Overview of Families First Coronavirus Response Act (FFCRA)
The Families First Coronavirus Response Act (FFCRA) applies to private employers with fewer than 500 employees and government employers with more than one employee. All employees count when determining the number of employees, including those on leave. Independent contractors do not count.
Employer Obligations and Penalties
Employers in violation of the first two weeks’ paid sick time or unlawful termination provisions of the FFCRA will be subject to penalties under the Fair Labor Standards Act. Employers in violation of the provisions providing up to an additional 10 weeks of paid leave will face enforcement under the Family and Medical Leave Act.
Providing COVID-19 Related Leave
If employers meet the criteria, they must provide paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. The amount and duration of leave depend on the reason. Protections apply, and employers may not fire or discipline employees for taking qualifying leave, or they face penalties and enforcement. Small businesses with fewer than 50 employees may be exempt from certain provisions.
Tax Credits and Support
Tax credits are available to compensate employers for providing COVID-19 related leave. The FFCRA leave programs helped support workers through the pandemic in 2020.
IRS Sick and Family Leave Credits
The IRS offers a credit covering 100% of qualified sick leave wages and up to 10 weeks of qualified family leave wages paid between April 1, 2020, and March 31, 2021. The credit is not penalized for reducing tax deposits in anticipation of tax credits.
Eligibility and Details
Self-employed individuals meeting specific criteria are eligible for the tax credit. The credit is limited to paid leave used for purposes defined by the Federal Family and Medical Leave Act (FMLA).
American Rescue Plan Act of 2021
The American Rescue Plan Act of 2021 provides paid sick and family leave tax credits for eligible employers with fewer than 500 employees, giving funds for COVID-19 related leave. An FMLA-eligible employee can take up to 12 weeks of unpaid, job-protected leave for specified family and medical reasons.