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 alike, 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 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.
Protip: 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.
Employer Tax Credits
Employer Tax Credits were an important component of the FFCRA that provided financial relief to employers who provided paid sick leave and expanded family and medical leave to their employees due to COVID-19. These tax credits were designed to help employers offset the costs of providing paid leave to employees and to encourage them to do so.
To help cover the costs of providing this paid leave, eligible employers were entitled to receive refundable tax credits against their share of Social Security taxes. The tax credit was equal to 100% of the qualified sick leave wages and qualified family leave wages paid by the employer, plus the allocable cost of maintaining health insurance coverage for the employee during the leave period.
Employers need to report the total qualified leave wages and related credits for each quarter on their federal employment tax returns, usually done through Form 941. To receive the credits, employers can withdraw the amount from employment taxes and withheld income taxes that are required to be deposited with the IRS. This allows employers to fund leave wages, including health plan expenses and the employer’s share of Medicare taxes. If needed, employers can also request an advance using Form 7200, Advance Payment of Employer Credits Due to COVID-19.
If you’re self-employed and are eligible for sick or family leaves if working for a regular employer, you may receive an income tax credit to offset your federal self-employment tax for any taxable year. This credit will be equal to your “qualified sick leave equivalent amount” or “qualified family leave equivalent amount.” To claim the credit, you can either withhold an appropriate amount from your estimated tax payments for 2020 or claim it on your Form 1040 when filing in 2021.
Protip: In case your employer closed your workplace before April 1, 2020, rendering you ineligible for sick or family leave benefits, you may still qualify for unemployment benefits.
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 emergency paid sick leave and expanded family and medical leave to their employees. 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 serves as a reminder of the critical role that government can play in supporting its citizens during challenging times.
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, if the staffing agency has over 500 employees, it 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.