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Family First Coronavirus Response Act (FFCRA)

April 24, 2020

In the wake of the novel coronavirus outbreak that began in February in the US, the Department of Labor issued the Family First Coronavirus Response Acts (FFCRA) aimed at helping businesses owners and employees weather the financial and health burdens of COVID-19. This is a temporary provision that is set to apply from April 1, 2020 through the remainder of the 2020 calendar year. The following article outlines the key FFCRA provisions for small to medium sized businesses related to paid leave and the available tax credits for employers.

Note: Find out more about tracking COVID-19 related leave with Virtual TimeClock.

Employers who are covered by FFCRA
Generally, the paid sick leave and expanded family and medical leave provisions of the FFCRA apply to private employers with fewer than 500 employees and certain public sector companies.

Paid Leave under FFCRA
The Families First Coronavirus Response Act provides several expansions to paid sick leave offered to employees with the Emergency Paid Leave Sick Act and expansions to the existing FMLA leave laws.

Emergency Paid Sick Leave Act (EPSLA)

    • Two weeks (up to 80 hours) of paid sick leave provided at the employee's standard rate of pay.
      • Qualifications: the employee is unable to work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis.

OR

    • Two weeks (up to 80 hours) of paid sick leave provided at two-thirds the employee’s standard rate of pay.
      • Qualifications: the employee is unable to work because of a genuine need to care for an individual subject to quarantine, or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19 and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services.

Expanded Family and Medical Leave Act (FMLA) 

    • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay.
      • Qualifications: an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Payroll Tax Breaks
The FFCRA provides a tax credit to small business employers to help cover the required payments to workers who take time off under the leave provisions as outlined above. Employers can collect a tax credit equal to 100% of qualified sick leave and FMLA leave payments made to employees following the FFCRA provisions. Tax credit will only cover time off payments made between April 1, 2020 through December 31, 2020. The following information can be found on the IRS website:

"The Eligible Employer is entitled to a fully refundable tax credit equal to the required paid sick leave.  This tax credit also includes the Eligible Employer’s share of Medicare tax imposed on those wages and its allocable cost of maintaining health insurance coverage for the employee during the sick leave period (qualified health plan expenses). The Eligible Employer is not subject to the employer portion of social security tax imposed on those wages."

The information included in this blog is meant for informational purposes only. Please consult a tax and payroll professional for specific advice about the FFCRA provisions outlines above. Additional details can be found on the DOL website: Families First Coronavirus Response Act: Employee Paid Leave Rights

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