Families First Coronavirus Response Act (FFCRA):
Employee Paid Leave
2021 FFCRA Update
2020 W-2 Statements provided by PayXperts will include a FFCRA notice for those employees who received FFCRA paid leave, as required by law.
The FFCRA was enacted back in April. It was an expansion of the FMLA which requires certain employers, generally with 50 or more employees, to follow the federal laws relating to family leave. The FFCRA however, covers all employers with fewer than 500 employees.
When it was announced, there was an exemption for businesses with less than 50 employees if providing the leave to employees would "jeopardize the viability of the business as a going concern". Many small businesses were taking advantage of that loophole and not following the FFCRA procedures. Also, most employers had applied for PPP and EIDL loans and already had a federal program covering their payroll.
The FFCRA has since been tweaked - as all government programs this year seem to have been. There is still an exemption for businesses with fewer than 50 employees. But it appears only to apply if giving leave to employees who are caring for children whose schools or day cares have closed due to COVID would harm the business. From what I understand, it no longer exempts companies from providing leave to employees who are out sick, or quarantined due to COVID.
Please see the flyer below. This must be posted where employees can see it. It is a little confusing, but in a nutshell:
1. Employees who are sick or quarantined (& unable to telework) - pay them their average salary up to maximum $511/day, and $5,110 total. This covers part-time employees as well. Each employee qualifies for up to 80 total hours (or their part-time equivalent).
2. Employees who are caring for a sick or quarantined family member, or a child whose school or day care has closed - pay them 2/3 their average salary up to a max. $200/day, and $2,000 total. This also covers part-time employees. However, for employees with children home due to closings, there is a 10-week extension available.
I know this all sounds confusing. The good news is, you will be reimbursed for all of these wages. You will also be reimbursed for the employer's portion of medicare tax and daily health insurance costs during the leave. The reimbursements will come by way of a credit against your 941 tax payments. If that is not enough to cover it, you can submit form 7200 for a refund, or we can request the refund when submitting your 4th quarter form 941.
Here is a great Q&A for questions you may have: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions?mc_cid=cb05bacd65&mc_eid=[UNIQID]
With the cases of COVID on the rise, it's important to let employees recover at home to avoid a widespread outbreak. This credit can help you afford to do that.