The COVID-19 pandemic has brought unprecedented challenges to the world, and one of the most significant impacts has been on the workforce.
To address the needs of American workers and families, the United States government passed the Families First Coronavirus Response Act (FFCRA) in March 2020. The FFCRA provides a range of emergency measures, including paid sick leave, expanded family and medical leave, and tax credits for employers to help them comply with the new regulations.
In this blog, we will discuss the key provisions of the FFCRA and their impact on workers, employers, and the economy. We will also explore the criticisms of the act and its implementation challenges. Understanding the Families First Coronavirus Response Act is critical for workers and employers, as it can provide a safety net during these challenging times.
Let’s take a closer look into the details of this important legislation and its significance.
- The FFCRA allocated funding to address food insecurity among Americans affected by the pandemic.
- COVID-19-related family medical and paid sick leave was mandated for employees to support those impacted by the virus.
- Employers were eligible for tax credits to reimburse them for providing sick leave and family medical leave, subject to certain limits.
- Free COVID-19 testing was made available to all individuals, though treatment costs were not covered.
- The act also extended unemployment benefits and provided additional funding to states to address the pandemic’s economic impact.
What Is the FFCRA?
Before discussing its key provisions, let’s first cover the definition of the FFCRA.
The FFCRA (Families First Coronavirus Response Act) is the second major initiative to address the COVID-19 pandemic’s impact on American society.
Effective from April 1 to December 31, 2020, it included provisions such as expanded nutrition assistance, paid sick leave, enhanced unemployment insurance coverage, free coronavirus testing, and increased federal Medicaid funding. These measures were aimed at supporting workers and families struggling to cope with the unprecedented challenges of the pandemic.
Provisions of the Act
Now, let’s take a closer look at the key provisions of the act:
Emergency Paid Leave
The FFCRA includes two significant provisions that offer a paid sick leave of up to two weeks (equivalent to 80 hours) and an additional 12 weeks of expanded family and medical leave. These provisions are available for eligible employees who are unable to work due to COVID-19-related reasons, with ten of the twelve weeks of family and medical leave being paid.
Emergency Paid Sick Leave Act (EPSLA)
Under the Emergency Paid Sick Leave Act (EPSLA), employers with less than 500 employees were required to provide their eligible workers with up to two weeks (equivalent to 80 hours) of paid sick leave. The paid sick leave is available for the following reasons related to COVID-19:
If the employee is unable to work due to being quarantined or is experiencing symptoms of COVID-19, they’re entitled to paid sick leave at their regular rate of pay, up to $511 per day, with a cap of $5,110.
If the employee is unable to work because they are caring for someone under quarantine or a child (under 18) whose school is closed due to COVID-19, or if the employee is experiencing symptoms of COVID-19 and seeking a diagnosis, they were entitled to a paid sick leave at two-thirds of their regular rate of pay, up to $200 per day, with a cap of $2,000.
Furthermore, self-employed individuals were also entitled to claim a sick leave tax credit equal to the amounts mentioned above or an equivalent percentage of their “average daily self-employment income,” whichever is less, for up to ten days.
Emergency Family and Medical Leave Expansion Act (EFMLEA)
Another provision of the FFCRA is the Emergency Family and Medical Leave Expansion Act (EFMLEA). It mandated employers with fewer than 500 employees to provide up to an additional 12 weeks of expanded family and medical leave. Eligible employees were entitled to receive ten of those weeks of leave with two-thirds of their regular pay rate if they were unable to work (including telework) due to the closure of their child’s school or childcare provider as a result of COVID-19.
Under the EFMLEA, full-time workers were eligible for 80 hours of paid leave, while part-time employees received paid leave equivalent to the average number of hours they worked in a two-week period. There was no waiting period or accrual required for paid sick leave.
However, the benefits were not retroactive and could not be carried forward. The employee was not required to find a replacement or use accrued sick leave before taking advantage of leave provided by EPSLA or EFMLEA.
The first two weeks of the 12-week expanded family and medical leave may be unpaid. However, the employee can use other available paid leaves, including the EPSLA. To be eligible for the EFMLEA, the employee must be covered under Title I of the Family and Medical Leave Act (FMLA) and must have worked for the employer for at least 30 days. This leave includes job protection as provided by the FMLA.
