The coronavirus shook the nation and globe, forcing policy makers to act. As of June 2020, more than two million cases of COVID-19 have been reported in the United States, — a number which continues to grow. In response, various acts were implemented, including the Families First Coronavirus Response Act (FFCRA).
If and when your employees file for FFCRA, here’s what you need to know.
What Is FFCRA and Why Is It Relevant?
On March 18, 2020, Trump signed the FFCRA in response to the spread of COVID-19, which became effective on April 1, 2020. In summary, this act does the following:
- Expands the Family and Medical Leave Act (FMLA) temporarily (with an effective date through December 31, 2020). This will help cover the loss of income when an employee needs to provide care for a child due to childcare and school closures.
- Creates two weeks of paid sick leave for childcare, as well as other leave related to COVID-19.
- Provides tax credits related to paid leave
This act states that covered employers must provide to all of their employees:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate because the employee is in quarantine and/or is experiencing symptoms of COVID-19.
- Two weeks (up to 80 hours) of paid leave at two-thirds of the employee’s regular pay rate because of their need to care for someone subject to quarantine, or care for a child under the age of 18 due to school closures.
It is important to note that a “covered employer” is a public or private employer with less than 500 employees. If your business has fewer than 50 employees, you may qualify for an exemption, which is outlined in #58 and #58 in the DOL Q&A.
In addition, if an employee has been employed for at least 30 days, as a covered employer, you must also pay:
- Up to 10 additional weeks of paid expanded family and medical leave at two-thirds of the employee’s regular pay rate. This applies when the employee needs to care for a child or cannot work due to reasons related to COVID-19.
So, What’s Next?
The following checklist, intended for small business owners and HR managers, showcases the necessary steps after an employee requests leave under the FFCRA. This applies to both the EFMLEA and EPSLA.
Step one: Determine the employee’s eligible hours
To do so, calculate the average hours worked in a 2-week period (or 10 week period for EFMLEA). If the employee’s hours vary, calculate the average hours each day that the employee was scheduled to work over the period of employment, up to the last six months. This value will determine the amount of paid leave they are entitled to.
It is important to note that the FFCRA does not require employers to provide leave pay to their employees when they’re able to work all of their scheduled hours from home, despite the impact of the current pandemic. In regard to covered employers, the same is true for employees who have been laid off because there is not enough work or business available. In this case, employees may be eligible for unemployment benefits, but are not eligible for paid sick leave or expanded and family medical leave.
Step two: Calculate the rate of pay
If an employee is unable to work because:
- They are under a Federal, State, or local quarantine or in isolation due to COVID-19 (they will need to provide the name of the entity ordering the quarantine).
- They have been advised by their healthcare provider to self-quarantine due to concerns related to COVID-19.
- They are experiencing symptoms of COVID-19 and are seeking a diagnosis.
THEN you must calculate their rate of pay as follows:
- Employee’s regular rate of pay
- This is calculated by dividing the total compensation in the workweek by the total hours worked in the workweek. This means that the employee’s rate is the average of the employee’s regular rate over a period of up to six months (before the date in which their leave starts).
If an employee is unable to work because:
- They are caring for an individual who is under a Federal, State, or local quarantine or in isolation due to COVID-19 (they will need to provide the name of the entity ordering the quarantine, the name of the person subject to quarantine, and their relationship to that individual).
- They are caring for a child due to school closures (they will need to provide the names of the children being cared for, their ages, and the name of the school).
- They are experiencing any other substantially similar condition, as specified by the U.S. Department of Health and Human Services.
THEN you must calculate their rate of pay as follow:
- Two-thirds of the employee’s regular rate of pay.
- Total paid to the employee under this leave (with a maximum of $200 per day and $2000 in the aggregate).
Step three: Retain all required items for documentation purposes
If your employee files leave under the FFCRA, you must retain the following:
- Documentation to show how you determined the amount of qualified health plan expenses that the employer allocated to wages.
While working with payroll, be mindful of the following:
- Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that you submitted to the IRS.
- Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that you submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).
For more information and support during this time, please refer to the following resource: Preparing to Re-Open After COVID-19.
If you are a current HR for Health client and have additional questions, please reach out to our team by calling 877-779-4747. Please keep in mind that due to an influx in questions related to the COVID-19 outbreak, our response time may be slower than usual, but we will get back to you as soon as we can!
If you are not a current HR for Health client and have additional questions, please schedule an HR consultation with us by booking time here or calling us at 877-779-4747, option 1.
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HR for Health is one of the nation’s leading Human Resources Management Systems (HRMS) used by small to mid-sized practices. HR for Health has provided the following complimentary articles to ensure you have a game plan when addressing complex HR matters.
Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health’s HR services