On 3/18/2020 the President signed the Families First Coronavirus Response Act (FFCRA).
FFCRA will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will ensure that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus while at the same time reimbursing businesses.
What is required?
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.
Who do the rules apply to?
The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
What employees qualify for paid sick time?
Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
. has been advised by a health care provider to self-quarantine related to COVID-19;
. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
. is caring for an individual subject to an order described in (1) or self-quarantine as
described in (2);
. is caring for a child whose school or place of care is closed (or child care provider is
unavailable) for reasons related to COVID-19; or
. is experiencing any other substantially-similar condition specified by the Secretary of
Health and Human Services, in consultation with the Secretaries of Labor and
What employees qualify for expanded family leave?
Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.
How does the covered employer get reimbursed for qualifying wages paid under the FFCRA?
Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.
Do employers have to post information about the new FFCRA requirements?
Yes. Each covered employer must post in a conspicuous place on its premises a notice of FFCRA requirements
. US Department of Labor Fact Sheet for Employees
. US Department of Labor Fact Sheet for Employers
. US Department of Labor Questions and Answers
. IRS Notice on Effective Date for Employment Tax Credits Under FFCRA
. NJ DOL’s Paid Sick/Family/Medical Leave Poster
This is general information and should not be relied upon to evaluate or prepare you tax return or make any business decisions. Instead, please use the above information as a resource to help you discuss your business and tax picture with your professional tax adviser and other professional advisers.
(c) 2020 Simoncpa, PC