Your farm and the Families First Act
Do you know how the Families First Coronavirus Response Act will affect your farm and your employees?
In light of the novel coronavirus, the virus that causes the infectious disease, COVID-19, the Families First Coronavirus Response Act (FFCRA) has brought family and medical leave, as well as paid sick leave, to employers across the country, including agriculture. Although you may have heard a little about this Act, one thing you may not know is that it has already taken effect as of April 1, 2020.
Who does this apply to?
Any employer with fewer than 500 employees at the time leave requested. This 500 number includes all employees, including H-2A/H-2B, and there are no exceptions for seasonal employers or employees (they must be included). A farm would not include, in the qualifying count, a farm labor contractor’s employee doing work on their farm.
Leave for FFCRA falls under either paid sick leave or paid expanded family and medical leave. Paid sick leave requirements are very specific and apply only to an employee that is unable to work due to:
- A government mandated quarantine or isolation (not the same as a state/local stay at home order).
- A doctor’s order to self-quarantine.
- A person experiencing novel coronavirus symptoms that is also seeking a diagnosis.
Sick leave can be up to 2 weeks or up to 80 hours, at their regular rate of pay (up to $511/day or $5,110 maximum per worker). Under the paid sick leave provision, an employee can also take 2 weeks (up to 80 hours) to care for a quarantined individual (not limited to family members), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to the novel coronavirus. Pay is at 2/3 of their regular pay rate with a maximum of $200/day or $2,000 over the 2-week period.
Expanded family and medical leave is for a parent taking care of their child whose school or daycare is closed (up to 10 additional weeks on top of the 2 weeks). For this leave, there is an additional requirement for the employee to have worked at least 30 days of the last 60 days that they were on the payroll for the farm. Pay is at the 2/3 rate as for caring for the quarantined individual. Regular rate of pay is defined as the employee’s average pay over the last six months, and does not include bonuses.
Exemptions may be available for employers with fewer than 50 employees but only for the closed-school long-term leave requirements, and “if the leave requirements would jeopardize the viability of the business as a going concern” (see U.S. Department of Labor’s FFCRA website).
Employers with fewer than 50 employees will be exempt from having to follow the Closed School long-term Family Leave Requirement IF:
- Providing the leave will cause the employers expenses to exceed revenues and the business to close.
- The loss of workers will create a “substantial risk to the financial health or operational capabilities” of the business.
- The worker is needed for the business to maintain minimal capacity operations because there are not enough workers that are “able, willing, or qualified” to cover the worker requesting leave.
Employers with fewer than 50 employees still need to comply with all other parts of the law/legislation.
FFCRA covers leave taken between 4/1/2020 – 12/31/2020.
Employers must also post the Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA) (PDF), poster found on the U.S. Department of Labor’s Workplace Posters webpage.
How is the employer reimbursed?
The reimbursement will work similar to an advance on a refundable tax credit.
- Employers will keep dollar for dollar the amount normally paid as the the employer share of Federal Insurance Contributions Act (FICA) that is normally withheld for employee’s payroll pool.
- If the employer share of FICA does not cover the total cost of the paid leave, the employer can file a form IRS 7200 and return it to the IRS. Payments are expected to be paid to the employers with a 1-2 week turn around.
- If the employer chooses to take an advance on the refundable tax credits, or utilize the tax credit when filing 2020 taxes then this may negatively affect the employer’s eligibility for the Paycheck Protection Program.