On March 18, 2020, the President enacted the Families First Coronavirus Response Act, H.R. 6201, (FFCRA). The FFCRA imposes new requirements on certain employers to provide emergency paid sick leave and expanded family and medical leave needed for coronavirus-related reasons. Significantly, the FFCRA also provides tax credits to reimburse employers, dollar-for-dollar, for these costs. The FFCRA’s provisions become effective April 1, 2020, and applicable to leave between April 1, 2020, and December 31, 2020.¹
Key provisions of the FFCRA applicable to employers include:
Employers must act quickly to conform their policies to ensure that they are administered in accordance FFCRA.
Private employers with fewer than 500 employees and all governmental entities must provide EPSL to any employee(s) unable to work (or telework) because of illness or quarantine if such employee(s):
Private employers with fewer than 500 employees and all governmental entities must provide up to 12 weeks of FMLA (10 of which are paid and subject to a cap, i.e. EFMLA) to any employee(s) who has been employed for a minimum of 30 days and is unable to work (or telework) because he or she must care for a minor child due to school closures or childcare unavailability resulting from the coronavirus emergency. FFCRA provides that after the first 10 days of this EFMLA (which may be unpaid), the leave must be paid at a rate of two-thirds of the employee’s regular rate of pay. The amount is ultimately capped at $200 per day or $12,000 in the aggregate.
Generally, most federal government employees are covered by Title II of the Family and Medical Leave Act. Title II was not amended by FFRCA; thus, these employees are not covered by the expanded family and medical leave provisions of the FFCRA. However, such federal employees are still covered by the paid sick leave provision.
EXEMPTION: Small businesses (defined as having fewer than 50 employees) may qualify for exemption from the requirement to provide leave resulting from school closures or childcare unavailability if the business can demonstrate that the leave requirements would jeopardize the viability of the business as a going concern.
The FFCRA also provides affected employers with payroll tax credits that will fully reimburse (dollar-for-dollar) them for providing employees with new EPSL and FMLA. On March 20, 2020, the IRS announced that:
[E]mployers will be able to claim these credits based on qualifying leave they provide between the effective date and Dec. 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
The March 20, 2020, IRS announcement also indicated that guidance is expected soon which is supposed to provide that eligible employers paying ESPL or EFMLA “will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.”⁴ The payroll taxes able to be retained include:
This analysis is not legal advice. It is provided for informational purposes only. This analysis does not constitute legal advice and is being provided on an informational basis only. For advice about whether and how you or your business can benefit from this topic, please contact your legal counsel.