As of January 1, 2021, FFCRA paid leave benefits are no longer mandatory. But, employers who voluntarily continue providing the paid leave to employees can claim the FFCRA tax credit until March 31, 2021.
The first coronavirus bill, the Families First Coronavirus Response Act (FFCRA), was signed into law on March 18, 2020. The FFCRA offers a number of relief measures for businesses and individuals impacted by COVID-19. The bill’s effects expire on December 31, 2020. Get the straight facts on what the bill provides below.
What is the Families First Coronavirus Response Act?
Only 47% of small business owners reported that they were familiar with the Families First Coronavirus Response Act (FFCRA). If you fall under the 53% who’s unfamiliar with the act, read on.
The Families First Coronavirus Response Act provides the following relief for both businesses and employees:
- Paid sick and family leave
- Expanded Family and Medical Leave Act benefits
- Paid leave employer tax credits
- Expanded unemployment benefits
- Nutrition waivers
- COVID-19 testing coverage
Don’t confuse the FFCRA with the CARES Act, which was the second coronavirus legislation passed nine days later on March 27, 2020.
The CARES (Coronavirus Aid, Relief, and Economic Security) Act is the legislation behind the Paycheck Protection Program, Employee Retention Credit, Economic Impact Payments, and Pandemic Unemployment Assistance.
1. Paid sick and family leave
The FFCRA requires most employers with fewer than 500 employees to provide eligible employees with 10 days of paid sick leave and 10 weeks of paid family leave.
Employees can take paid sick and family leave for coronavirus-related situations. Paid sick leave is for employees who have the coronavirus or are caring for someone who has it. Paid family leave is for employees who must watch a child whose school or daycare is closed because of it.
If you have fewer than 500 employees and aren’t exempt from the FFCRA (e.g., have fewer than 50 employees), you must provide these benefits between April 1, 2020 – December 31, 2020.
Employees can take paid sick leave and receive their regular wage ($511 maximum daily rate) for 10 days if they are:
- Subject to a quarantine or an isolation order
- Advised by a healthcare provider to self-quarantine
- Experiencing COVID-19 symptoms and waiting for a diagnosis
Employees can take paid leave and receive two-thirds their regular wage ($200 maximum daily rate) if they are:
- Caring for someone subject to a quarantine or isolation order or advised by a healthcare provider to self-quarantine (paid sick leave, 10 days)
- Caring for a child under 18 whose school or place of care is closed due to COVID-19 (paid family leave, 10 weeks)
If you have part-time employees, the FFCRA also applies to them. Use their average number of hours worked over a typical two-week period to determine how many hours they’re eligible for.
|Learn more about your paid leave responsibilities by reading our article, “Coronavirus Paid Leave: Q&A for Employers.”|
2. Expanded Family and Medical Leave Act benefits
The FFCRA’s Emergency Family and Medical Leave Expansion Act extends the guidelines to all employers with fewer than 500 employees. Regular Family and Medical Leave Act (FMLA) rules only apply to businesses with 50 or more employees.
Again, the expansion requires qualifying employers to provide paid family leave to employees who meet the criteria (explained in the previous section).
The expanded FMLA under the FFCRA also protects most employees’ jobs for 12 weeks when they take paid family leave to care for a child. Again, employees are entitled to 10 weeks of paid family leave. The first two weeks of paid family leave can either be unpaid or the employee can use their 10 days of FFCRA paid sick leave.
If you have fewer than 25 employees, you do not have to reinstate an employee after they use paid family leave if you meet all three of the following conditions:
- The job no longer exists due to economic hardship caused by the coronavirus
- You make reasonable efforts to return the employee to a similar position
- You try to contact the employee if anything comes up within a year of when they would’ve returned to work
3. Paid leave employer tax credits
To help employers offset the cost of providing paid sick and family leave, the FFCRA provides COVID-19 paid leave payroll tax credits. Employers use these refundable payroll tax credits to get reimbursed, dollar-for-dollar, for the cost of providing paid sick and family leave.
The total credit amount you can claim includes the paid leave you give the employee, plus the employer Medicare tax on those wages and health plan expenses associated with them.
You can claim these paid leave tax credits if the FFCRA requires you to provide leave and you pay employees paid leave wages.
You “fund” the paid leave wages by holding onto federal employment taxes on wages between April 1 – December 31 instead of depositing them with the IRS. Then, you claim the amount as a tax credit on your federal employment tax return.
Employers whose employment taxes don’t cover the leave wages have the option to file Form 7200, Advance Payment of Employer Credits Due to COVID-19. Use the form to request a payment advance from the IRS.
4. Expanded unemployment benefits
The Emergency Unemployment Insurance Stabilization and Access Act of 2020 expands unemployment benefits for employees impacted by COVID-19. Under the FFCRA, the federal government provided states with additional funding for unemployment benefits.
Expanded unemployment benefits include eased eligibility requirements and waived waiting periods. This allows more employees to qualify for benefits, and employees do not have to wait a week to receive benefits or search for work to be eligible.
The expanded benefits also let employers furlough or lay off employees without increasing their SUTA tax accounts.
5. Nutrition waivers
The FFCRA’s nutrition waivers expand nutrition assistance program benefits to ensure children and those in need have food.
The expanded nutrition aid provides additional funds to child nutrition programs, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Supplemental Nutrition Assistance Program, and USDA Foods Programs.
6. COVID-19 testing coverage
COVID-19 testing coverage lets individuals receive coronavirus testing and diagnosis without involving deductibles, copayments, or coinsurance. This coverage also covers office visits, urgent care visits, and emergency room visits resulting in an order for coronavirus testing.This is not intended as legal advice; for more information, please click here.