The Families First Coronavirus Response Act: Some Basics Your Business or Nonprofit Needs to Know
Last week, the President signed into law the Families First Coronavirus Response Act (“FFCRA”). This law aims to provide initial relief to workers throughout the nation in the wake of COVID-19. The FFCRA requires certain employers, including schools and non-profits, to provide emergency paid leave under the Family and Medical Leave Act and Emergency Paid Sick Leave provision. This law goes into effect April 1, 2020.
FFCRA provides significant refundable emergency paid sick leave and family and medical leave benefits, which should provide some immediate help to businesses, nonprofits and their employees. Here is are some basics about this new transformative law:
- FFCRA provides two weeks of emergency paid sick leave. FFCRA requires employers with fewer than 500 employees (including nonprofits) to provide their employees with two weeks of paid sick leave, paid at the employee’s regular rate, to quarantine or seek a diagnosis or preventive care for the Coronavirus. It also requires payment at 2/3 the employee’s regular rate to care for a family member for those purposes or to care for a child whose school has closed or whose childcare provider is unavailable due to the Coronavirus. These provisions of FFCRA expire at the end of December 2020.
- FFCRA expands Family Medical Leave Act (FMLA): FFCRA expands the number of workers who can take up to 12 weeks of job-protected leave under the Family and Medical Leave Act for Coronavirus-related reasons. After the two weeks of emergency paid leave (see above), employees of employers with fewer than 500 employees will be eligible to receive at least 2/3 of each employee’s usual pay. Employees must have been employed for at least 30 days to qualify and meet a “qualifying need related to a public health emergency.” The qualifying reasons for the emergency paid leave are caring for a child if the child’s school or childcare center is closed due to Coronavirus. These provisions of FFCRA also expire at the end of December 2020.
- FFCRA provides reimbursable payroll tax credits: If you are a business or nonprofit covered by this act, i.e. less than500 employees, if you are paying the mandated paid leave, you are entitled to claim a refundable tax credit. Specifically, the tax credit is allowed against the employer portion of payroll taxes, and any paid leave costs that exceed the amount of payroll taxes owed will be refundable to the employer at the end of each quarter.
Rocky M. Cabagnot
Hull & Chandler, P.A.
1001 Morehead Square Drive, Suite 450