Self-employed individuals were also eligible to claim up to $200 per day or 67% of their “average daily self-employment income” (whichever is less) for up to 10 weeks of family leave.
Pro-tip: Employees can use their EPSLA leave or any other accrued leave in place of the 10 days of unpaid leave in EFMLEA.
Under the FFCRA, certain employers were given the option to exclude healthcare providers or emergency responders from EPSLA and EFMLEA leave. If employers chose to provide leave to these employees, it must be paid according to the guidelines for EPSLA and EFMLEA.
Also, businesses with fewer than 50 employees may qualify for an exemption from paid sick leave or family and medical leave for child care if granting the leave would jeopardize the viability of the business.
What is FFCRA Tax Credit?
Employer Tax Credits were an important component of the Families First Coronavirus Response Act (FFCRA), which was enacted to provide financial relief to employers who offered paid sick leave and expanded family and medical leave to their employees due to COVID-19. These tax credits were specifically designed to assist employers in offsetting the costs associated with providing paid leave to their employees and to incentivize them to do so.
One of the key tax credits available under the FFCRA was the FFCRA Credit. This credit allowed eligible employers to receive a refundable tax credit against their share of Social Security taxes. The amount of the tax credit was equal to 100% of the qualified sick leave wages and qualified family leave wages paid by the employer, in addition to the allocable cost of maintaining health insurance coverage for the employee during the leave period.
How to Report FFCRA Credit on Tax Return
Employers who have provided paid leave under the FFCRA need to report the total qualified leave wages and related credits for each quarter on their federal employment tax returns. Typically, this is done by filling out Form 941, the Employer’s Quarterly Federal Tax Return. To receive the tax credits, employers can offset the amount from employment taxes and withheld income taxes that are required to be deposited with the IRS. This mechanism allows employers to fund leave wages, including health plan expenses and the employer’s share of Medicare taxes.
Additionally, if employers require immediate access to the tax credits before their regular employment tax deposits are sufficient to cover the credit, they have the option to request an advance payment using Form 7200, the Advance Payment of Employer Credits Due to COVID-19 form.
Self-Employed Individuals and FFCRA Credits
Self-employed individuals who are eligible for sick or family leaves under the FFCRA may also be eligible to receive an income tax credit to offset their federal self-employment tax for any taxable year. This credit is determined based on the individual’s “qualified sick leave equivalent amount” or “qualified family leave equivalent amount.”
To claim this credit, self-employed individuals have two options. They can either withhold an appropriate amount from their estimated tax payments for the year or claim the credit on their Form 1040 when filing their taxes.
Employers Exempt From FFCRA
While the FFCRA required many employers to provide paid sick leave and expanded family and medical leave, there were certain exemptions for specific types of employers. For example, employers with 500 or more employees were exempt from providing paid leave under the FFCRA. However, it’s important to note that exemptions and regulations may have changed since my knowledge cutoff date in September 2021. It’s advisable to consult the latest official sources or seek professional guidance to ensure compliance with current regulations.
Tip: If your workplace closed before April 1, 2020, making you ineligible for FFCRA sick or family leave benefits, you may still be eligible for unemployment benefits. Remember to check the eligibility criteria and requirements set by your local unemployment office.
This provision of the FFCRA pertains to four important nutrition programs, namely the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), The Emergency Food Assistance Program (TEFAP), and the Supplemental Nutrition Assistance Program (SNAP).
It also includes an allowance to households normally eligible for free or reduced breakfast or lunch if the child’s school has been closed due to COVID-19, as well as a program that serves U.S. territories such as the Northern Mariana Islands, Puerto Rico, and American Samoa.
Further, the legislation provides waivers for several requirements, such as the physical presence requirement under WIC during recertification, anthropometric and bloodwork nutritional risk requirements under WIC, and other administrative requirements not feasible due to COVID-19. It also includes waivers for work and work training requirements for the SNAP program, as well as certain SNAP application, issuance, and reporting requirements.
The legislation provides a significant boost in unemployment benefits, with state grants amounting to nearly $1 billion. In addition to this, states with high unemployment rates, as well as workers who have already exhausted their benefits, receive additional financial aid. Interest-free loans were available until December 31, 2020, to further assist states in covering unemployment benefits.
Further, states with a 10% or higher unemployment rate compared to the previous year receive 100% federal funding for extended benefits, which is normally a 50% match. These provisions aim to provide much-needed assistance to individuals and families impacted by the COVID-19 pandemic, particularly those who have lost their source of income due to the economic slowdown.
