FFCRA (Families First Coronavirus Response Act) has enacted a law that requires employers to provide emergency paid sick leaves to their employees starting from April 01, 2020, due to COVID-19 impact.
This law is applicable for businesses with fewer than 500 employees. New hires can also use this policy, as there is no waiting period.
How does this act work?
Generally, this act requires employers to provide two weeks (80 hours) of paid sick leave at the employee's regular pay rate if the employee is quarantined and/or showing COVID symptoms. The employee must be given 12 weeks of leave at 2/3rds of their pay rate if they are taking care of a child who is under 18 years of age or a family member.
Who are qualified for emergency leaves?
Under the FFCRA, an employee is eligible for a paid sick leave if the employee is:
- subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- advised by a health care provider to self-quarantine;
- experiencing COVID-19 symptoms and seeking diagnosis;
- caring for a child whose school or place of care is closed due to the pandemic;
- experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services;
How is the pay calculated?
If the employee is put under federal/state quarantine or under-diagnosis or in self-quarantine as advised by the health care provider, the employee has to be paid their regular rate or minimum wage rate, whichever is higher. That is $511 per day and $5110 for two weeks.
In case the employee is taking care of a family member, they have to be paid 2/3rd of their regular pay or 2/3rd of minimum wage rate, whichever is higher. That is $200 per day.
Will employers have tax credits?
Yes, employers will receive a tax credit to cover up the wages paid to the employees, which will be applied to the employer's Social Security taxes.
If the employee is in paid leave isolating themselves, the maximum credit is $511 per day and $200/day if the employee is taking care of a family member.
In case the employer opts to pay higher wages for sick leaves than the said limit, those amounts will not be accounted for tax credits.
How to add time off for employees?
Employees will be able to request time off according to this policy through myPayWow. Also, employers while running payroll can add time off manually in step 2 on their employees’ behalf. Please note that to add time off, time off policy must have been created and employees must have been enrolled in the policy.