As we speed toward the end of the year, we’re facing the end of several federal programs designed to provide financial relief to businesses affected by COVID-19. One of these laws, the Families First Coronavirus Response Act (FFCRA), will expire on December 31, 2020.
Overview of the Families First Coronavirus Response Act
The FFCRA reimburses small businesses that provide paid sick leave and emergency family and medical leave for their employees experiencing hardships due to COVID-19. Most employers who have fewer than 500 employees are eligible for these funds, which will be distributed as dollar-for-dollar tax credits.
Emergency Paid Sick Leave Act (EPSLA) funds cover up to 80 hours of full or partial pay for employees who cannot work because of COVID-19 related issues. Emergency Family and Medical Leave Act (EFMLA) funds available through the FFCRA are meant to extend EPSLA benefits for up to 10 weeks for childcare issues and school closings only.
Key FFCRA stipulations include:
- Paid sick leave is based on an employee’s normal pay rate or the applicable state or federal minimum wage, whichever is higher.
- Employees receive 100% of their normal pay rate if they are under an official government quarantine order, if their medical provider has told them to quarantine, or if they are seeking diagnosis and treatment of COVID-19 symptoms — up to $511 daily and $5,110 total.
- Employees receive 2/3 of their regular pay — up to $200 daily and $2,000 total — if they need to care for a quarantined or ill family member.
- Employees qualify for up to 12 weeks of paid sick leave and expanded family and medical leave, paid at 2/3 of their normal pay rate for school and childcare closures — up to $200 daily and $12,000 total.
Why did Congress pass the FFCRA?
The FFCRA was drafted to provide worker flexibility and “flatten the curve.” A paper published in the December 2020 issue of the health policy research journal, Health Affairs, reports that in states where workers took advantage of FFCRA funds, there was a statistically significant lower daily average of confirmed cases. Researchers estimated that the program had prevented one COVID-19 case for every 1,300 workers.
In May 2020, the U.S. House of Representatives passed a bill to extend the FFCRA through the U.S. Health and Economic Recovery Omnibus Emergency Solution (HEROES) Act. However, the U.S. Senate has yet to consider the bill, which would extend FFCRA employee leave provisions through 2021.
There’s no way to know if Congress will successfully negotiate an extension of the FFCRA — or what an extension would look like. In the meantime, employees and employers should start preparing for how they’ll manage financially should the FFCRA program end on December 31.
What employees should do now
Small business employees who need to take time off due to COVID-19 should communicate with their employers as soon as possible. If you’ve already taken time off that you think makes you eligible for this program, verify this with your employer.
Ideally, your employer won’t count your COVID-19-related leave toward any time off you’re entitled to as a benefit of your job. However, the bill does not dictate how employers should handle these circumstances. Make sure you understand how your company will handle your leave of absence.
If your employer has not communicated how they plan to approach leave under the FFCRA, make sure you are eligible before moving forward. Use the eligibility tool provided by the U.S. Department of Labor.
FFCRA funds are available only to companies with fewer than 500 total employees — companies with fewer than 50 employees may be exempt, and companies with more than 500 employees are always exempt. If you work for a larger or smaller company that isn’t offering COVID-19 related help, you may need to use sick days or take leave without pay.
What employers should do now
Maintain thorough records of COVID-19-related leaves of absences you have covered for your employees. You’ll need to provide accurate details when you file your year-end taxes to receive reimbursement through tax credits.
The FFCRA enables employees to stay in their jobs despite needing to take a leave of absence. While employee leave programs can be expensive, they are often a good long-term financial decision to prevent high turnover, especially among highly-skilled trained employees.
Businesses that take a proactive approach to employee retention will be able to hit the ground running when the global economic cycle is finally restored.
In the meantime, employees and employers should stay informed about extensions or changes to the FFCRA program. The U.S. Department of Labor’s COVID-19 and the American Workplace page publishes up-to-the-minute updates.