Family First Coronavirus Response Act (FFCRA): Small Business Exemption
Filed under:Tax Advisory: U.S. Federal
The Families First Coronavirus Response Act (FFCRA) requires that employers provide paid sick leave or expanded family and medical leave for certain COVID-19 related situations through December 31, 2020.
Generally, the act provides that employees of covered employers are eligible for:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine, or to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
- Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
Small businesses with 50 or fewer employees (including both full-time and part-time) may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
For an employer to qualify for the exemption, an authorized officer must determine that one of the three following conditions are satisfied:
- The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
If the employer qualifies based on the employee count and satisfies one of the above conditions, the small business exemption can be elected. This election is made by the employer documenting how your business meets the criteria explained above.
Further information can be obtained from the Department of Labor website. If you have additional questions or concerns, you should consult with your Jones & Roth tax advisor.