The Families First Coronavirus Response Act (FFCRA), which goes into effect April 2, 2020 and expires December 31, 2020, responds to the coronavirus outbreak by providing additional assistance in the areas of COVID-19 testing, sick leave, food assistance, and more. Here’s what FFCRA means for business owners and employees in the areas of sick leave and expanded family and medical leave.
- Employees are eligible for up to two weeks of sick leave (full pay for self, 2/3 pay for family care) for illness, quarantine or school closures
- Employees are eligible for up to 12 weeks of FMLA leave for school closures (10 days unpaid and then up to 10 weeks at 2/3 pay)
- The bill authorizes the Secretary of the Department of Labor to issue regulations to
(1) exclude certain healthcare providers and emergency responders from the
definition of eligible employee and (2) exempt small businesses with fewer than 50
employees when it would jeopardize the viability of the business as a going concern - FMLA expansion covers:
- Employers with fewer than 500 employees
- Employees who have been employed for at least 30 calendar days (some exclusions may apply)
- Employees who must care for children under the age of 18 in the event of school and place-of-care closures or if care provider is unavailable due to a public health emergency with respect to COVID-19.
- Emergency paid sick leave covers:
- Employers with fewer than 500 employees
- All employees no matter the length of employment (some exclusions may apply)
Employers are eligible for payroll tax credits associated with wages paid for sick leave and expanded FMLA mandated by FFCRA.
- Emergency paid sick leave mandated by FFCRA is exempt from Social Security taxes otherwise imposed on the employer
- Non government employers will be entitled to a refundable federal employment tax credit for the entire amount that they pay in paid sick leave
- If you continue an employee’s health plan coverage while the employee is on paid emergency sick leave under FFCRA, the credit is increased up to an amount which includes the employer’s expense for the health plan coverage
- Payroll tax credits can be claimed on a quarterly basis, equal to 100% of the
amount of sick leave wages paid
- This credit is limited to $511 a day ($5,110 total) if taking time off to care for themselves & $200 a day ($2,000 total) if the sick leave is to care for someone with COVID 19 or a child whose school/day care was closed
- Employers must increase their gross income for the taxable year by the amount of payroll credit received on income tax filing
Implementing the required changes, and claiming the payroll tax credits available under FFCRA, will require close coordination between business owners, payroll providers, and tax advisors.
Our team is continuing to monitor news related to coronavirus relief efforts and will keep you updated as clarification is provided. If you have questions, be sure to reach out to us. Our entire team is here to support and guide you!