Overview of Families First Coronavirus Response Act
The Families First Coronavirus Response Act (FFCRA or H.R. 6201) is intended to provide businesses with fewer than 500 employees with the funds necessary to offer employees paid leave so they can tend to their own health or that of their family members during the COVID-19 pandemic. Under this legislation, small and midsize employers can utilize two new refundable payroll tax credits that will fully reimburse them for the cost of providing COVID-19-related leave to employees. In this manner, employers can keep employees on their payroll and prevent workers from having to choose between a paycheck and public health measures necessary to combat COVID-19. Health insurance costs are included in the credit and employers will face no payroll tax liability.
The legislation goes into effect April 1, 2020 and applies to leave taken between April 1 – December 31, 2020.
Highlights of the legislation are as follows.
- Reimbursement will be easy to obtain with an immediate dollar-for-dollar tax offset provided against payroll taxes
- If a refund is owed, the IRS will send the refund as quickly as possible
- Employees of private sector employers with fewer than 500 employees are eligible to receive up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of paid sick leave based on the higher of their regular rate of pay or the applicable state or Federal minimum wage.
- Employees are entitled to take COVID-19-related leave because the employee:
- Is subject to a Federal, State or local COVID-19-related quarantine/isolation order
- Has been advised by a health care provider to self-quarantine for a reason related to COVID-19
- Is experiencing COVID-19 symptoms and seeking a medical diagnosis
- Is caring for an individual who is in self-quarantined or has been advised to self-quarantine by a health professional
- Is caring for his/her child whose school/child care place is closed due to COVID-19
- Is experiencing other similar conditions specified by the U.S. Department of Health and Human Services
- Employees will be paid at 100 percent for reasons 1 – 3 above, up to $511/daily and $5.110 total
- Employees will be paid at 2/3 the employee’s pay for reasons 4 and 6 above, up to $200 daily and $2,000 total
- Employees who have been employed for at least 30 days prior to their leave request may be eligible for an additional 10 weeks of paid sick leave and expanded family and medical leave paid at 2/3 for reason 5, for up to $200/daily and $12,000 total
- Employers with less than 50 employees are eligible for an exemption to provide leave to care for a child whose school or childcare is closed (#5 above) if the viability of the business is threatened.
For more information, view the following: