- The Family First Coronavirus Response Act was signed by President Trump on March 18, 2020. Since then, it has been periodically updated by the Department of Labor.
- The act implements coronavirus-related sick and family paid leave for workers in small and midsize businesses.
- It also includes two refundable payroll tax credits to help with the costs of providing paid leave.
The Families First Coronavirus Response Act (FFCRA) is a temporary ruling issued by the federal government requiring certain employers to provide their employees with paid sick leave and expanded family and medical leave for covered reasons (listed below) related to COVID-19. The FFCRA includes the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Act (FMLA). This initiative is meant to help decrease the spread of coronavirus in the U.S.
What businesses are required to comply with the FFCRA?
Private sector businesses in the U.S. with less than 500 employees and public sector employees who meet specific criteria (outlined further below).
What must eligible employers provide employees?
Employees are allotted two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay. According to the Department of Labor (DOL), an employee qualifies for this provision if they are unable to work (or telework) because they:
- Are subject to a federal, state, or local quarantine order related to COVID-19
- Have been advised by a health care provider to self-quarantine because of a possible COVID-19 infection
- Are experiencing COVID-19 symptoms and are seeking a medical diagnosis (employees must seek medical advice to qualify in this scenario).
Employees are allowed to take two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay. The DOL states that an employee qualifies for this if they are unable to work (or telework) because of the need to care for:
- An individual under quarantine due to COVID-19.
- A child (under 18 years of age) whose school or care provider is closed or unavailable because of shutdowns or other closures imposed by COVID-19.
This provision also covers employees “that are experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.”
If you’re wondering what the nebulous term “substantially similar condition” means, the U.S. Department of Health and Human Services (HHS) has not yet identified as of this writing any “substantially similar condition” that would allow an employee to take paid sick leave under these guidelines. If HHS does identify any such condition, the Department of Labor will issue guidance explaining when you may take paid sick leave on this basis.
Provision #2 Expansion
In addition to the previous provision, the FFRCA allots 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay to care for a child whose school or care provider is unavailable due to mandated closures or stay-at-home orders. However, the expanded family leave provision only applies to employees who have been with the company for at least a month.
What’s the minimum/maximum amounts paid to employees taking leave?
Employees taking advantage of provision #1 are entitled to wages at either their regular rate or the applicable minimum wage, whichever is higher. They can be paid up to $511 per day and $5,110 in the aggregate (over a two-week period).
Employees who qualify for provision #2 are entitled to wages at two-thirds of their regular rate or two-thirds of the applicable minimum wage, whichever is higher. They can be paid up to $200 per day and $2,000 in the aggregate (over a two-week period).
Employees that are utilizing the provision #2 expansion are entitled to wages at two-thirds of their regular rate or two-thirds of the applicable minimum wage, whichever is higher. Including the two weeks allotted in provision #2, employees can be paid up to $200 per day and $12,000 in aggregate (over the cumulative 12-week period).
What about part-time workers?
Part-time workers are covered by the provisions. Pay-wise, they are eligible for the number of hours they work, on average, over a two-week period. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours or use the number of hours agreed upon at hiring.
How long is the temporary FFCRA ruling effective for?
FFCRA paid leave provisions took effect on April 1, 2020. It will end on December 31, 2020.
What about public sector organizations?
Generally, public sector employees qualify for paid sick leave (provision #1) if they work for a public agency or other unit of government. However, the Office of Management and Budget (OMB) has the authority to exclude some categories of U.S. Government Executive Branch employees from taking certain kinds of paid sick leave.
In terms of the provision #2 expansion, employees are generally eligible if they are an employee of a non-federal public agency. But if you are a federal employee, you likely are not entitled to expanded family and medical leave.
For more information regarding the exceptions, please consult the Office of Personnel Management’s COVID-19 guidance portal.
Are there any exemptions?
Businesses with less than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child if it would threaten the viability of the business.
Additionally, private and public sector employers of health care providers or emergency responders may elect to exclude such employees from eligibility for the leave provided under the Act. For clarification about who is considered a “health care provider” or “emergency responder,” check out the DOL’s recently issued guidance.
How does an employer pay for an employees’ sick or child care leave?
This initiative is reimbursed by the government. Employers who pay sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not enough payroll taxes to cover the cost of the sick and child care leave paid, employers will be able file a request for a refund from the IRS. The details of this process have not yet been announced.
What documentation do employers need to collect for the credit?
Employers need to collect the following:
- The name of the employee requesting leave
- The date(s) for which leave is requested
- The reason for leave
- A statement from the employee on why he or she is unable to work
- The government entity that issued the quarantine/isolation order*
- The heath care provider who advised quarantine*
- The name of the child being cared for*
- The name of the school, place of care, or child care provider that has closed or become unavailable*
- A statement from the employee that no other suitable person is available to care for the child.*
As of April 17, employers who violate the FFCRA are subject to enforcement actions by the DOL. However, the Act continues to evolve and receive additional guidance. Employers needing clarification should visit the DOL website and its FAQ page to understand the latest and ensure that they are in compliance to avoid penalties.