May 3, 2021
The Families First Coronavirus Relief Act and workers’ compensation
By Peter F. Lindquist, Esq. and and Jessica Stoeckman, Esq.
We’ve been receiving a lot of questions from employers about the Families First Coronavirus Relief Act (FFCRA), federal legislation passed in response to the COVID-19 pandemic. Following are answers to common questions we’ve been hearing from employers.
Please note that these are general guidelines only. Consult your own human resources department and employment law attorney for information specific to your organization.
What is the Families First Coronavirus Relief Act (FFCRA)?
The Families First Coronavirus Relief Act (FFCRA) was passed by Congress in mid-March 2020. It became effective April 2, 2020, as codified by the Department of Labor in 29 C.F.R. § 826 . The FFCRA required employers to pay certain emergency sick leave benefits, and expanded Family and Medical Leave Act (FMLA) leave/benefits, to employees unable to work due to medical, quarantine, or family care issues related to the COVID-19 pandemic.
A limited renewal of the FFCRA was passed in late December 2020 as part of the federal Consolidated Appropriations Act (CAA) of 2021. Under the CAA, effective January 1, 2021 employers can continue to claim tax credits for leave paid to employees caused by COVID-related criteria; however, such payments are no longer mandatory.
The federal American Rescue Plan Act (ARPA) passed in March 2021 extended the expiration date of the FFRCA to September 30, 2021, and made some modifications regarding qualifying criteria and the extent of benefits.
When is the FFCRA in effect?
Between April 2, 2020, and December 31, 2020, employers were mandated and required to make payments of FFCRA benefits to employees who were unable to work due to qualifying COVID-related issues, and were allowed to claim tax credits for FFCRA benefits paid.
Under the CAA, as of January 1, 2021, employers are no longer required to pay FFCRA benefits. Employers can still voluntarily pay these benefits and receive a tax credit for doing so.
Under the ARPA, the current expiration date for the FFCRA is September 30, 2021. Unless additional federal regulations are passed, employers will not be able to claim any tax credits for payment of FFCRA benefits to employees after September 30, 2021.
Which employers were subject to the FFCRA’s requirements?
The FFCRA applies to any employer with fewer than 500 employees, with some exceptions for employers with less than 50 employees. It does not apply to employers with more than 500 employees. Employers can elect to exclude employees who are health care providers or emergency responders from the benefit payment requirements.
When can an employee receive FFCRA paid sick leave benefits?
Between April 2, 2020, and December 31, 2020, employers were required to pay sick leave benefits to employees who were unable to work due to one of the following six COVID-19 related criteria:
- The employee is subject to a federal, state or local quarantine order
- The employee is advised by a health care provider to quarantine due to COVID-19 concerns
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
- The employee is caring for an individual falling under categories 1 or 2
- The employee is caring for a child if the child’s school or place of care has been closed, or is unavailable, due to COVID-19 precautions
- The employee is experiencing any other substantially similar condition specified by the Departments of Health and Human Services, Treasury, and Labor
Between January 1, 2021, and March 31, 2021, employers were not required to pay benefits, but could still choose to voluntarily pay sick leave benefits for the above criteria and receive federal tax credits for doing so.
Effective April 1, 2021, the ARPA added three new qualifying criteria:
- The employee is unable to work while getting a COVID-19 vaccine;
- The employee is unable to work because they are recovering from any illness, injury or condition related to a COVID-19 vaccine;
- The employee is unable to work because they are seeking or waiting for the results of a diagnostic test or awaiting a medical diagnosis.
How much can an employee receive in paid sick leave benefits under the FFCRA?
For categories 1, 2 and 3, an employee can receive 100% of the regular rate of pay for 2 weeks (or 10 days), up to $511 per day and $5,110 total. For categories 4 and 6, an employee can receive two-thirds (67%) of the regular rate of pay for 2 weeks (or 10 days), up to $200 per day and $2,000 total. For category 5, an employee can receive two-thirds (67%) of the regular rate of pay for 12 weeks (2 as paid sick leave, 10 as extended paid FMLA leave), up to $200 per day and $12,000 in total.
Effective April 1, 2021, the ARPA increases the caps for category 5, allowing an employee to receive 14 weeks (2 as paid sick leave, 12 as extended paid FMLA leave), and increased the maximum benefit amount to $14,000 in total.
The ARPA also reset all employees’ rights to FFCRA benefits effective April 1, 2021. Meaning that employees who received FFCRA benefits during the first year of the FFCRA’s existence are now entitled to a renewed bank of benefits (and employers to a renewed tax credit) starting April 1, 2021.
Are employers reimbursed for the sick leave benefits they are required to pay?
Yes, employers paying FFCRA sick leave benefits are entitled to a dollar-for-dollar federal payroll tax credit in the amount of sick leave benefits paid. An employer can elect to pay more than the benefits required by the FFCRA, but can only receive a tax credit for the required amounts.
Can an employee receiving workers’ compensation benefits be eligible for FFCRA benefits?
Sometimes yes, sometimes no. Guidance from the U.S. Department of Labor indicates that an employee is not eligible for paid sick leave benefits if they are already off work and receiving total disability benefits at the time a qualifying criteria under the FFCRA is triggered. But, an injured worker who has returned to work in some capacity and is later unable to work due to a qualifying criteria would be eligible for paid sick leave benefits.
Can workers’ compensation benefits be offset by an employee’s receipt of FFCRA benefits?
The most likely answer in any situation is no. The Department of Labor’s register enacting the FFCRA (29 C.F.R. 826) states that “an employee’s entitlement to, or actual use of, paid sick leave is not grounds for diminishment, reduction, or elimination of any other right or benefit to which the employee is entitled under any other federal, state or local law.” The intent of Congress and the Department of Labor seems to be to provide sick leave benefits per the FFCRA to employees in addition to any other benefits they may be receiving.
As such, in a case where an employee is eligible for wage-loss benefits and is receiving FFCRA paid sick leave during the same time period, no offset to the wage loss can be taken for the FFCRA benefits paid.
What happens when the employee’s diagnosis of COVID-19 and subsequent eligibility for FFCRA benefits is deemed a compensable work-related condition?
Assuming the work-related diagnosis of COVID-19 causes the employee to be unable to work or telecommute, the employee would meet FFCRA eligibility criteria #3 and be eligible for paid sick leave benefits (unless they are a health care provider or emergency responder that the employer elects to exclude). They would also likely be eligible for temporary total disability benefits during the same time period due to the work-related condition. As noted above, it is not possible to offset wage-loss benefits based on the paid sick leave under the FFCRA, and FFCRA payments by employers are mandatory. While it seems like a double-benefit, employees in this situation are likely going to be able to collect the full amount of both FFCRA paid sick leave and temporary total disability benefits.
For more information on the FFCRA, see the U.S. Department of Labor's question and answer page .
This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.