Who Qualifies for FFCRA Reimbursement?

What is FFCRA coverage?

The Families First Coronavirus Response Act, or FFCRA, was passed on March 18, 2020, in response to the COVID-19 pandemic. It was implemented to provide paid leave to employees affected by COVID-19 related incidents from April 1, 2020 through December 31, 2020.

The FFCRA provides refundable tax credits for employers to help with payroll costs during the pandemic. The federal government reimburses these tax credits, dollar-for-dollar, for the cost of providing up to two weeks of paid sick leave and up to 12 weeks of expanded family and medical leave wages to their employees for leave related to COVID-19. It also provides emergency Family and Medical Leave (FMLA) extension and additional requirements for paid sick leave.

The credit amount provided by the FFCRA is equal to 100% of the amount of sick leave wages paid. It can be claimed on a quarterly basis. The credit is refundable if it exceeds the amount the employer owes in payroll tax.

Who qualifies for FFCRA reimbursement?

The FFCRA is designed to provide assistance to employees. It provides guidelines for tracking paid sick leave related to COVID-19. Conversely, the CARES Act is designed to help employers by providing economic stimulus to businesses.

The Act provides that employees are eligible for:

• Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay if the employee is unable to work due to quarantine and/or symptoms of COVID-19
• Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay if the employee cannot work due to a need to care for an individual who is subject to quarantine or needs to care for a child whose school or care provider is unavailable due to COVID-19
• Up to 10 additional weeks of paid expanded family and medical leave at two-thirds of the employee’s regular rate of pay is an employee is unable to work due to a need for childcare as a result of a school or care provider being unavailable due to COVID-19

Under the FFCRA, “paid sick leave” refers to paid leave under the Emergency Paid Sick Leave Act. “Expanded family and medical leave” refers to paid leave under the Emergency Family and Medical Leave Expansion Act.

Private sector or nonprofit employees (500 or fewer)

Businesses and tax-exempt organizations which have fewer than 500 employees must provide paid sick leave or expanded family and medical leave under the FFCRA. Private sector employers with more than 500 employees are not obligated to comply with the Act.

If you are taking paid sick leave, the amount for which you may qualify per hour is contingent upon:

• Regular rate of pay
• The federal minimum wage in effect under the FLSA
• The applicable state or local minimum wage

If you are affected by the COVID-19 pandemic, you may be eligible for up to 80 hours of emergency paid leave at either your regular rate of pay or the applicable minimum wage, whichever is higher, up to  $511 per day or $5,110 over the duration of the entire paid sick leave period.

Public sector

A public sector employee is a person that works for the government of the U.S., a state, the District of Columbia, a territory of the U.S., a city, a municipality, a township, a county, a parish, or a similar government. Health care providers and emergency responders may be excluded by employers from paid sick leave and/or expanded family and medical leave. Most employees of the federal government are covered by Title II of the FMLA and are therefore not covered by the expanded family and medical leave provisions of the FFCRA.

Employers

Employers who operate businesses that employ fewer than 500 people must provide paid sick leave or expanded family and medical leave under the FFCRA. This includes full and part-time, temporary, and jointly employed employees, as well as day laborers supplied by temp agencies.

For employers who pay family leave wages under the FFCRA, a separate payroll tax provision provides for a 100% credit against the employer’s share of the payroll tax per employee. Employers can receive both credits under the FFCRA and the CARES Act, but not on the same wages. Employers with fewer than 50 employees can apply for an exemptions from the expanded family leave provisions. This option is available is leave would “jeopardize the viability of the business.”

If an employer receives a PPP loan through the CARES Act, they are still eligible for the FFCRA. However, wages tax credits received for qualified wages are not eligible as payroll costs for the purposes of receiving loan forgiveness. Employers claim credit by reporting their total qualified leave wages for each quarter on their federal employment tax return Form 941.