FFMLA Gives Requirements and Benefits to Small Businesses

One of the significant regulations imposed by the federal response to COVID-19 was the Families First Coronavirus Response Act (FFCRA). Running through December 2020, the FFCRA generally requires businesses with less than 500 employees to provide paid leave to employees. Two types of leave are required, Emergency Paid Sick Leave and Emergency Paid Family Leave.

Emergency Paid Sick Leave

As of April 1, 2020, an employer must offer up to 80 hours (two weeks) paid sick leave for employees having a COVID-19 qualifying health reason, such as being ordered to isolate or being quarantined, or being diagnosed.

Employers are also required to post notices to comply with the law.

Emergency FMLA Leave

Employees are permitted to take up to 12 weeks of emergency FMLA leave to care for children related to COVID-19, such as closed schools or their child-care provider is unavailable. To qualify, the employee must not be able to work or telework due to their child/children.

While the first 10 days of leave are generally not paid, employers must pay the employee at least two-thirds their normal pay thereafter, capped at daily and aggregate totals.

Only Applies to Small and Medium Businesses

This new law only applies to businesses with less than 500 employees. The FFCRA specifically chose not to address leave and benefits at large companies.

Exemptions for Small Businesses

Small businesses with less than 50 employees may qualify for a hardship exemption with the Department of Labor. To qualify, the small business must show the employee’s paid leave would:

  • Cause the employer’s expenses to exceed revenue and cause operations to cease at a minimal capacity;
  • Pose a substantial risk to the financial health of the employer due to the absence of the specially skilled or knowledgeable employee; or
  • Cause the employer to not operate at a minimal capacity because the employer could not find available workers to replace the employees requiring leave.

Limitation on Small Business Exemption

Even if an employer qualifies for the small business exception, it must still provide paid sick leave if the employee is subject to a quarantine or isolation order, is experiencing symptoms and seeking a diagnosis, or the employee is caring for another who is quarantined or isolated due to COVID-19, among other reasons.

Nothing Changes the Amount of Rent Owed

The order encourages all tenants who can make monthly payments of rent to do so. Moreover, the executive order states nothing shall relieve a tenant of liability for unpaid rent. Even though it may take longer to evict a nonpaying tenant, the money is still owed to the landlord.

Tax Credits for Leave Wages

The greatest benefit of the FFCRA for businesses are new tax credits. All wages paid to employees for qualifying paid sick leave and emergency FMLA leave are eligible for reimbursement through tax credits through the Department of Treasury, subject to daily and aggregate caps, including health care coverage costs.

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