Families First Coronavirus Response Act
The Families First Coronavirus Response Act (FFCRA) requires employers to provide sick leave, paid family and medical leave, in addition to tax credits for the paid leave and expanded unemployment insurance.
What types of businesses have to comply?
- Businesses with less than 500 employees
However, businesses with less than 50 employees may apply for an exemption from the Secretary of Labor with an explanation of how providing paid leave would jeopardize the business.
Emergency Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) is expanded under FFCRA and requires employers with less than 500 employees to provide workers with up to 10 weeks of paid FMLA with two weeks unpaid. This outlines:
- Up to 12 weeks of FMLA leave for employees
- The first 10 days of leave may be unpaid leave. Employees may use accrued vacation days or other paid leave to cover those days.
- For the subsequent days, workers are entitled to two-thirds pay, capped at $200 per day and $10,000 total.
Which employees are eligible?
- On the job for at least 30 days
- Subject to federal, state or local quarantine order
- Advised by health care provider to self-quarantine
- Caring for individual subjected to self-quarantine
- Caring for a child whose school or place of care is closed
- Experiencing COVID-19-like symptoms
Emergency Paid Sick Leave Act
Created under the FFCRA, the Emergency Paid Sick Leave Act (EPSLA) requires employers with less than 500 employees to offer paid sick leave to eligible employees. Full-time employees can receive up to 80 hours of paid sick leave and part-time employees can receive pay based on the average number of hours worked in a two week period. Emergency paid sick leave is offered in addition to any existing sick leave and/or paid time off that is already offered by an employer. The Act is effective from April 1 to December 31, 2020.
Employees who are eligible to receive sick leave at the regular rate will be capped a $511 per day and $5,110 total. Employers may claim the Paid Sick Leave Credit to cover these paid leave costs. Employees must be:
- Subject to a coronavirus quarantine or isolation order
- Advised by a health care advisor to self-quarantine due to coronavirus concerns
- Experiencing coronavirus symptoms and is seeking a medical diagnosis
Employees who are eligible to receive sick leave at the ⅔ rate will be capped at $200 per day and $2,000 total. Employers may claim the Child Care Leave Credit to cover these paid leave costs. Employees must be:
- Caring for an individual subject to quarantine order or self-quarantine restrictions
- Caring for a child whose school or childcare is closed or unavailable
- Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Records needed for paid leave benefits
- Name of employee requesting leave
- Date(s) for which leave is requested
- Reason for leave
- Statement from the employee that he or she is unable to work because of the reason
- Name of the government entity that issued a quarantine or isolation order that affects an employee
- Name of the health care provider that is advising an employee to self-quarantine
- For employees that must leave to care for a child, may document the name of the child, name of the school or place of care, and a statement from the employee that no other suitable person is available to care for the child
Tax Credits for Employers
The Paid Sick Leave and Child Care Leave Tax Credits are refundable payroll tax credits to immediately reimburse employers for the cost of providing coronavirus-related leave to their employees. Employers receive 100% reimbursement for paid leave, including health insurance costs. Employers will not face a payroll tax liability. Self-employed individuals may also receive an equivalent credit. For more information, visit the IRS.