As the Coronavirus is affecting more and more businesses, federal, state, and local governments are putting orders in place and signing bills to help those in need.
On March 18, the Families First Coronavirus Response Act (FFCRA) was created to offer paid leave for workers and tax credits for employers that have been affected by COVID-19. This Act will be effective from April 1, 2020 to December 31, 2020 and applies to small and midsize businesses (under 500 employees). There are two sections of this Act that expands on Paid Sick Leave benefits and FMLA:
Emergency Paid Sick Leave Act
Who is eligible?
There are two groups of eligible employees:
(1) Employees who are unable to work because they are:
Subject to quarantine under federal, state, or local order or
Following advice from a health care provider to quarantine or
Experiencing COVID-19 symptoms and seeking a medical diagnosis
(2) Employees who are unable to work because they are:
Caring for an individual subject to quarantine under federal state, or local order or
Caring for a child (under 18 years old) whose school or childcare provider is unavailable due to reasons related to COVID-19 or
Experiencing any substantially similar conditions as specified by the Secretary of Health and Human Services
What are the benefits?
A full-time employee is eligible for up to two weeks (up to 80 hours) of leave while a part-time employee is eligible for the number of hours they work on average over a two-week period. Depending on which group the employee falls under in the above list, employee’s may receive their:
(1) Regular rate of pay and paid leave is capped at $511 per day and $5,110 for ten days (2) Two-thirds of their regular rate of pay and paid leave is capped at $200 per day and $2,000 for ten days
Emergency Family and Medical Leave Expansion Act
Who is eligible?
Employees who are unable to work because they:
Have been employed for at least 30 calendar days and
Need to care for a child whose school or childcare provider is closed for reasons related to COVID-19.
Small business who have less than 50 employees may be exempt from providing leave for employees who are unable to work due to a child’s school or childcare provided being closed if their leave would jeopardize the viability of the business.
What are the benefits?
Employees may receive up to two-thirds of their regular rate of pay for up to an additional 10 weeks. Paid leave is capped at $200 per day and $10,000 for the full 10 weeks.
Employers must offer employees unpaid leave, accrued paid leave, or paid vacation for 10 days before the employee can receive benefits.
Tax Credits for Employers
Employers will receive 100% reimbursement for paid leave related to the Act. In order to take immediate advantage of these credits, businesses can cover costs by keeping payroll taxes equal to the amount of paid leave, rather than deposit them to the IRS. There will be no payroll tax liability associated with this paid leave and a dollar-for-dollar tax offset will be provided against payroll taxes. If a refund is owed, you can file a request for accelerated payment and the IRS will send it as quickly as possible.
Additional Resources
This post is intended for educational purposes only. There are many nuances with this Act that may not have covered, and we encourage you to view the links below from Congress, Department of Labor, and the IRS to understand the full scope. If you have additional questions, we advise you speak with the person in charge of your payroll.
H.R.6201 - Families First Coronavirus Response Act (Congress.gov)
Families First Coronavirus Response Act: Questions and Answers (Department of Labor)
Families First Coronavirus Response Act: Employer Paid Leave Requirements (Department of Labor)
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