The Families First Coronavirus Response Act (FFCRA or Act), which is in effect from April 1, 2020 – December 31, 2020, impacts employer-required paid leave for businesses with 500 or fewer employees. The Act requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The full Act can be found here.

This article is intended to provide a high-level overview of the Act.

(Updated 9/14/2020) Along with the initial overview from March, readers should note the updates provided in the Department of Labor’s (DOL) Wage and Hour Division’s newest guidance, which clarify workers’ rights and employers’ responsibilities under the FFCRA’s paid leave provisions. The clarifications come in response to the U.S. District Court for the Southern District of New York August 3, 2020, decision that found portions of the initial regulations invalid.

This article also includes an August 31, 2020, update concerning information related to childcare needs in response to the DOL’s guidance to address the availability of FFCRA leave for employees as children returned to school this fall.

Summary of leave reasons:

1. Employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.

2. Employee has been advised by a healthcare provider to self-quarantine related to COVID-19.

3. Employee is experiencing COVID-19 symptoms and is seeking medical diagnosis.

4. Employee is caring for an individual who is quarantined or isolated due to federal, state, or local quarantines related to COVID-19 or has been advised by a healthcare worker to self-quarantine related to COVID-19.

5. Employee is caring for his or her child, under the age of 18, whose school or place of care, closes due to COVID-19-related reasons. Also included is an adult child who has a mental or medical disability and is incapable of self-care because of the disability.

6. Employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services.

Paid Leave Provisions

In general, employers who are covered under the FFCRA must provide employees the following:

Up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of emergency paid sick leave based on the higher of the employee’s regular rate of pay or the applicable state or federal minimum wage subject to the compensation guidelines below:

• 100% for qualifying reasons 1-3 above, up to $511 daily and $5,110 total. A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period. Hours taken for reasons 1-3 above must be consecutive until leave is exhausted or the employee is cleared to return to work.

• 2/3 for qualifying reasons 4-6 above, up to $200 daily and $2,000 total. Hours taken for reasons 4-6 above can be taken intermittently if agreed to by the employer.

Additionally, up to 12 weeks of expanded family and medical leave paid at 2/3 for qualifying reason 5 above up to $200 daily and $10,000 total. The first two weeks are unpaid (emergency sick pay can be used). The expanded FMLA can be taken intermittently between April 1 – December 31, 2020, if the employer agrees to the modified schedule. Note that a total of 12 weeks of FMLA and Expanded FMLA combined can be used per 12-month period.

(Updated 8/31/2020) Employees with children who attend a school with alternate in-person and remote learning days are eligible for Expanded FMLA on remote learning days as long as the parent actually needs the leave for child-care purposes and is the only suitable person available.

(Updated 8/31/2020) Employees are not eligible for FFCRA if there is an in-person school option offered and they make the choice to keep their children home.

Employees must provide documentation for any leave taken. It is also important to note benefits of the Act are not retroactive.

(Updated 9/14/2020) The following affirmations and clarifications came from the DOL on September 11, 2020. The official statement, scheduled for release on September 16, 2020, can be found here:

• An employee cannot take FFCRA paid leave if the employer would not have had work for the employee to perform, even if the qualifying reason did not apply.

• Depending on the reason for taking FMLA leave, the statute requires a medical need to take intermittent leave or an agreement between the employer and employee before an employee may take intermittent leave.

• The definition of “healthcare provider” includes only employees who meet the definition of that term under the Family and Medical Leave Act regulations or who are employed to provide diagnostic services, preventative services, treatment services or other services that are integrated with and necessary to the provision of patient care which, if not provided, would adversely impact patient care.

• Employees must provide required documentation supporting their need for FFCRA leave to their employers as soon as practicable. That is to say, an employer may require an employee to furnish as soon as practicable: (1) the employee’s name; (2) the dates for which leave is requested; (3) the qualifying reason for leave; and (4) an oral or written statement that the employee is unable to work. The employer may also require the employee to furnish the information set forth in § 826.100(b)-(f) at the same time.

• Advanced notice of expanded family and medical leave is required as soon as practicable; if the need for leave is foreseeable, that will generally mean providing notice before taking leave.

Who is Eligible?

With very limited exceptions, FFCRA applies to companies with fewer than 500 employees. Employees who are unable to work or telework may be eligible for up to two weeks paid sick leave for the COVID-19 related reasons mentioned above. Please note, employees must have been employed for at least 30 days to be eligible for up to an additional 10 weeks of partially paid expanded family and medical leave for reason 5 above.

Employers receive 100% reimbursement for paid leave in accordance with the Act with a dollar-for-dollar tax offset against payroll taxes. Businesses can submit a claim to the IRS if their payroll taxes do not cover the cost of the paid leave. Health insurance costs are also included in the credit. Self-employed individuals receive an equivalent credit. Employers should set up separate payroll codes to track paid leave under FFCRA.

The Department of Labor (DOL) requires employers post the FFCRA notice in their place of business by April 8, 2020. The notice must be posted in their business, if currently open, and distributed to their employees who are working remotely.

The DOL has a variety of helpful resources related to FFCRA, and we are here to answer any accounting and advisory questions that may arise. To contact us, email, call or fill out the form below.

 

 

 

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Our firm provides the information in this article for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this blog are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.

 

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