On March 18, the Families First Coronavirus Response Act (FFCRA) was signed into law. It includes several measures to mitigate the effects of the COVID-19 outbreak, including a paid sick leave requirement and expansion of the Family and Medical Leave Act (FMLA). Both measures affect employers with fewer than 500 employees, though sick leave allowances may be made for those with fewer than 50 employees in particular situations. The new law also includes tax credits for employers to cover the cost of paid sick or FMLA leave.
The paid sick time requirement included in FFCRA includes 80 hours of pay for full-time employees for sick leave due to coronavirus quarantine or care. For part-time employees, the number of paid sick leave hours will equal the average hours worked over a two-week period.
Employees who are sick or quarantined themselves receive full regular pay with a cap of $511 per day. Employees who are caring for a sick family member or a child when care is not available due to COVID-19 receive two-thirds of their regular pay with a maximum of $200 per day.
The law gives the secretary of labor the authority to exempt employers with fewer than 50 employees in special cases.
There are questions regarding how this emergency leave will work with existing employer-paid leave, and guidance is expected in the coming days. But we do know what when the law takes effect on April 1, employers cannot force employees to use other accrued paid leave before the emergency paid sick leave provided under FFCRA.
Emergency Family and Medical Leave Expansion Act
This act of FFCRA temporarily decreases the length of employment required to qualify for FMLA leave to 30 days and expands the definitions of qualifying need to include care for a child when school or child care is closed due to COVID-19.
Employers will be required to meet the rate of pay requirements during FMLA leave after the first ten days. The rate of pay is two-thirds regular pay up to $200 per day, and the hours would be equal to the employee’s normal schedule. The law provides guidance on calculating hours for employees with a varying schedule.
Job restoration is required under FFCRA, however, employers with fewer than 25 employees may be exempt if the job no longer exists due to COVID-19. The employer must make an attempt to find equivalent work or call the employee back to work if the job becomes available again within a year.
Payroll Tax Credit
FFCRA provides employers with a tax credit to reimburse employers dollar-for-dollar for expenses related to the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. Health insurance costs are also included in the credit.
On Friday, the Treasury Department, IRS, and DOL announced they are working on providing guidance for taking advantage of the tax credit. It will involve retaining a portion of payroll taxes rather than depositing them with the IRS. If FFCRA expenses are greater than payroll tax liability, the employer will have the ability to apply to the IRS for reimbursement for the remainder.
- Congress.gov H.R.6201 – Families First Coronavirus Response Act Text
- Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave
- DOL Temporary Rule: Paid Leave under the Families First Coronavirus Response Act (4/1/20)
- U.S. Small Business Administration Disaster Assistance
- Inova payroll COVID-19 Resources