The Consolidated Appropriations Act brought a lot of opportunities for employers such as changes to the Employee Retention Tax Credit (ERTC) and expansions to the Paycheck Protection Program Loans (PPP loans). Even though it’s been discussed less, extensions for FFCRA leave and the accompanying tax credit will also be exceptionally helpful (even in improving business cashflow). MP’s HR consulting team shares the most essential information on this part of the Consolidated Appropriations Act.
A Refresher on FFCRA Leave
The Families First Coronavirus Response Act (FFCRA) applies to US employers with 500 or fewer employees. All employees can take FFCRA leave for these six reasons below:
- They’re subject to a Federal, State, or local quarantine or isolation order related to COVID. In this case, they will get 100% of their pay for up to two weeks or 80 hours. This benefit will be capped at $511 daily and $5,110 total.
- They have been advised by a healthcare provider to self-quarantine because of potential exposure or diagnosis of COVID-19. In this case, they will get 100% of their pay for up to two weeks or 80 hours. This benefit will be capped at $511 daily and $5,110 total.
- They have been experiencing symptoms similar to those of COVID-19 and are seeking a medical diagnosis. In this case, they will get 100% of their pay for up to two weeks or 80 hours. This benefit will be capped at $511 daily and $5,110 total.
- They are caring for an individual who is subject to an order as described in number 1, or a self-quarantine as described in number 2. In this case, they will get 100% of their pay for up to two weeks or 80 hours. This benefit will be capped at $200 daily and $2,000 total.
- They are caring for a child whose school or childcare provider are closed/unavailable for reasons related to COVID-19. In this case, the employee would qualify for up to 12 weeks of paid sick leave and expanded Family Medical Leave (FMLA) paid at two-thirds of their salary. This benefit will be capped at $200 daily and $12,000 total.
- They are experiencing any other substantially similar condition specified by the Secretary of Health and Human Services. In this case, the employee would qualify for up to 2 weeks of paid sick leave (80 hours) and expanded Family Medical Leave (FMLA) paid at two-thirds of their salary. This benefit will be capped at $200 daily and $2,000 total.
Note that a part-time employee is eligible for leave for the number of hours they’d normally be scheduled to work over the period when they are absent. Additionally, workers can file a complaint with the Wage and Hour Division if they were not paid by their employer for FFCRA leave that was taken or requested starting April 1st, 2020 until December 31, 2020.
How FFCRA Leave Has Been Extended
The Consolidated Appropriations Act extended the option for employers to grant FFCRA leave to their workers. Although they are now no longer required to grant an employee’s request for FFCRA leave, they can choose to do so until March 31st, 2021. This also means that when they grant FFCRA leave to workers, employers can take the accompanying tax credit for doing it. This extension does not allow workers to take any more time if they’ve maxed out their 80 hours of paid COVID sick time or 12 weeks of expanded FMLA leave.
Benefits of the FFRCA Extension to Employers
The FFCRA extension benefits employers in several ways:
- Employers are not required to continue granting FFCRA leave. This may be helpful for businesses that cannot stand to lose workers right now. However, it does give them the option to do so if they can support their employees in this way. (MP’s HR Services reminds employers to grant or deny FFCRA leave in a nondiscriminatory way throughout their organization. They must provide equal opportunity to take it, should they decided to continue to grant it through the end of March.)
- Employers will also continue to get financial support if their employees must take extended time off because of COVID. If they grant FFCRA leave to workers, they’re eligible for a dollar-for-dollar tax credit to cover wages paid to an employee on FFCRA leave. They can receive this financial support in a few ways. One way is to reduce their federal employment tax deposits. Another is to get an advanced payment of the credit. Employers can submit a Form 7200, Advance Payment of Employer Credits Due to COVID-19 to request this advance.
- Employers can maintain a healthier, safer workplace without losing out heavily financially. Workers who are truly sick will stay home and avoid infecting others– all while being paid wages that are reimbursed through the FFCRA tax credit.
- Employers can build employee engagement by allowing their workers to take time they need to care for sick family members or children whose school or childcare is closed. This can be done with a low financial burden, as wages will be reimbursed by the government in a tax credit. Because an engaged workforce is such a powerful asset, employers will reap their investment back in productivity, employee retention, and a better bottom line.
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Are you up to date on 2021 compliance? Watch to the webinar.
- COVID Vaccine Mandates: A Roadmap for Employers
- 6 Best Practices for Encouraging COVID Vaccination and Maintaining HR Compliance: Part 2
- Reducing Risk for COVID Lawsuits: The Essential Checklist
- COVID Vaccine Mandates: 6 Considerations When Employees Can’t or Won’t Get Vaccinated
- 6 Best Practices for Encouraging COVID Vaccination and Maintaining HR Legal Compliance: Part 1
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