Families First Coronavirus Response Act

The President has signed the Families First Coronavirus Response Act (FFCRA), intended to ease the economic consequences stemming from the novel coronavirus disease (COVID-19) outbreak by providing family and medical leave, and sick leave, to employees and providing tax credits to employers and self-employeds providing the leave. Here are details:

Emergency paid sick time under the Emergency Paid Sick Leave Act (EPSLA):

Requires employers with fewer than 500* Eligible Employees (regardless of the employee's length of employment) to provide full-time employees up to two weeks of paid sick time (part-time employees are entitled to sick time based on their average hours worked over a 2-week period) to the extent that the employee is unable to work or telework due to: 

Employee Situation

Employee Benefit

  • The employee is subject quarantine or isolation order related to COVID-19; OR

Eligible Employee may receive 100% of their full pay or up to a maximum of $511 per day.

($5,110 total)

  • The employee has been advised by a health care provider to self-quarantine related to COVID-19; OR        
  • The employee is experiencing symptoms and seeking a medical diagnosis related to COVID-19.
  • The employee is caring for an individual who is affected by one of the three categories above; OR

Eligible Employee may receive up to 2/3 of their pay or up to a maximum of $200 per day.

($2,000 total)

  • The employee is caring for a son or daughter whose school is closed or child care provider is unavailable due to COVID-19 precautions;

OR

  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

  • Employers cannot require employees to find a replacement worker or use other sick leave before this sick time.
  • Employers may exclude health care providers and emergency responders.
  • The sick leave mandate takes effect not later than 15 days after March 18, 2020 (the date of the Act's enactment) and expires December 31, 2020.

*There may be an exemption for certain employers with fewer than 50 employees, but details have not yet been provided by the Department of Labor.

Family and medical leave under the Emergency Family and Medical Leave Expansion Act (EFMLEA): 

Requires employers with fewer than 500* Eligible Employees (employees employed for at least 30 days) to provide full-time employees up to ten weeks of paid sick time (Part-time employees are entitled to sick time based on their average hours worked over a 2-week period) to the extent that the employee is unable to work or telework through December 31, 2020 to:

Employee Situation

Employee Eligibility

An employee is unable to work or telework due to a need for leave to care for a son or daughter under age 18 because a school or place of care has been closed, or a childcare provider is unavailable, due to an emergency with respect to COVID-19 that is declared by a federal, state, or local authority.

The first 10 days of the employee's leave may consist of unpaid leave, after which paid leave is required to a maximum of 10 weeks. The paid leave is calculated based on an amount not less than two-thirds of an employee's regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work, not to exceed $200 per day and $10,000 in the aggregate.


Employer Tax Credit:

Employers are eligible for a credit of social security taxes for any paid sick leave or family leave, along with any additional qualified health plan expenses incurred as a result of the leave.  To the extent the wages plus any additional qualified health plan expenses incurred exceed the social security taxes, the employer may be eligible for a refundable overpayment.  Employers don't receive the credit if they're also receiving the credit for paid family and medical leave.  The exact timing of when this is effective is not yet published, so it is unclear if the benefit can be claimed on 2020 first quarter filings.

Self-Employed Individuals

The Act also provides for similar refundable credits against the self-employment tax. It covers 100% of a self-employed individual's sick-leave equivalent amount, or 67% of the individual's sick-leave equivalent amount if they are taking care of a sick family member, or taking care of a child following the child's school closing for up to 10 days. The sick-leave equivalent amount is the lesser of average daily self-employment income or either (1) $511/day to care for the self-employed individual or (2) $200/day to care for a sick family member or child following a school closing, paid under the EPSLA.

As always, please consult a professional if you have any concern over your compliance with this new law.

Recovery Rebates
Tax Deadline Extended IRS Notice 2020-18