Clarity for Employers: FFCRA Quick Facts Sheet

This week we saw new legislation roll out, protecting those employed by small and mid-sized businesses during the COVID-19 epidemic. The legislation also provides a fully-reimbursable federal employment tax credit to employers. Thus, the purpose of the tax credit is to cover the expense incurred by implementing the Families First Coronavirus Recovery Act (FFCRA).

Families First Coronavirus Response Act : Quick Facts for Businesses

The following is a sheet of quick facts reviewing the important aspects of the Families First Coronavirus Response Act (FFCRA).

  • The FFCRA was enacted on March 18, 2020.
  • FFCRA covers free COVID-19 testing, reinforces FMLA, establishes tax credits for small businesses, and increases funding for federal Medicaid. 
  • FFCRA sections include:
    • A. Appropriations
    • B. Nutrition waivers
    • C. Emergency FMLA expansion <<<
    • D. Emergency unemployment insurance resources
    • E. Emergency Paid Sick Leave Act <<<
    • F. Health provisions to expand COVID-19 diagnostic testing
    • G. Tax credits for paid sick and paid family leave <<<
  • These quick facts focus on sections C, E, and G, which affect employer operations.
  • The FFCRA will go into effect by April 2, 2020, and is set to expire on the final day of 2020.
  • The FFCRA will impact employers with fewer than 500 employees
  • Exceptions to the FFCRA include certain healthcare providers and emergency responders, and small businesses with fewer than 50 employees whose business would be at risk of closure due to carrying out the mandates of the FFCRA.
  • The FFCRA will affect employees who are part of a workforce with fewer than 500 employees in the following ways: 1) employers are required to provide paid sick and family leave to employees affected by COVID-19, and 2) the FFCRA considers additional reasons for which employees may take leave under FMLA.
  • Employers who provide paid sick and family leave will be eligible for corresponding tax credits.

Section C. – Emergency Family Medical Leave Expansion Act

  • This act applies to employers with up to 500 employees, however certain businesses with fewer than 50 employees may be exempt.
  • The method to apply for and determination of exemption is yet to be determined by regulations.
  • Employees must have been employed for at least 30 calendar days in order to be covered under the FFCRA or the FMLA expansion.
  • Under the FFCRA or the FMLA, employees may take up to a total of 12 weeks of job-protected leave.
  • Exceptions to the Emergency FMLA Expansion Act include employers with fewer than 25 employees who must eliminate an employee’s position due to a public health emergency.  Should that happen, the employer is required to either 1) make a reasonable effort to replace the employee’s position with a comparable alternative, or 2) make reasonable attempts over the course of 12 months to rehire the employee into a comparable open position.
  • Eligible employees may take leave for qualifying reasons related to a public health emergency, including care for a minor child (under 18 years of age) whose school or daycare is closed.
  • The first 10 days of leave can be unpaid, or the employee may opt to use accrued benefit time (vacation, sick, personal, PTO, etc.), however the employee may not be forced to use accrued time.  For the remainder of leave, the employer must pay the employee a minimum of 2/3 of the employee’s normal rate of pay.  The pay rate would be calculated at the normal number of hours the employee works, or the average number of hours worked over a six-month period.
  • Paid leave is capped at $200 per day, up to $10,000 in total.
  • Employers who pay sick time and leave under the FFCRA or FMLA expansion are eligible for a tax credit to offset the costs of covering employees.
  • Both the FFCRA and FMLA expansion will remain in place through the remainder of 2020.

Section E. – Emergency Paid Sick Leave Act

  • This act applies to employers with up to 500 employees, however certain businesses with fewer than 50 employees may be exempt.
  • The method to apply for and determination of exemption is yet to be determined by regulations.
  • All employees, working for eligible employers, are eligible for paid sick leave, regardless of duration of time working for the employer.
  • Full-time employees may receive up to 80 hours of paid sick time, while part-time employees may receive paid sick time equal to the average of hours worked over a two-week period.
  • Employees are entitled to paid sick leave if they are unable to work or work remotely due to the following circumstances:
    • They are under a COVID-19 quarantine or isolation order.
    • They have been advised by a healthcare provider to self-quarantine, due to COVID-19-related concerns.
    • They are seeking medical diagnosis due to symptoms of COVID-19
    • They are caring for someone who is isolated or quarantined.
    • They are caring for a minor child (under 18 years of age), due to school or daycare closures for COVID-19 precautions.
    • “Experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.”
  • For employees who fall under circumstances 1-3, paid leave is capped at 100% of an employee’s regular compensation, up to $511 per day, and $5,110 for the duration of leave.  
  • For employees who fall under circumstances 4-6, paid leave is capped at 2/3 of normal wages, up to $200 per day, and $2,000 for the duration of leave.  
  • Emergency Paid Sick Leave is provided in addition to the employer’s regular sick leave benefits, although the employer may not force an employee to exhaust existing accruals first. 

Section G. – Tax Credits for Paid Sick and Paid Family Leave

  • Under the FFCRA, non-government employers will be eligible for a refundable federal employment tax credit equal to (but not more than) the amount paid for sick time and family leave.  Paid FMLA limits are $200 per day, and $10,000 total for all calendar quarters.
  • Employers may receive reimbursement even if the amount paid out in emergency sick leave is more than their tax liability.
  • The employer’s tax credit increases correspondingly with employers paying for an employee’s health insurance while the employee is out on sick or family leave.
  • FFCRA-mandated emergency paid sick and family leave are not subject to employer-paid Social Security taxes.  
  • All tax credit provisions under FFCRA will expire on December 31, 2020.

*Expect to see labor law posters distributed from the Department of Labor, once available.

FFCRA Clarity during Confusing Times

Hopefully this handy little sheet will provide some clarity you’ve been seeking during this confusing time. Finally, remember you are not alone. We hope to be a trusted resource for your business needs, and that you will look to us when in doubt.

Note: The FFCRA Quick Facts Sheet will be updated as we receive new information.

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This is not meant to provide legal counsel or advice. Every situation is different. Please contact an HR professional or employment attorney before taking any action.

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