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FFCRA: Four Things Employers Need to Know

By Dave Clifton
Content Strategy Specialist
SpaceIQ

Despite local economies beginning to reopen, we’re far from the end of the COVID-19 pandemic. There are thousands of new confirmed cases each day, and it’s possible the numbers will spike as people begin to go back to work.

It’s a difficult predicament for employers, who are stuck between caring about employee safety and the need to resume operations or face bankruptcy. Thankfully, there are several government programs meant to protect employers and their workers, including the Families First Coronavirus Response Act (FFCRA).

This piece of legislation is one that has already been important and will continue to be as employees make the transition back to work. Here are four things every employer should know about the FFCRA and how it works.

1. What is the Families First Coronavirus Response Act?

The FFCRA is a provision passed by the federal government to extend paid sick leave for employees whose lives have been directly impacted by coronavirus. According to the U.S. Department of Labor:

The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.

To understand the FFRCA, it’s important to define a few significant parts of the definition.

First, “certain employers” refers to both public and private sector companies with 500 employees or fewer. It does not include government employees, who are otherwise covered under Title II of the Family and Medical Leave Act.

Second, “employees” refers to all employees. There is no distinction made between full- and part-time workers; however, hourly status does affect the duration of leave and the rate of pay.

Finally, there are two types of extended leave employees can take advantage of: “paid sick leave or expanded family and medical leave (FMLA).” There’s a difference between these that we’ll talk about below.

2. How much paid leave are employees eligible for?

Employee paid-leave rights under the FFCRA span both sick leave and FMLA extensions. The legislation dictates that employees are eligible for:

  • 80 hours of paid sick leave at the employee’s regular rate due to state-, federal-, or medical-mandated quarantine, or a positive or pending COVID-19 diagnosis.
  • 80 hours of paid sick leave at two-thirds of the employee’s regular rate due to care obligations caused by an immediate family member with COVID-19 or the closure of a school or daycare center that renders them without adequate child care.
  • Up to an additional 10 weeks of paid FMLA at two-thirds of the employee’s regular rate due to the closure of a school or daycare center that renders them without adequate child care. To qualify, employees must have 30 days of tenure in the calendar year.

Under the FFCRA, employees should provide their employer with as much notice as possible before taking leave. Employers should request frequent check-ins and follow-up notices to confirm the reasons for taking FFCRA leave.

3. How do employees qualify for FFCRA leave?

There are stringent paid leave requirements for employees to comply with FFCRA. First and foremost, they must be unable to work and must not have the option to telecommute. Employees in good health who have the option to work from home do not qualify for FFCRA leave.

To be “unable to work,” employees must meet one of the criteria specified under FFCRA guidelines. The six qualifications include:

  1. Subject to a Federal, State, or local quarantine or isolation order related to COVID-19
  2. Advised by a health care provider to self-quarantine related to COVID-19
  3. Experiencing COVID-19 symptoms and/or seeking a medical diagnosis
  4. Caring for an individual subject to (1) or self-quarantine as described in (2)
  5. Caring for a child whose school or place of care is closed or unavailable
  6. Experiencing any other substantial illness that prevents them from working

Employees must prove that they qualify for any of the above reasons; however, employers should take most notices in good faith, as it may be difficult for employees to provide immediate proof due to the circumstances of the pandemic.

4. How much does FFCRA leave pay?

Employees who qualify for FFCRA leave are subject to pay based on their usual rate. This can mean different payouts for different employees across the company. The Department of Labor has issued general guidance, as follows:

  • For reasons (1-3) above, employees are entitled to their full regular pay or the applicable minimum wage, whichever is higher. This occurs over a two-week period, up to $511 per day or $5,110 in the aggregate.
  • For reasons (4 or 6) above, employees are entitled to two-thirds of their pay or the applicable minimum wage, whichever is higher. This occurs over a two-week period, up to $200 per day or $2,000 in the aggregate.
  • For reason (5) above, employees are entitled to two-thirds of their pay or the applicable minimum wage, whichever is higher. This occurs over a 12-week period, up to $200 per day or $12,000 in the aggregate.

