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Updated: June 9, 2023
Please note that a new round of PPP loans and additional small business relief rolled out in early 2021. Updates related to the paid leave under the FFCRA are included in this article, but you can see all the details here.
In April 2020, the Families First Coronavirus Response Act (H.R. 6201) was signed into law to help small businesses and their employees during the COVID-19 outbreak, and it was updated by the Consolidated Appropriations Act, 2021. The Act is designed to provide employees of most small businesses with paid leave, to address their own health needs or to care for family members. And it gives their employers two new, refundable payroll tax credits, which are designed to immediately provide dollar-for-dollar reimbursement for the cost of providing Coronavirus-related leave to their employees.
This legislation enables employers to keep their workers on their payrolls, while also ensuring that workers are not forced to choose between their paychecks and the things they need to do to stay healthy, protect public health, and combat the virus.
We’ve built a resource center with frequently updated information for running your business, taking care of your team, and learning what OnPay’s doing to help.
Here are quick answers to some of the key questions many employers have about the FFCRA and paid leave. Note that the IRS has more detailed information on its Coronavirus page.
The FFCRA went into effect on April 1, 2020 and its provisions have now been extended until September 30, 2021.
Not any more! Employers who qualify for the Act (see the next section) originally needed to notify their employees about rights under the act. With the 2021 changes, that requirement is no longer in place. However, still have the option of receiving tax relief when paid leave is extended to employees.
The Act applies to most small businesses with fewer than 500 employees. See the complete FFCRA guidance for more detailed FAQs.
Under the Act, you may extend the option for paid family leave to any employee, no matter how long they’ve been working for you, as long as they:
To participate, an employer is generally required to provide paid leave in one of two different ways under the FFCRA:
Please note: If an employer chooses to offer paid leave wages that are higher than the Act requires, those additional wages are not reimbursable.
A business is only eligible to claim the full tax credit once per employee — not once per year. If an employee took the maximum paid leave in 2020 and a business claimed a tax credit, there is no additional tax benefit available for offering paid leave in 2021. If the tax credits claimed for a given employee fell short of the maximum in 2020, an employer may offer leave and claim the remaining tax credits before the 2021 deadlines.
Yes, self-employed individuals may claim a refundable tax credit applicable to:
Employers will receive reimbursement for paid leave wages that are required by the Act. Please note that:
Reimbursement will be quick and easy to obtain. The Act creates:
Yes, employees are eligible to take paid leave under the FFCRA on days when their child is not permitted to attend school in person and must instead engage in remote learning, as long as they need the leave to actually care for their child during that time and only if no other suitable person is available to do so. For purposes of the FFCRA and its implementing regulations, the school is effectively “closed” to their child on days that he or she cannot attend in person. They may take paid leave under the FFCRA on each of their child’s remote-learning days.
No, they are not eligible to take paid leave under the FFCRA because their child’s school is not “closed” due to COVID-19 related reasons; it is open for their child to attend. FFCRA leave is not available to take care of a child whose school is open for in-person attendance. If their child is home not because his or her school is closed, but because they have chosen for the child to remain home, they are not entitled to FFCRA paid leave. However, if, because of COVID-19, their child is under a quarantine order or has been advised by a health care provider to self-isolate or self-quarantine, they may be eligible to take paid leave to care for him or her. See FAQ 63.
Yes, they are eligible to take paid leave under the FFCRA while their child’s school remains closed. If their child’s school reopens, the availability of paid leave under the FFCRA will depend on the particulars of the school’s operations.
The full 100-question Department of Labor FAQ is available here.
To learn more about the FFCRA and other related relief for small businesses, visit our Resource Center. You can also find more detailed information about the leave and tax credits under the FFCRA on the Department of Labor’s Pandemic Response site.