Updated: Apr 26, 2020
The Families First Coronavirus Response Act (FFCRA) takes effect today and has some implications for many Clockwise customers. If you are a small business, you may need to start tracking a couple of new types of leave to comply with this new law. Read the details below. If you have any questions or need help with your Clockwise leave setup, call our customer support team. We're ready to help you.
What is the FFCRA?
The FFCRA applies to businesses that employ fewer than 500 people. It provides employers funds to enable employees of these companies with additional paid leave for circumstances related to COVID-19. All sick leave provided under FFCRA will be reimbursed to employers dollar for dollar with a special tax credit.
On March 24, 2020, the U.S Department of Labor (DOL) issued guidance for employers and employees that relate to these two provisions. We will be reviewing those guidelines here to help employers comply with the FFCRA.
What Employers are covered by the FFCRA?
The FFCRA applies to all employers in the U.S having fewer than 500 employees regardless of their geographical location. However, the 500-employee count includes all full-time employees, part-time employees, temporary employees, and day laborers sourced from an agency.
How Much Paid Sick Leave are Employees Entitled To?
FFCRA enables up two weeks paid leave for full-time workers, equaling a maximum of 80 hours. For part-time workers, it provides leave equal to the number of hours an employee would work in a week on average. For example, if a part-time employee works 24 hours in a week, then they will be entitled to 48 hours of paid sick leave
It is important to keep in mind that paid leave provisioned under FFCRA need to be provided in addition to the regular leaves that an employee is entitled to. These leaves can be used to supplement the leaves granted by FFCRA but cannot replace them. So employers must be able to track employee leave by the Covid-19 reason the leave is taken.
What Qualifies Employees to Take Paid Leave under FFCRA?
Employees can take paid leaves under FFCRA if they are affected by Covid-19 directly in the following ways:
1. Subjected to COVID-19 related local, state, or federal isolation or quarantine
2. Advised by a doctor to self-quarantine due to COVID-19 related concerns
3. Experiencing COVID-19 symptoms
Employees can also take paid leave under FFCRA if they are providing care made necessary by Covid-19:
4. Having to take care of an individual who meets criteria 1 or 2 above
5. Taking care of a child whose school or care- provider is closed or unavailable due to COVID-19
FFCRA also covers:
6. Any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
We advise that every Clockwise customer provide leave codes sufficient to track the FFCRA situations 1-3 and 6 separately from situations 4-5 since they incur different leave rates. Both types should be tracked separately from other types of paid leave.
How Do Employers Calculate Leave Pay under the FFCRA?
The leave payment calculation must include all regular payments under the FLSA that are required to calculate overtime. An example of this would be nondiscretionary bonuses. Other payments such as commissions and bonuses that are part of the calculation of the regular payment for overtime must also be considered in calculating leave pay.
An employee’s average regular rate of pay over a six-month period before the date of the leave is to be used as the rate to calculate pay under FFCRA. Another way to make the calculation is adding all compensation received over a six-month period that is part of the regular pay and then dividing it by the number of hours worked during that period. The average from the time the employee started working is to be used if the employee has been at the company for less than six months.
Using the above information, employers can work out how to comply with DOL’s new FMLA Expansion Act and Emergency Paid Sick Leave Act that becomes effective on April 1, 2020. If you want to ensure the health and safety of your employees without burdening your business, then you’d do well to comply with the new Families First Coronavirus Act.
Employees that meet criteria 1 to 3 listed above need to be paid up to $511 per day. The entire paid leave period needs to be capped at $5,110. Employees meeting criteria 4 to 6 must be paid two-third of their regular pay or up to $200 per day. This needs to be capped at $2,000 for the entire duration of the leave.
Where Can I Learn More about FFCRA?
For more information or guidance on the two provisions under FFCRA, you can visit the US Department of Labor's Covid-19 page for employers that contains the fact sheets, questions and answers, and more related to FCRA and the two provisions made under it.
Employees who think they’re being improperly denied benefits can file a complaint with the Department of Labor’s Wage and Hour Division. However, in a guidance memo, the division's administrator writes it won't actually begin enforcement actions until April 17, in order to give businesses time to comply voluntarily.