect to face various scenarios yet to be clearly addressed or expressly contemplated by the FFCRA.

As we face the challenges posed by the novel corona virus crisis, we take the time to inform our partners about the ever-changing industry regulation landscape to help you maintain compliance and also mitigate risk.

Established in 1995, File Finders has supported background screening companies for 25 years as the leading source of court and official records research in San Diego County.  Our ability to conduct on-site research and document retrieval services at criminal, civil and family court locations is what truly sets us apart from other wholesale screening providers. While San Diego is our area of origin, we also provide nationwide criminal and civil research services through a network of professional court researchers. Additional services include San Diego pre-screened criminal case research and official records research.  All services are customizable, scalable, and integrated with major platforms making us an excellent research partner for clients of every size.

Utilize File Finders for all your wholesale background screening needs. Get in touch today!

Note: It is the recommendation of File Finders to consult an employment attorney or qualified personnel familiar with local and statewide legislation before enacting the above recommendations to ensure you are meeting all FFCRA guidelines. As we are not attorneys, we cannot provide legal advice. We cannot act as your attorney, so make sure you’re consulting with a qualified employment attorney.

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