The government recently voted a new coronavirus emergency leave bill into law, called the families first coronavirus response act, or ffcra. Many people are dealing with economic and emotional uncertainty due to the virus, especially small business owners and solo entrepreneurs. The pandemic has closed large parts of the economy, and many americans are worried about how to manage their bills.
As a small business owner or entrepreneur, you may be wondering about the requirements of the ffcra, including whether it puts any new obligations on you. The truth is, while the bill is geared towards helping most americans, it does place som new responsibilities on employers.
Here, we’ll discuss the most important parts of the ffcra, and how they relate to you.
Who is eligible for paid sick and family leave under the ffcra?
It’s important to be aware that the ffcra does not apply to all employers in the united states. It only applies to private employers with less than 500 employees and all public employers (although there are certain exemptions).
The reasoning behind this limitation is that most large companies already have comprehensive paid sick and family leave programs. Small businesses and self-employed individuals are likely to be hardest hit by the economic downturn caused by the novel coronavirus. Small businesses may also be the least likely able to independently afford paid sick and family leave for their employees.
What is the effective date of the ffcra?
As a small business owner, when must you start offering the leave required by the ffcra? As an entrepreneur, when can you tap into the benefits of the act?
The ffcra is meant to be of temporary assistance. Therefore, the new law goes into effect on april 1, 2020 and expires on december 31, 2020.
What do the paid sick leave provisions of the ffcra entail?
The emergency paid sick leave provisions of the ffcra are designed to provide relief to employees who need to take emergency leave to care for their own health, care for a family member’s health, or care for a child due to the novel coronavirus pandemic. As a small employer, this is an important part of the act to be aware of.
Specifically, these provisions apply to employees who cannot work because they:
(i) are subject to a quarantine or isolation order;
(ii) have been told by their doctor they should self-quarantine;
(iii) are experiencing symptoms of coronavirus and are attempting to get tested or otherwise find a diagnosis;
(iv) are caring for a family member who is subject to a quarantine or isolation order, or has been told by their doctor that they should self-quarantine;
(v) have to care for a child who has had their school closed or whose normal caretaker is not available due to the coronavirus; or
(vi) are experiencing anything similar to any of the above, as determined by the department of health and human services, in conjunction with the secretary of labor and secretary of the treasury.
Under the ffcra, employees are allowed to take up to two weeks of paid sick leave. There is no eligibility requirement for the employees; in other words, they do not have to have been employed for a certain amount of time or accrued a certain number of days or hours of leave. If you have employees who have just begun, they are still entitled to this leave.
Employees who are considered “full-time” can receive 80 hours of sick leave. Employees who are considered “part-time” will receive leave equal to the average number of hours they usually work in a two-week period. Employees can make their normal wage or salary for the time they take off, but there is a cap of $511 per day and $5110 total.
Importantly, you can’t force employees to use any other paid leave before they use the ffcra leave. You also can’t require employees to find a replacement to cover their work during the time of their leave.
Additionally, the leave under the ffcra can’t be applied retroactively. This means that if you have employees who took sick leave or otherwise unpaid leave prior to april 1, they can’t use the ffcra to get paid. Since the ffcra expires at the end of 2020, this leave will also not rollover.
Most importantly, be aware that the act specifically prohibits retalation against any employee for taking ffcra leave or filing a complaint related to the ffcra.
What do the paid family leave provisions of the ffcra entail?
The ffcra also provides family leave. Specifically, it expands coverage of the family and medical leave act, or fmla. Eligible employers must allow for 12 weeks of fmla leave because the employee needs to care for a child who has been displaced from school or their childcare provider due to covid-19. This provision is only applicable to employees who have been employed for at least 30 days.
The first 10 days that the worker is on leave could be unpaid (though the employee may use accrued paid leave if it is available). After that, employees are to receive at least 2/3 of their normal wage or salary, up to $200 per day and $10,000 total, while they are out.
Employees should be allowed to return to their previous position, but this may not apply if you have less than 25 employees and the employee’s former position has been cut due to economic concerns caused by covid-19, as long as you make an effort to put the employee back in a similar role.
Are there any exemptions to the ffcra?
The secretary of labor is permitted to exclude certain health care workers and first responders from the ffcra. Additionally, small businesses with less than 50 employees may be exempt if providing leave would jeopardize the viability of the business.
If you have a small business of less than 50 employees, you may be exempt from the ffcra, but the government has not yet provided information on what you need to do the assert the exemption. You may have to specifically apply to be exempt.
How will the leave be paid for?
Eligible employers will receive tax credits for 100% of the amount they expended on their employees’ leave during the applicable time period. In other words, although you may need to pay for your employees’ leave right now, you will get all of that money back.
What about self-employed?
If you are self-employed, you can claim a tax credit to help you in this economic recession. Specifically, you can ask for a refundable credit up to 100% of your total sick leave, but no more than the lesser of your average daily income or $511 per day (no more than $5110 total). If you need to care for a sick family member or child, you can receive up to $200 for ten days, or $2000 total. Finally, you are eligible to take up to 50 days of family leave, not to exceed the lesser of $200 per day or your average daily income, and not to exceed $10,000 total.
The federal government is continuing to provide guidance on the ffcra, including clarification for employers who may be seeking exemption. This is just the first of several bills expected for the government to help americans deal with the covid-19 crisis.
As a small business owner or an entrepreneur, it’s important to be on top of the new bills that are coming out regarding coronavirus. Thankfully, it seems there will be a lot of help available for people struggling economically due to the coronavirus, and we’re here to provide as much insight as possible.