Last updated on April 11, 2020
This portion of the Families First Coronavirus Response Act (FFCRA) creates a paid leave program for employees where the cost of salaries and benefits is reimbursed by the federal government.
- Who: Companies with fewer than 500 employees; potential exemption for companies with fewer than 50 employees
- What: Paid leave program for employees that is reimbursed by the federal government – which is in addition to any existing paid leave the employer has. It has two parts:
- a two week leave reimbursed at 100% (up to salary of $100k) if the employee is ill, quarantined, or has COVID-19 symptoms and is seeking a diagnosis; and
- a ten week family leave reimbursed at 2/3 of salary (up to $200/day) if employee has to care for a child whose school or childcare is closed because of COVID-19.
- When: Available beginning April 1 and expires on Dec 31, 2020
- Where: This program is dealt with between the employer and the IRS, via a combination of quarterly taxes, annual taxes, and/or checks from the Treasury Department
- How: The employer pays the employee, and then is reimbursed by the federal government for the costs, either by not sending in payroll taxes otherwise owed, or through a refundable tax credit
- Why: If we want to reduce the spread of COVID-19, it’s important that employees be able to stay home without fear of losing their jobs or not being able to pay their rent
Places to Get Official Information
Start Here
- Department of Labor information sheet about FFCRA Paid Leave
- Department of Labor Q&A about the FFCRA Paid Leave
- Department of Labor poster about FFCRA Leave which is required to be distributed to employees
- IRS FAQ on COVID-related tax credits for FFCRA Paid Leave
- IRS Form 7200 for employers to get an advance on the tax credit, and instructions for IRS Form 7200
Extra Credit
- The text of the Families First Coronavirus Recovery Act (FFCRA)
- The Federal Register entry for the FFCRA Paid Leave rules
Places to Get Unofficial Information
- US Chamber of Commerce guide to the Coronavirus Paid Leave Program