On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA) which provides paid sick leave and free Coronavirus testing, expanded food assistance and unemployment benefits, and requires employers to provide additional protections for health care workers. The FFCRA becomes law on April 2.
For employees and employers, changes to emergency sick leave and family leave provide some relief in dealing with the effects of COVID-19 on the workforce. Namely, the FFCRA impacts employers with up to 500 employees and provides employees with:
- Up to 80 hours of paid sick leave at their normal pay rate up to $511 per day and $5,110 total – This applies to full and part-time employees. Part-time employees are compensated at their average pay rate for two weeks of part-time hours.
- Up to 12 weeks of paid family leave as a result of school or childcare closure at a rate of two-thirds their normal pay up to $200 per day and $10,000 total
Employees who have symptoms of the virus, have been exposed to the virus, have tested positive for the virus, or are caring for a family member with the virus, or are on mandated government quarantine, qualify for these benefits. Employees cannot be forced to take paid time off before receiving these benefits, but a 10-day waiting period does apply.
Employers will receive tax credits at 100% of qualified family leave benefits paid to cover the cost of the expanded leave. Provisions exist for employers with fewer than 50 employees (who can request an exemption) and fewer than 25 employees (who can choose not to reinstate employees to previous positions). Employers with over 500 employees are not affected.
Tax credits are also available for self-employed individuals against their income taxes who also work for another employer (Lyft, Uber, catering, events, etc.) at their average rate for up to two weeks, and family leave pay at two-thirds the normal rate. The same daily and total caps apply as above. Any leave pay greater than the individual’s tax bill qualifies for government rebate.
Additionally, the bill granted $1 billion toward unemployment insurance benefit grants for states to expand unemployment benefits.
For more information on the tax credits available to employers, visit https://www.journalofaccountancy.com/news/2020/mar/coronavirus-relief-bill-tax-credits-for-employers-23225.html.
For assistance with complying with these regulations, contact your human resource consultant. For assistance with qualifying tax credits, contact your account manager.