How to Pay Employees for FFCRA Emergency Sick & Family Leave (COVID-19)
While the Families First Coronavirus Response Act (FFCRA) no longer requires employers to provide paid leave, eligible businesses can still get a refundable tax credit. This credit is equal to the amount of qualified leave wages, plus allocable qualified health plan expenses, for leave taken through September 30, 2021.
Is My Business Required to Offer FFCRA Paid Leave?
No. The mandatory requirements ended on December 31, 2020. Providing this leave is now optional. See our overview of paid leave and tax credits through the FFCRA for more information.
How FFCRA Pay Types Are Defined in Beyond
Beyond includes three specific pay types for FFCRA-related emergency sick or family leave.
For Sick and Care Leave (Up to 2 Weeks Paid)
Note: An employee can use a total of 80 hours of FFCRA Sick, FFCRA Care, or a combination of both. Once these hours are used, an employee can then take up to 10 weeks of FFCRA Extended leave.
- FFCRA Sick Use this pay type for an employee who is unable to work because they are:
- In quarantine due to a federal, state, or local government order or a doctor’s advice.
- Exposed to COVID-19.
- Seeking or awaiting the results of a COVID-19 test after exposure or at the employer’s request.
- Experiencing COVID-19 symptoms and seeking or awaiting testing or a diagnosis.
- Obtaining a COVID-19 vaccine.
- Recovering from any injury, disability, illness, or condition related to such a vaccine.
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Limits: The employee should be paid their regular rate, up to a daily limit of $511 and an aggregate limit of $5,110. Any amount over the daily limit will not be eligible for a payroll tax credit.
- FFCRA Care Use this pay type for an employee who is unable to work because they must care for:
- A family member who is in quarantine or has been advised to self-quarantine due to a federal, state, or local government order or a doctor’s advice.
- A child (under 18) whose school or care facility is closed or unavailable due to COVID-19, and/or the employee is experiencing similar circumstances.
- A family member or child who is obtaining a COVID-19 vaccine or recovering from a related injury, disability, or illness.
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Limits: The employee should be paid two-thirds of their regular rate, up to a daily limit of $200 and an aggregate limit of $2,000. Any amount over the daily limit will not be eligible for a payroll tax credit.
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For Extended Family and Medical Leave (Up to 10 Weeks Paid)
- FFCRA Extended Use this pay type for an employee who has been with the company for at least 30 calendar days and is unable to work because they need to care for a child (under 18) whose school or care facility is closed or unavailable due to COVID-19.
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Limits: The employee can be paid for up to 10 weeks at two-thirds of their regular rate of pay, with a daily limit of $200 and an aggregate limit of $10,000.
Getting Started with Pay Types
FFCRA pay types can be added to employees while you run a regular payroll by using the “Enter Hours” function.
- Click Payroll in the left menu.
- Select the appropriate employees and review the pay run details at the top, just as you would for a standard payroll.
- Click Enter Hours.
How to Add FFCRA Pay to Employees
For each employee who needs FFCRA pay, click the “…” button to expand the window and view additional Pay Items.
- Click the “Select Pay Type” menu, type “FFCRA” to quickly find these pay types, and then select the appropriate one.
- Click + Add Item.
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Tip: If you’re unsure whether the employee qualifies for FFCRA Sick, FFCRA Care, or FFCRA Extended, you can review the definitions above.
To add the hours for the new pay item, click the blue pencil icon next to it.
Is the Employee Eligible? The first time you edit FFCRA hours, you will see a window with information explaining the eligibility requirements and daily/weekly limits. Click OK to continue. Once you click OK, this message will not appear again, but you can always refer to the help text by clicking the information prompt next to the FFCRA pay item.
Enter the leave hours for each day that qualifies for FFCRA pay. Your progress is automatically saved. When you are finished, click Close. You will then see the total FFCRA hours assigned to the employee.
Note: You can only enter hours dated April 1, 2020, or later. The FFCRA was made effective on April 1, 2020, and its provisions were extended to September 30, 2021, by the American Rescue Plan of 2021.
Compliance with Daily and Aggregate Limits The FFCRA has daily and aggregate limits on how much of this leave is eligible for tax credits. These limits have been reset for qualifying leave taken between April 1, 2021, and September 30, 2021. Beyond will keep track of this for you. If the entered value exceeds the limit, we will automatically reduce the hours to the maximum value allowed.
Reviewing and Approving Payroll
Once you have added all FFCRA pay types and amounts, you are ready to review and approve payroll as you normally would. Click Review Payroll. Any FFCRA pay types will be shown as a separate line item in the wages summary for each employee, with a total at the bottom.
Approving Payroll
When you approve a payroll that includes FFCRA pay types and hours, you will see a breakdown of all FFCRA pay types in the pay run, which also summarizes the value of the eligible tax credit. Make sure everything looks correct.
How Tax Credits for FFCRA Payments Are Processed
Beyond will automatically reduce your 941/943 tax liability by the eligible amount paid in FFCRA leave wages, as well as an apportioned amount of employer Medicare and the cost of the employer’s share of benefits (if this is logged in Beyond).
If there is any remaining credit value, you have two options: you can redeem that amount via a refund directly from the IRS, or Beyond will continue to reduce the tax payment of your future pay runs until the total credit is used.
Need Help?
If you still have any questions, please don’t hesitate to reach out. Our team will be happy to provide answers and assist you in any way we can.