Testing and Health Provisions
The FFCRA also includes several provisions aimed at facilitating access to COVID-19 testing. Under the Act, COVID-19 testing is provided to all individuals at no cost, with waivers in place to ensure that testing costs are covered by government programs or insurance.
Additionally, the legislation offers a temporary 6.2% increase in Medicaid payments to states, provided that states do not restrict eligibility or impose cost-sharing for COVID-19 testing services or treatment.
Last but not least, the FFCRA extends coverage of diagnostic products related to COVID-19 under the Children’s Health Insurance Program (CHIP), and provides additional funding for testing veterans, members of Native American tribes, and uninsured Americans.
These measures are intended to promote widespread access to COVID-19 testing and ensure that individuals are not financially burdened by the costs associated with testing and treatment.
The table below indicates how the funds were allocated for each provision of the FFCRA. The amounts only include directly appropriated funds, but it’s worth noting that according to the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT), the FFCRA is estimated to increase federal deficits by $192 billion from 2020 to 2030.
Nutrition – WIC program
Sep. 30, 2021
Nutrition – TEFAP program
Sep. 30, 2021
Nutrition – SNAP program
Sep. 30, 2021
Nutrition – U.S. Territories
Sep. 30, 2021
Nutrition – Seniors, Native Americans, and Disabled
Sep. 30, 2021
Paid Sick Leave
Dec. 31, 2020
Family and Medical Leave
Dec. 31, 2020
Sep. 30, 2021
Testing – Defense Dept.
Sep. 30, 2022
Testing – Indian Health Service
Sep. 30, 2022
Testing – Uninsured
Testing – Veterans
Sep. 30, 2022
Sep. 30, 2022
Grand Total + additional as needed
Source: FFCRA and H. R. 6201 Summary
The FFCRA was a critical piece of legislation in response to the COVID-19 pandemic. It provided much-needed support to Americans affected by the pandemic, including expanded nutrition assistance, paid sick leave, enhanced unemployment insurance coverage, and free COVID-19 testing.
The act required employers to provide their employees with emergency paid sick leave and expanded family and medical leave. The employer tax credits provided a valuable incentive for employers to comply with the FFCRA’s provisions, and the Medicaid and nutrition assistance provisions helped alleviate the economic impact of the pandemic on vulnerable populations.
Overall, the FFCRA demonstrated the importance of a swift and comprehensive response to a public health crisis and served as a reminder of the critical role that government can play in supporting its citizens during challenging times.
Frequently Asked Questions
Do temporary employees count toward an employer’s total?
Employers must include all temporary employees in their total count, even if a temporary staffing agency pays those employees. It’s important to note that the temporary staffing agency and the client company may have different coverage statuses under the FFCRA. For instance, the staffing agency with over 500 employees would not be covered under the FFCRA.
However, if its customer has less than 500 employees, it would be covered under the FFCRA. In cases where the two entities act as joint employers for a particular worker, the customer/employer would be responsible for providing leave to the employee under the FFCRA.
Are employees entitled to reinstatement to their position under the EFMLEA and EPSLA?
In most cases, the usual reinstatement regulations apply to employers. This indicates that an employee taking leave under the Family and Medical Leave Act (FMLA) is not entitled to more protection from layoffs, furloughs, terminations, or any other action than they would have received if they hadn’t taken the leave. As a result, an employee may be furloughed or dismissed in the event of a workforce reduction, as long as the decision isn’t affected by the employee’s leave status.
If a layoff does occur, the employee’s right to take leave (and receive corresponding pay) is essentially terminated, and they may be eligible for unemployment benefits (which could be augmented by state measures to provide funds according to an executive order).
Can an employee take an EFMLEA leave intermittently?
Intermittent leave is permitted under the Family and Medical Leave Act (FMLA) for specific types of leave as prescribed by statute.
The FFCRA does not explicitly address the permissibility of intermittent leave, but according to the Department of Labor (DOL), intermittent leave or reduced schedule leave may be taken with mutual agreement between the employer and employee only if it is deemed appropriate under the circumstances.
However, it is important to note that neither the employer nor the employee can mandate or demand intermittent leave unilaterally.
When did FFCRA expire?
The FFCRA initially expired in December 31, 2020.
