Under the Families First Coronavirus Response Act (FFCRA), covered employers were required to provide partially paid emergency sick leave and emergency family and medical leave to eligible employees for qualifying purposes related to COVID-19. The FFCRA also provided tax credits to recoup employers for the cost of providing this benefit.
The FFCRA’s leave mandates expired December 31, 2020. However, the December 2020 COVID stimulus law allows employers who continue providing paid leave that had been required under the FFCRA to continue claiming the FFCRA tax credits through March 31, 2021, subject to the same caps and restrictions. As before, tax credits are only available for leave provided to eligible employees for qualifying reasons under the FFCRA.
Watch the following video or follow along with the instructions below to learn how to schedule leave for FFCRA (COVID-19) in Justworks.
Admins with the “Manage Employees” permission will be able to put employees on leave for reasons related to COVID-19 under the Families First Coronavirus Response Act (FFCRA) and claim related tax credits by heading to an employee's profile and selecting "Schedule FFCRA Leave."
The following employee types are eligible for leave:
- Employee - Full time
- Employee - Part time
- Employee - Paid intern
- Owner / Partner (paid)
From your dashboard, navigate to Manage > Employees and select the employee’s profile. On the profile page, select “Schedule FFCRA Leave” on the top left menu.
First, you’ll need to select the emergency leave the employee has requested and the qualifying reason for leave. Then set a start and end date for when their leave will take place.
Employees may be eligible for two types of leave:
EMERGENCY FAMILY AND MEDICAL LEAVE (EFML)
The Emergency Family and Medical Leave applies to employees who have been at the company for at least 30 days, and are unable to work (including telework) due to their child's school or place of care closing for reasons related to COVID-19. When you select this option, all other leave reasons will be greyed out.
Under the FFCRA, the first 2 weeks of emergency family and medical leave are unpaid. However, the employee may use Emergency Paid Sick Leave or other sick leave or PTO to cover this portion. The Justworks FFCRA leave tool does not track the unpaid portion of EFML, so you should not record those 2 weeks in this flow.
Under the FFCRA, weeks 3 through 12 are paid at two-thirds the employee’s regular pay (or applicable minimum wage, whichever is higher), capped at $200 per day and $10,000 in aggregate, per employee.
EMERGENCY PAID SICK LEAVE (EPSL)
Under the FFCRA, eligible employees qualified for up to 80 hours of emergency paid sick leave (or the number of hours usually worked in a two-week period for part-time employees) for qualifying reasons listed here. You should only use this flow to record paid leave for one of the qualifying reasons under the FFCRA. Leave provided for other reasons is not eligible for FFCRA tax credits and therefore should not be scheduled using this tool.
The reason you select can impact how much the employee will receive in leave pay, so it’s important to answer accurately. Generally, leave taken for reasons related to one’s own care is capped at $511 per day. Leave taken for other qualifying reasons is paid out at two-thirds the employee’s regular pay (or applicable minimum wage, whichever is higher), up to a cap of $200 per day.
NOTES ON SCHEDULING FFCRA LEAVE
By scheduling FFCRA leave using Justworks, you will be directing Justworks to claim tax credits and/or refunds on behalf of your company. Customers should only use the tool for qualifying reasons under the FFCRA as this is how Justworks will also claim tax credit that may offset or reduce applicable payroll taxes for your company in accordance with FFCRA.
Additionally, the IRS has released specific guidelines regarding the documentation necessary to substantiate your claim of tax credits under the FFCRA. In order to submit leave using the Justworks FFCRA tool, you will need to certify that you have collected all required documentation and that leave is qualifying, among other things.
Finally, for any employee taking FFCRA leave with a regular rate of pay that is less than the applicable minimum wage, you must ensure that the employee is paid at least that applicable minimum wage during the days they are utilizing leave under FFCRA. Not sure what minimum wage is based on your employee’s work location? Check out this chart on ThinkHR.*
REASON FOR LEAVE
As outlined by the Department of Labor, there are six qualifying reasons for FFCRA leave and each leave-type has subsequent pay-out methods.
Leave is FFCRA qualified when the employee is unable to work (remotely or otherwise) and:
- is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- Per DOL guidance, employees whose businesses or worksites are closed, or whose employers do not otherwise have work available to them during this time, would not be eligible for leave under this qualifying reason.
- Shelter-in-place or stay-at-home orders are included under the definition of local quarantine or isolation orders, but those orders must be what's preventing an employee from working in order to be eligible for leave under this qualifying reason.
