Compliance with labor regulations is a challenge even under the most normal circumstances, and it is even more so in the unprecedented times we live in. This spring, the federal government passed an act which will require some employers to provide extended paid leave for employees. The good news is that compliance with a new act could provide tax credits for the 2020 tax year.

The Families First Coronavirus Response Act (FFCRA) which ends on December 31, 2020, is actually an amalgamation of two other acts: the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA). Employers providing paid leave under the auspices of these acts receive tax credits for money spent on leave pay.

Which employers must comply?

In a novel twist, it is not large corporations but private companies with fewer than 500 employees that must comply with FFCRA. There are certain caveats to the act for employers under 50 employees designed to lessen the financial burden of the act on small businesses.

The legal details regarding proper compliance, especially for small businesses who may have some modified requirements, is very fluid, with the Department of Labor continuing to add clarifications to act provisions.

FFCRA Basics

The first part of the act provides 80 hours of emergency paid sick leave to full-time workers for health issues related to COVID-19. To be eligible, the employee must have at least 30 days on the job. An employee can get 2/3 of their pay for up to 80 hours if they must take care of a family member that is sick with the virus or under quarantine. The second part of the act allows employees that need to take care of children because of non-existent childcare options due to the pandemic could qualify for up to 10 weeks of leave at 2/3 of their compensation. In its entirety, the act leaves many decisions up to the employer regarding an employee’s eligibility to qualify for these benefits.

As the year progresses, it is likely that confusion regarding worker eligibility for these benefits will result in compliance questions and the possibility of litigation.