How To Stay Compliant Under The FFCRA
The FFCRA or, The Families First Coronavirus Response Act requires some employers to provide employees with sick-leave benefits related to COVID-19.
What is the Families First Coronavirus Response Act (FFCRA)?
The FFCRA requires employers (businesses with fewer than 500 employees*) to provide employees with paid sick leave or expanded family and medical leave for reasons related to COVID-19.The Department of Labor’s Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date April 1, 2020 through December 31, 2020.
The FFCRA paid leave durations are:
- 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 and/or experiencing COVID-19 symptoms.
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay if the employee is unable to work because they must care for an individual subject to quarantine, or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19.
- 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 to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
*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 an ongoing concern. Details on how to elect this small business exemption will be addressed in upcoming regulations.
Who is eligible for the FFCRA?
Qualifying Reasons:
Employees qualify for paid sick time if the employee is unable to work (or unable to telework) due to a need for a leave. An employee qualifies if he/she:
- is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- has been advised by a health care provider to self-quarantine related to COVID-19;
- is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
- is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
- is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Calculation of Pay:
- For leave reasons (1), (2), or (3): employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
- For leave reasons (4) or (6): employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
- For leave reason (5): employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period).
If the employer does not have work, and has sent employees home or closed operations prior to April 1st 2020 (the effective date), the employee is not eligible for paid sick leave or expanded family and medical leave but may be eligible for unemployment insurance benefits.
Employees who take leave for the FFCRA:
If you are required to go on leave due to the above reasons, it is important you provide your employer with documents supporting that leave so they can provide the correct information to the government for reimbursement.
Documents Can Include:
1. A notice of closure or unavailability from your child’s school, place of care, or child care provider, including:
- a notice that may have been posted on a government, school, or daycare website, or
- published in a newspaper, or
- emailed to you from an employee or official of the school, place of care, or child care provider.
2. If you are taking leave beyond the two weeks of emergency paid sick leave because your medical condition for COVID-19-related reasons rises to the level of a serious health condition, you must continue to provide medical certifications under the FMLA if required by your employer.
Additional Information:
- For additional information, visit the US Department of Labor's website dol.gov/agencies/whd.
What is the FFCRA employer reimbursement?
Eligible employers may claim tax credits for qualified leave wages (above) paid to employees on leave taken between April 1, 2020- December 31, 2020.
1. A dollar-for-dollar tax offset against payroll taxes will be provided for all qualifying wages paid under the FFCRA.
- Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate payment caps.
- Where a refund is owed, the IRS will send the refund as quickly as possible.
2. Employers receive 100% reimbursement for paid leave pursuant to the Act.
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability.
- Self-employed individuals receive an equivalent credit.
- Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.
For more information, please see the Department of the Treasury’s website.
Who is eligible for the FFCRA employer reimbursement?
Eligible employers of the private sector that provide leave required by the FFCRA are eligible for reimbursement of the costs of that leave through refundable tax credits.
- The eligible employer is entitled to a fully refundable tax credit equal to the required paid sick leave.
- This tax credit also includes the employer’s share of Medicare tax imposed on those wages and its allocable cost of maintaining health insurance coverage for the employee during the sick leave period (qualified health plan expenses).
- The eligible employer is not subject to the employer portion of social security tax imposed on those wages.
For more eligibility questions consult the IRS website.
How to apply for the FFCRA employer reimbursement?
If you plan to claim a tax credit under the FFCRA for your payment of the sick leave or expanded family and medical leave wages, you should gather appropriate documentation in your records.Internal Revenue Service (IRS) has the complete list of applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit. The IRS expects to begin processing these requests during April 2020.
Employee Documentation:
You may also require your employee to provide you with any additional documentation in support of their expanded family and medical leave, (to the extent permitted under the certification rules for conventional FMLA leave requests). See some examples above in "Employees Who Take Leave".
How to File a Claim:
Eligible employers will claim the credits on their federal employment tax returns:
- Form 941 - Employer's Quarterly Federal Tax Return
- However, they can benefit more quickly from the credits by reducing their federal employment tax deposits. For example:
- An eligible employer paid $10,000 in qualified leave wages, is otherwise required to deposit $8,000 in federal employment taxes, including taxes withheld from all of its employees, on wage payments entitled to claim on the Form 941.
- The employer can keep the entire $8,000 of taxes that they were otherwise required to deposit without penalties as a portion of the credits.
- The eligible employer may then file a request for an advance credit for the remaining $2,000 by completing Form 7200.
- If there are insufficient federal employment taxes to cover the amount of the credits, an employer may request an advance payment of the credits from the IRS by submitting: Form 7200, Advance Payment of Employer Credits Due to COVID-19.
For more details on the circumstances, amounts, and periods for which the credits are available, the IRS website has an extensive FAQ section.
- Determining the Amount of the Tax Credit for Qualified Sick Leave Wages
- Determining the Amount of the Tax Credit for Qualified Family Leave Wages
- Periods of Time for Which Credits are Available
Other employer information:
Employers in violation of the provisions of the FFCRA will be subject to penalties and enforcement by WHD.
Employer Notice:
- Each covered employer must post in a conspicuous place on its premises a notice of FFCRA requirements.
Prohibitions:
- Employers may not discharge, discipline, or otherwise, discriminate against any employee who takes paid sick leave under the FFCRA and files a complaint or institutes a proceeding under or related to the FFCRA.
Penalties and Enforcement:
- Employers in violation of the first two weeks’ paid sick time or unlawful termination provisions of the FFCRA will be subject to the penalties and enforcement described in the Fair Labor Standards Act.
- Employers in violation of the provisions providing for up to an additional 10 weeks of paid leave to care for a child whose school or place of care is closed (or child care provider is unavailable) are subject to the enforcement provisions of the Family and Medical Leave Act.
- The Department will observe a temporary period of non-enforcement for the first 30 days after the Act takes effect (April 1st, 2020), so long as the employer has acted reasonably and in good faith to comply with the Act.
Additional Information:
- For additional information, visit the US Department of Labor's website dol.gov/agencies/whd.
How Push can help your business stay compliant:
Leave Management:
- Customized leave types.
- Employees can make a request from their device via the Push Employee App.
- Tracking leave dates, assuring they with government orders and school closures.
- Calculations streamlined to payroll, employee paystubs are viewable in-app.
Document Storage:
- Using Push HR Software Any leave-related documents can be uploaded directly to the employee's Push account. No need for paper storage.
- Easily accessible for administrators when needed.
Message Board:
- In addition to posting a message on your premises, you can also send messages to employees all your employees about any government programs or requirements, via our Message Center.
- You can virtually post PDFs on the Message Center, which is available on employee login.
References
- https://www.congress.gov/bill/116th-congress/house-bill/6201 - US Congress
- https://www.dol.gov/agencies/whd/pandemic - US DOL
- https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave - FFCRA Act Fact Sheet
- https://www.dol.gov/agencies/whd/pandemic/ffcra-questions - FFCRA FAQs
- https://www.irs.gov/coronavirus - IRS
- https://home.treasury.gov/news/press-releases/sm952 - US Treasury Dept Press Release
- https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf - FFCRA Poster
Disclaimer: This is guide is provided by Push Technologies Inc. (“Push Operations”) for information purposes only. This is not an official or legal document and should not be taken as legal advice. Push Operations does not guarantee or warrant the accuracy or completeness of the information provided. For the most accurate and up-to-date information, please check with the proper governing authority.
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