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What the New Families First Coronavirus Response Act Means for Business Owners and Employees

What the New Families First Coronavirus Response Act Means for Business Owners and Employees

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President Trump just signed into law a second phase of coronavirus-related relief, called the Families First Coronavirus Response Act.

It’s a $100 billion relief package designed to offer help to businesses and their employees who are impacted by the coronavirus. The first phase of relief, an $8.3 billion piece of legislation, was dedicated to coronavirus vaccine research and development.

This new legislation includes provisions for tax credits for employers who offer paid sick leave or family or medical leave for their employees who miss work for various coronavirus-related reasons.

Let’s take a closer look at the FFCRA and what it means for businesses and employees, and what business owners need to be ready to offer to employees by April 2.

Check out our free resource center to keep you up-to-date during the COVID-19 pandemic.

When Does the FFCRA Go Into Effect?

Before we talk about what’s in the legislation, let’s talk about when the law goes into effect.

President Trump signed the legislation on Wednesday, March 18. The law goes into effect 15 days later, which means businesses have to be ready to comply on Thursday, April 2.

With only 15 days’ notice to comply, it’s important for business owners and employees alike to understand the law’s ramifications.

Who Qualifies for FFCRA Coverage?

The FFCRA, which you can read in its entirety here, essentially expands the existing Family and Medical Leave Act.

According to the National Law Review, there are six qualifying reasons for coverage under the FFCRA. At least one of the following must apply to an employee in order to gain coverage:

  1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
  3. The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis
  4. The employee is caring for an individual who is subject to a federal, state or local quarantine order, or the individual has been advised to self-quarantine due to concerns related to COVID-19
  5. The employee is caring for the employee’s son or daughter, if the child’s school or child care facility has been closed or the child’s care provider is unavailable due to COVID-19 precautions
  6. The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and the Department of Labor

Benefits for Employees

Employees can expect several benefits from the passage of the FFCRA:

  • Employees who are on sick leave because they are sick from coronavirus can receive their full pay, up to $511 per day, or $5,110 total, but normal FMLA is unpaid
  • Employees who take leave to care for children whose schools or day care facilities are closed are paid at two-thirds of their regular pay rate, with a maximum of $200 per day or $10,000 total

Employers cannot force employees to exhaust their vacation or other sick time before receiving this benefit. Also, there’s a 10-day waiting period before this benefit applies, but employees can use existing sick or vacation time to cover those days.

Benefits for Businesses

Employers can look forward to a few benefits from the FFCRA:

  • Employers will receive tax credits for 100% of what’s paid out to each employee (up to $511 per day, or $5,110 total, per employee)
  • The Secretary of Labor can exempt the businesses with 50 or fewer employees from these requirements
  • Employers with fewer than 25 employees are not required to restore employees to their previous positions

It’s important to note that the FFCRA does not require employers to offer paid leave to employees who are out of work simply due to an office closure.

This legislation also includes measures for free coronavirus testing, increased Medicaid funding, food assistance and benefits for unemployed workers.

What Should Business Owners Do Now?

Business owners should take time now to understand the FFCRA and its ramifications. The new law goes into effect April 2.

What Additional Legislation Lies Ahead?

In this time of rapid change and unprecedented events, nothing is certain. However, a third phase of relief is expected to include direct monetary payments to Americans. We’re closely watching for new developments that affect our clients, and will keep you posted as we learn more.

Need Help?

To discuss how the FFCRA applies to your business or situation, contact us here or call 800.899.4623.

COVID-19 updates

Published on March 20, 2020