Is the Family First Act still in effect or is there an FFCRA extension?
The Families First Coronavirus Response Act (FFCRA) was a law that required employers to provide paid sick leave and expanded family and medical leave to employees affected by COVID-19. It was signed into law on March 18, 2020. Initially, the FFCRA was set to expire on December 31, 2020.
The Consolidated Appropriations Act, 2021, extended employer tax credits for paid sick leave and expanded family and medical leave that were voluntarily provided to employees. This extension was in effect until March 31, 2021. However, it’s important to note that the Act did not extend the entitlement of eligible employees to FFCRA leave beyond December 31, 2020.
What is the EFMLEA, and how does it relate to the Emergency Family and Medical Leave Expansion Act?
The Emergency Family and Medical Leave Expansion Act (EFMLEA) is a modification to the Family and Medical Leave Act (FMLA) that allowed certain employees to take up to twelve weeks of expanded family and medical leave, with ten weeks being paid, for specific COVID-19-related reasons. The EFMLEA was enacted as part of the Families First Coronavirus Response Act (FFCRA) on March 18, 2020.
How does the EPSLA impact my W-2 form?
The Emergency Paid Sick Leave Act (EPSLA) mandates that certain employers must provide paid sick leave to employees for specific COVID-19-related reasons, amounting to a maximum of 80 hours. To comply with reporting requirements, EPSLA payments made to employees should be included on Form W-2, either in Box 14 or on a separate statement. These payments are considered taxable income and must be reported on the employee’s W-2 form.
To ensure accurate reporting, the IRS has provided guidance that employers should report EPSLA payments on either the W-2 form itself or a separate statement accompanying the W-2. This ensures that the amounts paid are properly documented.
The tax credits associated with the EPSLA and the Emergency Family Medical Leave Expansion Act (EFMLEA) were extended through September 30, 2021, by the American Rescue Plan Act (ARPA). However, it is important to note that both the EFMLEA and the EPSLA officially expired on December 31, 2020. As a result, these acts are no longer in effect, and employers are no longer required to provide paid sick leave or expanded family and medical leave under these provisions.
Is sick or family leave taken under the FFCRA taxable in California?
In California, sick or family leave taken under the Families First Coronavirus Response Act (FFCRA) is subject to taxes. Specifically, emergency paid sick leave wages received under the FFCRA may be taxable in California, with a maximum limit of $10,000 annually.
It’s important to note that employers who provide qualifying FFCRA sick or childcare leave to their employees are eligible for 100% reimbursement. This means employers can recover the full amount they paid for providing the leave.
Initially, the FFCRA was set to expire on December 31, 2020. However, it was extended until March 31, 2021, through the Consolidated Appropriations Act. Unfortunately, the FFCRA was not further extended beyond March 31, 2021, and has since expired.
Additionally, it’s worth mentioning that in California, providing paid sick leave under state law SB 95 is mandatory. This means that employers in California are obligated to provide paid sick leave to eligible employees under the provisions of SB 95.
Are there any tax credits available for employers who provided FFCRA benefits?
Employers who provided benefits under the Families First Coronavirus Response Act (FFCRA) are eligible for tax credits. These tax credits provide dollar-for-dollar reimbursement for qualifying wages paid under the FFCRA.
The tax credit equals 100% of the amount the employer pays for emergency paid sick leave and emergency paid family and medical leave. Employers subject to the Emergency Paid Sick Leave Act (EPSLA) requirements and the expanded Family and Medical Leave Act (FMLA) are entitled to fully refundable tax credits to cover the cost of providing the leave.
The tax credit covers the wages paid and includes the employer’s share of Medicare tax on those wages and the cost of maintaining health insurance coverage for the employee during the leave period.
What is COVID sick pay New York?
COVID sick pay in New York refers to the mandated job-protected and paid leave provided by certain employers to employees under a mandatory or precautionary order of quarantine or isolation due to COVID-19.
In New York State, eligible employees are entitled to a minimum of 5 or 14 days of paid sick leave, depending on the size of their employer, to ensure they receive financial support during their required absence from work.
This measure aims to assist employees needing leave due to COVID-19-related circumstances and ensures they have the necessary financial protection during these challenging times.
Is sick or family leaves under FFCRA taxable in California?
Yes, employers that provide leave through September 30, 2021 can claim federal tax credits under California law.