These are unprecedented times.
From a global virus to social distancing to limited travel to unfolding economic conditions, we’ve never experienced anything like this in our lifetimes.
As a small business owner, you have a lot to process. Not only are you nervous about the viability of your company, you’re also concerned about monitoring mandated health guidelines and the emotional impact this is having on both you and your employees.
Due to the extraordinary events unfolding during the COVID-19 pandemic, the U.S. government has taken steps to help citizens and business owners alike manage the impact. And while these new measures add more responsibilities to your plate, you need to be aware of and prepared for the implementation of the laws.
On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA), which went into effect on April 1, 2020, and will remain in effect until December 31, 2020.
Prior to the COVID-19 outbreak, U.S. federal law did not require private employers to provide paid leave for employees. The key words being “paid leave.”
Under the pre-existing Family and Medical Leave Act (FMLA), only employers with 50 or more employees within 75 miles of the company’s work site were required to provide unpaid leave to their employees based on specific guidelines.
That has now changed.
The FFCRA requires all private employers with fewer than 500 employees, and most public employers, to provide paid leave to all eligible employees. Under the new law, you are required to provide 80 hours of paid leave for eligible full-time employees who are:
The FFCRA also allows up to an additional 10 weeks of expanded family and medical leave to employees who are unable to work in order to care for a child whose school or place of care closed during the national emergency. To be eligible for this provision, an employee must be employed by your company for at least 30 calendar days (rather than the typical 12-month employment period/1,250 hours required for FMLA coverage).
Under the new FFCRA guidelines, all eligible employees are entitled to the following:
The Department of Labor (DOL) will observe a temporary period of non-enforcement for the first 30 days after the FFCRA takes effect, as long as you act reasonably and in good faith to comply with its provisions. Businesses failing to comply after the grace period will be subject to enforcement provisions of the FMLA and/or the Fair Labor Standards Act.
If your business has fewer than 50 employees, you may be exempt from providing emergency paid leave.
According to the DOL, exemption is admissible “when the imposition of such requirements would jeopardize the viability of the business as an ongoing concern.” In order to qualify, you must demonstrate at least one of the following:
The FFCRA provides businesses with tax credits to cover certain costs of providing employees with required paid sick leave and expanded family and medical leave for reasons related to COVID-19, from April 1, 2020, through December 31, 2020.
Qualifying wages are those paid to an employee who takes leave under FFCRA for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. For clarity on the tax credits, it’s wise to consult your tax attorney or visit the U.S. Department of the Treasury website for more information.