Families First Coronavirus Response Act: Michigan Builders License

The Families First Coronavirus Response Act created significant compliance challenges for construction employers and building contractors, who often have complex workforce arrangements including full-time employees, part-time workers, seasonal staff, and subcontractors. Michigan construction companies with fewer than 500 employees—the vast majority of residential and commercial builders—were covered by the FFCRA's paid leave requirements. This meant they were obligated to provide up to 80 hours of emergency paid sick leave and up to 12 weeks of expanded FMLA for qualifying COVID-19 reasons. Accurately determining employee headcount was especially important given the use of multiple affiliated entities and seasonal workforce fluctuations common in construction. Employers also had to navigate project-specific impacts when key workers—including those holding Michigan builders licenses—took FFCRA leave during active construction phases. HR professionals supporting Michigan construction businesses needed to understand both the federal FFCRA framework and any applicable Michigan state executive orders issued during the pandemic.

Yes, the FFCRA provided a small business exemption allowing employers with fewer than 50 employees to deny childcare-related leave if providing it would jeopardize business viability. For small construction contractors and residential builders—particularly sole proprietors and small subcontractors common in Michigan's building trades—this exemption had direct practical relevance. To qualify, the employer had to document that one of three specific hardships existed: the leave would cause expenses exceeding revenues and threaten business cessation; the employee's absence would create a substantial risk to financial health due to specialized skills or knowledge; or the employer lacked sufficient workforce to continue services. Critically, this exemption applied only to childcare-related FFCRA leave—not to emergency paid sick leave taken by an employee for personal COVID-19 illness, quarantine, or symptoms. Employers invoking the exemption needed to maintain documentation supporting their determination, as the DOL could request evidence that the exemption was properly applied. Many small construction firms found this exemption valuable during periods of peak project activity.

Unlike office environments where remote work could partially offset absences, construction work is inherently site-specific—an employee absent due to FFCRA leave could not perform their duties remotely, creating direct gaps in project staffing that affected schedules and contractual commitments. For general contractors managing multiple trades and subcontractors, FFCRA absences required contingency planning at both the workforce and project levels. HR and project management teams needed to identify which positions were irreplaceable in the short term—particularly licensed roles such as Michigan residential builders or maintenance and alteration contractors—and develop backup strategies in advance. Subcontractor relationships added further complexity: general contractors' FFCRA obligations extended only to their direct employees, not subcontractor workforces, but project delays caused by subcontractor FFCRA absences still affected overall schedules. Contractors that proactively cross-trained workers, maintained qualified staffing partner relationships, and incorporated FFCRA leave scenarios into project risk planning were better positioned to absorb the workforce disruption.

Employees holding active Michigan residential builders licenses or maintenance and alteration contractors licenses often occupy critical compliance roles on job sites—certain work is legally required to be performed or supervised by a licensed individual under Michigan's Occupational Code. When a licensed employee takes FFCRA leave, the construction employer must assess whether affected work can legally proceed in the employee's absence, or whether certain project activities must pause. Failing to have a licensed supervisor present for regulated work could expose the contractor to licensing violations, insurance complications, and contract disputes. HR teams needed to coordinate with project managers and operations leadership to flag positions carrying licensure dependencies and to plan for coverage during extended leave. From a documentation standpoint, FFCRA leave for licensed employees required the same records as any other employee—leave dates, qualifying reason, pay rates, and supporting documentation—all retained for at least four years to support potential IRS tax credit verification.

During the COVID-19 pandemic, Michigan Governor Gretchen Whitmer issued a series of executive orders that directly affected construction employers, in some cases imposing obligations that went beyond federal FFCRA requirements. Early executive orders suspended non-essential construction activities entirely for a period, followed by phased reopening requirements tied to safety protocols. Construction employers were required to comply with both the federal FFCRA leave mandates and any applicable Michigan state orders simultaneously—meaning HR and operations teams had to monitor two evolving regulatory frameworks at once. Where state orders provided greater employee protections than federal law, the more protective standard applied. Michigan employers also had to navigate Michigan's own paid medical leave requirements under the Earned Sick Time Act, which pre-dated COVID-19 and remained in effect throughout the pandemic. For HR professionals supporting Michigan construction businesses, the layering of federal FFCRA obligations, Michigan executive orders, and existing state employment law created a complex compliance landscape requiring careful, ongoing attention.