March 31, 2020 Paul Glantz, CPA

Families First Coronavirus Response Act (FFCRA) – Effective April 1, 2020

PAID LEAVE

The Families First Coronavirus Response Act was Phase 2 of the government’s plan to combat COVID19. This Act goes into effect on April 1, 2020 and requires companies to provide both limited paid sick leave and expanded family leave to employees impacted by the COVID-19 outbreak. 

The Emergency Family and Medical Leave Expansion Act (EFMLEA) and the Emergency Paid Sick Leave Act (EPSLA) benefits are limited to individuals directly affected by COVID-19, whether they are caring for themselves or others.  Benefits begin April 1, 2020 and are in effect through the end of this year. These provisions apply to employers with fewer than 500 employees. Businesses with 50 or fewer employees can exempt themselves from these requirements if complying would jeopardize the viability of the small business as a going concern.

Employers may claim 100 percent of COVID-19-related “qualified wages” as a refundable credit against federal form 941 payroll taxes or self-employment tax in the case of a self-employed individual.

Below is a summary of both of these provisions.

Emergency Paid Sick Leave

Who this Impacts: Employers under 500 employees, self-employed individuals.

Covered Employees: Part-time and full time employees, regardless of length of employment.

Amount of Leave:

  • Full-time employees: 80 hours of paid leave
    • Calculated at their regular rate of pay (as calculated by the FLSA) or the minimum wage, whichever is greater.
  • Part-time employees: Average hours worked over a two-week period.
    • If an employee works a variable schedule, it is the average number of hours they worked per day over the previous six months. If the employee has not worked this long, it is the reasonable expectation of the employee at the time of hire or the average number of hours per day the employee would normally be scheduled.

Who is Eligible: Eligible employees include the following:

“Tier 1”: Employee must be compensated at their regular rate, up to $511 per day ($5,110 total, $511 x 10 business days).

  1. Employees subject to a federal, state, or local quarantine or isolation order related to COVID-19 (federal, state, local directives and worksite closures do not count).
  2. Employees that have been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. Employees that are experiencing symptoms of COVID-19 and seeking a medical diagnosis.

“Tier 2:” Employee must be compensated at two-thirds of their regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work, not to exceed $200 per day ($2,000 total, $200 x 10 business days).

  1. The employee is caring for an individual under Tier 1
  2. The employee is caring for a son or daughter of the employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions or is experiencing a “substantially similar condition” specified by the government

Expanded Family and Medical Leave Expansion Act (EFMLEA)

Covered Employees: An employee has been employed for at least 30 calendar days (based on hire date).

Covered Employers: An employer with fewer than 500 employees.

Amount of Leave: 12 weeks, the first 2 weeks are unpaid leave and the remaining 10 weeks are paid leave with reinstatement rights.

  • First 10 days may be unpaid (but employees may use other paid leaves during this time – most employees will qualify for Emergency Paid Sick Leave to cover the first 10 days).

PAID LEAVE F.A.Q’s

Additional Q&A’s can be found on the Department of Labor website here

If I am a small business with fewer than 50 employees, am I exempt from the requirements to provide paid sick leave or expanded family and medical leave?

A small business is exempt from certain paid sick leave and expanded family and medical leave requirements if providing an employee such leave would jeopardize the viability of the business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:

  • employer employs fewer than 50 employees;
  • leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
  • an authorized officer of the business has determined that at least one of the three conditions described in Question 58 is satisfied.

The Department encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety. 

Are the paid sick leave and expanded family and medical leave requirements retroactive?

No.

When does an employer count employees to determine if they are at or above 50 or 500?

The employer should count the total full-time and part-time employees within the United States, District of Columbia, or any Territory or possession of the United States at the time the employee’s leave is to be taken (April 1st at the earliest).

If you have any additional questions on how these rules impact your business, please contact our office.

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About the Author

Paul Glantz, CPA Paul Glantz is a Certified Public Accountant licensed in both Texas and New York. Paul has an extensive background in public accounting with a specific focus on individual, fiduciary, and business taxation. Paul currently resides in Austin, Texas.

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