Covid-19 is a pandemic that has changed the way we shop, the way we socialize and the way we work. Executive orders, state and federal legislation places significant burden on businesses to manage risk by adhering to new mandates. The FFCRA is an important piece of legislation to understand.
1. What is the FFCRA?
In response to Covid 19, the U.S. House of Representatives passed the Families First Coronavirus Response Act (FFCRA). It was signed into law on March 18, 2020 and became effective in April 1, 2020. It will expire on December 31, 2020 unless extended. The law includes a number of important provisions related to paid leave during the pandemic.
2. WHAT EMPLOYERS ARE AFFECTED?
The FFCRA applies to private employers with fewer than 500 employees in the United States and its territories. That means it has no impact on employers with over 500 employees. Employees include any active employees, employees on leave, temporary employees who may be jointly employed by two employer (such as a staffing company), and day laborers supplied by a temporary agency. An employer means each business entity assuming that each company is not substantially integrated so as to appear to be one using the same analysis as that used under FMLA , which can be found in 29 CFR 825.104.
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.
3. WHAT ARE THE LEAVE POLICIES OF THE FFCRA?
The law provides for emergency paid sick time for employees as follows:
Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State or local government order or advice of a healthcare provider), and/or experiencing Covid-19 symptoms and seeking a medical diagnosis; or
Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State or local government order or advice of a healthcare provider), or care for a child (under the age of 18) whose school or child care provider is closed or unavailable for reasons related to Covid-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to bona fide need for the leave to care for a child whose school or child care provider is closed or unavailable for reasons related to Covid-19.
4. ARE THERE CREDITS AVAILABLE TO EMPLOYERS?
Generally, every dollar of required paid leave (plus the cost of the employer’s health insurance premiums during leave) will be 100% covered by a dollar-for-dollar refundable tax credit available to the employer.