President Trump signed the Families First Coronavirus Response Act (FFCRA) on March 18, 2020. The FFCRA amends portions of the existing federal Family and Medical Leave Act to provide paid sick leave and paid family and medical leave to employees affected by COVID-19. It contains two major provisions: the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. Both provisions became effective April 1, 2020, and expire December 31, 2020.
Paid sick leave and paid family and medical leave available under the FFCRA are different from unemployment benefits available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that President Trump signed March 27, 2020. The FFCRA does not apply to individuals who became unemployed when their employers closed their businesses because of COVID-19. Unemployed individuals can apply for unemployment benefits under the CARES Act.
Q: Does the FFCRA apply to all private and public employers?
A: The Emergency Paid Sick Leave Act covers all private employers with fewer than 500 employees. It also covers public sector employees.
The Emergency Family and Medical Leave Expansion Act covers only private employers with fewer than 500 employees. Private and public health care employers and emergency responders may exclude their employees from both parts of the FFCRA.
The Emergency Family and Medical Leave Expansion Act contains a small business exemption for employers with fewer than 50 employees. The exemption excludes leave benefits for employees who are caring for children at home because COVID-19 caused the closure of their school or day care provider, if the payments jeopardize the ongoing viability of the business.
Q: Do the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act cover full-time and part-time employees?
A: The Emergency Paid Sick Leave Act covers full-time and part-time employees. A full-time employee is defined as one who works 40 hours or more each week. A part-time employee is defined as one who works fewer than 40 hours each week.
The Emergency Family and Medical Leave Expansion Act does not distinguish between full-time and part-time employees; however, the number of hours worked each week will determine the benefits a part-time employee receives.
Q: How long must you be employed to request leave under the FFCRA?
A: The FFCRA covers all employees who were on their employer’s payroll for 30 calendar days before the leave period begins.
Q: What type of relief does the FFCRA provide?
A: The FFCRA provides relief to employees who cannot go to their employer’s place of business (and cannot work from home) because of COVID-19. Six circumstances qualify for eligibility under the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act:
- Quarantine ordered by a federal, state, or local government
- Self-quarantine advised by a health care provider
- Experiencing COVID-19 symptoms while seeking a medical diagnosis
- Caring for someone who is under a government quarantine order or who is in self- quarantine, as advised by a health care provider
- Caring for children at home because COVID-19 caused the closure of their school or childcare provider
- Experiencing “any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Labor and Treasury”
Q: How long can you receive benefits under the Emergency Paid Sick Leave Act or the Emergency Family and Medical Leave Expansion Act?
A: The Emergency Paid Sick Leave Act allows a maximum of 80 hours (two weeks) of paid sick leave for full-time employees who experience any of the six qualifying circumstances above. Part-time employees are eligible for a leave period based on the average hours they normally work during a two-week period.
The Emergency Family and Medical Leave Expansion Act allows an additional 10 weeks of paid leave for full-time employees who cannot work because they are at home caring for children whose school or childcare provider closed because of the COVID-19 pandemic. Part-time employees’ eligibility for additional leave under the Emergency Family and Medical Leave Expansion Act is based on the hours they normally work during a 10-week period.
Q: What are the maximum benefits you can receive under the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act?
A: An employee may take up to two weeks of paid sick leave if they are in a government-ordered quarantine, in self-quarantine as advised by a medical provider, or experiencing symptoms of COVID-19 (circumstances 1–3 above). For employees in these situations, the maximum paid sick leave is capped at $511 per day or $5,110 for the two-week sick leave period.
An employee who takes paid sick leave because he or she is caring for someone who is in a government-ordered quarantine or has been advised by a health care provider to self-quarantine; caring for a child because of school or childcare provider closings; or experiencing substantially similar conditions, as specified by the Secretary of Health and Human Services (circumstances 4–6 above), may receive two-thirds of his or her regular pay for a two-week period. The maximum paid sick leave an employee may receive for circumstances 4–6 is capped at $200 per day or $2,000 for the two-week sick leave period.
An employee who seeks an additional 10 weeks of coverage under the Emergency Family and Medical Leave Expansion Act may receive up to two-thirds of his or her regular pay. The maximum paid family and medical leave an employee may receive is capped at $200 per day or $12,000 for the 12-week period.
Q: Does the FFCRA provide relief for self-employed individuals?
A: The FFCRA provides equivalent tax credits for sick leave needed by self-employed individuals. The caps of $511 per day and $5,110 overall for circumstances 1–3 and $200 per day and $2,000 overall for circumstances 4–6 apply to equivalent tax credits a self-employed individual may receive.
The FFCRA also provides equivalent tax credits to self-employed individuals for a family and medical leave period. A self-employed individual may receive a tax credit for family and medical leave that covers up to a 10-week period. The daily rate for the self-employed tax credit is $200, and the total maximum credit is $10,000.
Q: Does the FFCRA cover independent contractors?
A: No, neither section of the FFCRA covers independent contractors because they are not considered employees under the federal Fair Labor Standards Act.
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This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Michael A. Cano is a financial advisor with Cano Wealth Strategies, LLC at 123 Mercer Street, Hightstown, NJ 08520. He offers advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, a Registered Investment Adviser. He can be reached at 609-371-2101 or at [email protected].
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