The FFCRA: To Comply, or Not to Comply?

© MR / Adobe Stock

The Families First Coronavirus Response Act (FFCRA) was passed on March 18, 2020 providing much needed relief to both employees and employers. This act was mandatory for all employers with under 500 employees and was due to expire on December 31, 2020; however, with the new year this act became voluntary and was extended through March 31, 2021. Now the big question facing employers is “to comply, or not to comply?”.

Before the FFCRA, the U.S. Centers for Disease Control and Prevention (CDC) committee reported the first COVID-19 case on American soil on January 20, 2020. This caused employees throughout the country to be stricken with fear as they worried about their health, the health of their family members, and the security of their jobs. On the employer end, the show must go on of course, but it is of the utmost importance to keep employees safe. How do we do we accomplish both?

With the enactment of the Families First Coronavirus Response Act (FFCRA), employers could finally encourage employees to stay home, pay them to take the necessary time to recover, and claim these funds back when they file taxes. We’ve all seen the FFCRA poster by now, but it generally provides payment for employees going through the following situations:

·        100% pay (up to $551 daily and $5,110 total) for being subjected to quarantine by way of an isolation order, for quarantine recommendation from a healthcare provider, or for experiencing any of the COVID-19 symptoms.

·        2/3rds pay (up to $200 daily and $2,000 total) for caring for an individual in quarantine, for caring for a child whose school or place of care has closed, or for other similar conditions defined by the US Department of Health and Human Services.

As we are in the new year, employers must decide if they would like to comply with this new FFCRA expansion, which is now a voluntary provision. The way we see it, there are three options, and we will break down the pros and cons of each below.

Option 1: What Complying Looks Like:

If employers decide to comply with the FFCRA in 2021, the most obvious pro is they will be receiving a tax credit at the end of the year for any funds given to employees under the FFCRA provisions mentioned above. Another huge pro includes generally keeping COVID-19 out of the office as employees are being encouraged to call off without the fear of missing a paycheck or other repercussions. This will lead to less cases of whole teams contracting COVID-19 at the same time due to events at the workplace, and therefore employees can be productive.  

Another thing for employers to keep in mind is if they decide to comply with the extended FFCRA, is that each employee will have the same bank of hours to use (or maximum contribution amount) carried over from 2020. For example, if an employee was having COVID-19-related symptoms and was paid 100% for quarantining and seeking treatment, if they received a negative test and returned to work, they may have only used 16 hours of their 80-hour bank. Similarly, if an employee has used all 80 hours of FFCRA last year, employers will not have the option to use this benefit again as their hours have been depleted.

Some of the cons associated with voluntary compliance include the time to complete any required paperwork and how paying the employees up-front could affect the year’s working budget as reimbursement will not come until the end of the year. With the paperwork, there is one form employers must use to document when employees are out on FFCRA, and it is a one-pager! Other paperwork, such as what is required by the Occupational Health and Safety Administration (OSHA), may be required if there are work-related COVID-19 cases.

Option 2: What Not Complying Looks Like:

If employers decide to not comply with the FFCRA, there are no penalties in 2021. This would mean that if an employee gets symptoms of or tests positive for COVID-19, they can use either paid time off, sick time, any other paid benefits for employees, or simply take unpaid time off to recover. One pro to non-compliance is the employer is able to save the compensation required up front and not wait until the end of the year to be reimbursed. Note, this does not address whether or not employees may take time off to care for a family member in recovery or the loss of daycare/schooling resources.

One con to non-compliance is employees may be less inclined to call off or report symptoms as they may fear they will miss out on working hours, and therefore pay. This could lead to employees coming to work despite being sick which may cause an outbreak at the workplace and amongst teammates, slowing or halting productivity altogether. We have seen whole crews and admin teams call off at the same time due to one super-spreader event at work where someone did not reveal they had symptoms. Should this happen, employers then need to complete the necessary OSHA paperwork recording the incident and the severity of the situation.

Option 3: What Building Your Own Plan Looks Like: 

If you decide to do something in the middle, you have a lot more flexibility. You can decide to include provisions helping the employee if they become ill themselves, or you can extend that definition into family members. Additionally, you can define the amount of funds you are willing to give toward your pre-selected, COVID-related topics. For example, you could decide to pay employees up to 40 hours for their own quarantine or to monitor any symptoms, and an additional 40 hours should their immediate family members need care.

The benefit of this is employees will have less of a reason to hide symptoms and report for work anyway for the paycheck, or neglect caring for their household, which could lead to burnout. The con of this plan is by creating your own guidelines you will not qualify for the tax reimbursement at the end of the year, which will be 100% out of pocket.

How Will You Prepare Your Workplace for COVID-19 in 2021?

With so many options, the key is to find the strategy that is best for your organization’s culture. It is important to keep in mind that no matter your decision, employers are still responsible for taking appropriate measures to keep employees at the workplace as safe and healthy as humanly possible.

Need some tools and policies to get started? Skywalk Group can help you navigate your unique business circumstances and put together a strategic plan! No need to reinvent the wheel and draft policies when we have the templates ready to go! Contact us today so we can get started. 

By Samantha Rogers