Families First Coronavirus Response Act

Families First Coronavirus Response Act

President Trump signed a new law on March 18, 2020 called the Families First Coronavirus Response Act. (FFCRA). The new law will provide for emergency paid sick leave for employees and tax credits for employers.

The FFCRA can be divided into two laws.  The first being the Emergency Family and Medical Leave Expansion Act (EFMLEA), and the second being The Emergency Paid Sick Leave Act (EPSLA.)

The EFMLEA amends the Family and Medical Leave Act of 1993 and uses the existing Family and Medical Leave Act (FMLA) to provide certain employees with the right to take up to 12 weeks of job protected leave.  Under the law, employees may take leave if the employee is unable to work (or telework) because they must care for a minor child whose school or care provider is closed due to the Coronavirus emergency.  Under the law, the first 10 days of leave are unpaid, and after 10 days, the employer is required to provide paid leave in an amount not less than two-thirds of an employee’s regular rate of pay, up to $200 per day, not to exceed $10,000 in aggregate. This is referred to as qualified public health emergency leave.

The EFMLEA applies to eligible employees who work for government agencies and employers with fewer than 500 employees; and who have been on the job for at least 30 days.  The legislation gives the Secretary of Labor authority to exempt businesses with fewer than 50 employees from the law if the requirements would jeopardize the viability of the business.

The second part of the law, EPSLA, requires certain employers to provide employees with two weeks of paid sick time, (qualified paid sick leave,) if the employee is unable to work for the following Coronavirus related reasons:

  1. The employee is subject to quarantine or isolation by a government order related to COVID-19
  2. The employee has been advised by a health care provider to self-quarantine due to COVID-19
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
  4. The employee is caring for an individual who is subject to an order listed in item 1 and 2
  5. The employee is caring for their son or daughter if the school or place of care is unavailable due to COVID-19 precautions.
  6. The employee is experiencing other substantial similar conditions as specified by the Secretary of Health and Human Services

Part-time employees can receive paid sick leave but will be limited to the average number of hours that the employee worked over a two-week period. This paid sick time cannot be carried over to the next year and will be available for use immediately, by the employee.

Compensation shall not be more than $511 per day and no more than $5,110 per person for bullet points 1, 2, and 3 above. Compensation for bullet points 4, 5, and 6 above, shall not be more than $200 per day and no more than $2,000 per person.

The EPSLA’s requirements only apply to employers with fewer than 500 employees and exceptions could be made for employers with less than 50 employees, just as the provisions mentioned earlier under the EFMLEA.  However, the difference is there is not a 30-day work requirement for the employee, and employees are covered no matter how long they have worked for the employer.

The good news for business owners is that in order to help their business’ cope with the expense of this new law, employers will be provided tax credits to offset the cost of these provisions.  The credit will be a payroll tax credit in the amount of 100% of EPSLA, and EFMLEA wages.

ADKF will continue to monitor the pending changing legislation arising due to the Coronavirus. As things change, we will continue to provide updates.


ADKF
is the largest, locally owned public accounting firm in San Antonio, Texas, with branch offices in Boerne and New Braunfels. We have been serving our community since 1991. We are a full-service CPA firm dedicated to providing a broad range of tax, audit, bookkeeping, tax controversy, and consulting services with superior customer service to help our clients meet their goals and objectives. Please click here to set an appointment with us.

Have Any Questions?