These are strange times. The nation is feeling the effects of the COVID-19 coronavirus, and individuals and business owners alike are left with feelings of fear and uncertainty. However, in an attempt to assist those affected by COVID-19, Congress introduced the Families First Coronavirus Response Act (FFCRA). On March 18, 2020, President Trump signed this legislation into law. The following will explain what this law means for individuals and businesses, and will aim to alleviate some of your economic concerns.
The FFCRA has various embedded Acts focused on those most affected by the virus. It provides free COVID-19 testing, more opportunities to receive unemployment benefits, and even an expanded budget for food assistance programs. For a more in-depth look at the Acts of the FFCRA, the following will serve to highlight pertinent information for both employees and employers:
Emergency Paid Sick Leave Act (EPSLA)
Employers with less than 500 employees are required to provide paid sick leave to employees that are unable to work (at the office or remotely) due to the following: 1) employee experiencing symptoms of the coronavirus (must also seek testing); 2) employee advised to self-quarantine by a healthcare provider; 3) employee subject to an isolation and/or quarantine executive order; 4) employee is providing care for an individual subject to isolation and/or quarantine; 5) employee is forced to provide daily care to their child(ren) otherwise provided by the child(ren)’s school and/or place of care due to coronavirus concerns; and 6) employee is suffering from similar symptoms to the coronavirus (as dictated by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor).
Emergency Family and Medical Leave Expansion Act (FMLA Expansion Act)
Imbedded in the FFCRA, the FMLA Expansion Act provides job-protected leave when an employee is forced to provide daily care to their child(ren), otherwise provided by the child(ren)’s school and/or place of care, due to coronavirus concerns. For an employee to be eligible for this benefit, said employee must have worked for their employer for at least 30 calendar days. Leave is unpaid for the first two weeks. After that, leave is paid at two-thirds of the employee’s regular rate.
The FMLA Expansion Act also applies to employers with less than 500 employees. However, according to the Secretary of Labor, employers with less than 50 employees may be exempt if “the imposition of such requirements would jeopardize the viability of the business as a going concern.”
Expansion of Unemployment Benefits
Pursuant to the FFCRA, the Secretary of Labor has provided emergency funding to state unemployment trust funds. The purpose of this is for more individuals affected by COVID-19 to have access to unemployment benefits.
Under the FFCRA, employers are entitled to receive refundable tax credits for protected leave and paid sick leave. Qualified employers will receive tax credits for 100% of what they paid out to employees. Employers with less than 50 employees may be exempted from these requirements by the Secretary of Labor. Employers with less than 25 employees are not required to give their employees their previous jobs back.
Employers with less than 500 employees are entitled to receive two new credits:
1) For employers who pay employees for leave related to COVID-19, be sure to keep accurate records of the amounts paid per hours of leave and keep track of any costs to maintain health insurance coverage for said employee. While regular tax deductions will apply, employers will receive a supplementary tax credit to be reported on the 2020 tax return —
Full time employees are entitled to 80 hours of leave paid at their regular rate, while part-time employees are entitled to an amount equal to the average number of hours worked over two-weeks; also paid at that regular rate. This paid sick time is in addition to leave already provided. Employers cannot force their employees to use other leave benefits prior to using the aforementioned FFCRA sick leave. Employers must conspicuously post these requirements in their workplaces.
2) Employers paying for leave as a result of COVID-19 concerns may keep the amount of payroll taxes to cover the paid leave amount. This tax credit should be used NOW since any payroll taxes due can be used to pay for qualified leave.
While we are experiencing uncertain times, the FFCRA has lit the proverbial “light in the dark.” While this legislation certainly does not provide a complete economic solution to this pandemic crisis, it is a step forward.
Meyer Law, PLLC welcomes any phone calls about any additional questions and/or concerns that you may have.
Stay safe and healthy!
Source: The Families First Coronavirus Response Act of 2020, H.R. 6201, 116th Cong. (2020)