The FFCRA is in effect until Dec. 31, 2020, which means employers will likely find themselves facing FFCRA leave requests in the back half of the year—especially if there’s a spike in coronavirus cases as economies open up. Above are the most important factors to know.

Keep reading: COVID-19 Workplace Management Resources

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COVID-19 Employee Waivers and Retention Credits

By Dave Clifton
Content Strategy Specialist
SpaceIQ

Today’s workplaces are a lot like the Wild West. Between telecommuting policies, return-to-work programs, and changes to how and where people work, no one really knows what to expect. The introduction of government stimuli via the CARES Act provided some stability and relief for businesses…but without a lot of guidance. It all adds up to uncertainty and a lot of lingering questions.

Is a business eligible for employee retention credits if their staff chooses to work from home? Can you compel them to sign a COVID-19 employee waiver? These are big questions that need answers. Without clear-cut guidance, employers need to seriously consider their approach. There’s no way to tell what tomorrow’s guidance will bring. It’s smart to prepare for anything and make good decisions today.

What is a COVID-19 employee waiver?

A COVID-19 employee waiver is a simple concept. Employers ask their employees to sign a waiver of liability before returning to the workplace so that the employer isn’t at fault if they become ill. While conceptually simple, there’s one major problem with these types of waivers.

Employees are not permitted to preemptively waive their rights under state workers’ compensation laws. Moreover, even if they did sign a waiver, it wouldn’t be enforceable. Even more problematic for employers, by asking employees to sign such a waiver they’re inadvertently conceding that the workplace is unsafe.

While every employer has an interest in protecting itself from liability, a COVID-19 employee waiver isn’t the right approach. Not only is it unenforceable, it’s actually more of a liability for employers.

The better solution is to make changes to the workplace and policies that create a safer environment. Social distancing, a reimagined workplace, new policies on workplace cleaning plan and sanitization, and health checks do more to safeguard employees against coronavirus than a liability waiver. Follow recommendations and guidance from the CDC, OSHA, WHO, and the EEOC on how to create a workplace that’s safe for employees and reduces employer liability.

What is the employee retention credit?

Like the Paycheck Protection Program (PPP), the Employee Retention Credit (ERC) is the product of the CARES Act. According to current IRS guidance:

The Employee Retention Credit under the CARES Act encourages businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Employers that maintain the same payroll figures through the coronavirus pandemic can claim a valuable tax credit. While the guidance is straightforward enough, many employers have valid questions about claiming the ERC. Here are some of the most common:

Can I claim the ERC if my employees continue to work?

If your business has fewer than 100 employees, then yes. Current guidance for the ERC is based on wages paid to all employees, regardless of whether they performed services. This means that as long as you kept them on payroll during the coronavirus pandemic, they still count for the purposes of the credit.

For businesses with greater than 100 employees, only those employees furloughed count toward the ERC. Employees working from home are not eligible.

Can I claim the ERC if my employees use FMLA or FFCRA time off?

No. If your business accepts credits for paid and family sick leave, you are not able to count those employees as part of an ERC claim. The same goes for companies that received PPP funding.

The IRS continues to issue new guidance on who qualifies for the ERC, as well as how to claim it. Employers, their accountants, and their HR department need to stay on top of timely guidance and maintain good accounting records to ensure compliance. Get more information about the ERC and the rules surrounding it here.

Stay apprised of changing guidance

With a full-scale return to work imminent for many employers, now’s the time to seek answers to some of the more complex questions you may face. What standards can you reasonably expect employees to conform to? What are your obligations as an employer to avoid liability? What standards must you meet to qualify for government relief programs like the PPP or ERC?

While it may all seem like a tangled web of information with little clarity or certainty, there is good news. New guidance from congress, the IRS, state governments, and employment organizations comes down virtually every week. There’s a lot to keep up with, but we’re trending in a direction that offers more clarity. Hard and fast rules aren’t far off. For now, simple answers to important questions give employers the information they need to act accordingly.

Keep reading: COVID-19 Workplace Resources