- Congress has passed separate stimulus measures in the CARES Act that may help your company address economic hardship for businesses in light of the COVID-19 pandemic.
See below for a visual guide of qualified Emergency Paid Sick Leave and Emergency Family and Medical Leave under the FFCRA, as well as how each type of leave works.
START & END DATE
Next, choose a start and end date.
You can schedule an employee for non-consecutive leave using Justworks. For example, you can schedule leave from February 1 through February 5 and again from February 10 through February 13. In order to add non-consecutive leave, go through this flow again for each time period.
You will be blocked from scheduling more paid leave time than is allowed under the FFCRA (roughly two weeks for EPSL, ten weeks for EFML).
EMPLOYER CONTRIBUTION TO LEAVE PAY (optional)
In Justworks, employers have the option to pay only the amount that tax creditable under the FFCRA, or they can choose to “top up” that amount, if the employee’s regular pay is more than the applicable FFCRA cap.
Note, however, that an employer cannot claim FFCRA tax credits for any pay that they choose to pay is above the applicable cap.
Work schedule & wages
Now we’ll ask for the employee’s typical work schedule.
Select which days of the week this employee typically works.
Note that the amount of days selected here will directly impact the calculation of leave pay, so it’s important to enter this schedule correctly.
AVERAGE NUMBER OF HOURS WORKED IN A DAY
What are the average hours this employee works every week? Please include any typical overtime as well. We need this information to accurately calculate the leave pay based on an employee’s normal schedule (i.e. their work schedule not affected by COVID) as well as prorate regular payroll correctly when the leave spans mid-pay period.
AVERAGE ADDITIONAL WAGES PER WEEK
Does this employee typically receive commissions or other wages that are part of their regular pay? If so, include that here. We need this information to accurately calculate the leave pay based on an employee’s typical schedule (i.e. their work schedule not affected by COVID) as well as prorate regular payroll correctly when the leave spans mid-pay period.
Once you’ve input all the information, confirm that you agree to the Federal Families First Coronavirus Response Act Paid Sick Leave Request Certification. By doing so, you will certify that the leave you are submitting qualifies for tax credits under the FFRC, among other things.
Now you can select ‘Schedule leave.’ You’ll see a success banner at the top confirming that the employee’s leave is scheduled in Justworks.
You'll also see the leave amounts and applicable on your company's estimated invoice:
Can an employee take both EFML and EPSL at the same time?
Yes and no. Under the FFCRA, the first two weeks of EFML leave are unpaid, but may be taken at the same time as EPSL or other available PTO to ensure there is no gap in salary continuation. However, the Justworks FFCRA leave tool is not designed to track the two weeks of EFML that are unpaid. It can only be used to manage the ten weeks of EFML that are paid. Accordingly, an employee cannot be scheduled for both EFML and EPSL at the same time within the Justworks tool, even though practically speaking this is what is being done outside the platform.
Am I required to receive any supporting documentation (e.g., a doctor’s note) before putting someone on leave?
The IRS has provided specific guidelines regarding the documentation you should collect and retain to substantiate your claim of eligibility for tax credits for qualifying leave payments under the FFCRA. In order to submit leave using Justworks’ FFCRA leave tool, you will need to certify that you have collected this documentation.
You can reach out to Justworks support to obtain a template leave request form to assist in collecting the documentation required by the IRS.
Can an employer grant EFML or EPSL for purposes other than those listed in the law?
No. The tax credits under the FFCRA only apply to leave for qualifying reasons under the law. You should only use Justworks’ FFCRA leave tool to schedule leave for eligible employees for qualifying reasons under the FFCRA. Additionally, it may be a violation of federal law to count non-qualifying leave against an employee’s annual bank of family and medical leave.
Where can I find more information about the FFCRA’s coverage, such as which employers are covered, which employees are eligible, and the qualifying reasons for using FFCRA leave?
Once I’ve recorded leave using the FFCRA leave tool, do I need to adjust employee timecards or PTO balances in order for the employee to be paid?
Once leave is recorded, it will be paid on the employee’s regular pay schedule according to the information you have included for that employee. Timecards for the same pay period should only include hours that were actually worked by the employee. PTO should not be scheduled or added to employee timecards for time they are on FFCRA leave scheduled with the FFCRA leave tool. Adding PTO to timecards may result in double compensation. If an employee is using banked PTO to “top up” their pay under FFCRA, use the top up feature in the FFCRA leave tool, and then manually deduct that time from the PTO balance in Justworks.
*Be sure you’re logged into your Justworks account with administrative permissions to access ThinkHR.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.