Your farm or ranch may need to supply sick and family leave to your employees because of COVID-19.
Back in March, the Families First CoronaVirus Response Act (also called simply Families First) was passed in response to the pandemic and it went into effect on April 1. The good news is, there are ways for the federal government to reimburse you for these costs! Check out the info below to see if you need to start implementing this on your farm.
What businesses need to provide this?
Part of this law requires that all businesses with fewer than 500 employees provide sick and family leave to their employees if they have to miss work due to COVID-19 quarantine, illness, or family responsibilities. There are very few exemptions from this requirement, so if this sounds like your farm or ranch, chances are you will indeed need to provide this paid leave.
What do they mean by employees?
This is anyone who is on your payroll as an employee. This provision of Families First covers full-time, part-time, seasonal, H2A visa, by-the-piece, and all other non-citizen employees. In the case of sick leave, this applies to all employees, no matter how long they have worked for you. For family leave, the employee must be with the farm for at least 30 days before requesting the leave. This law does not apply to contractors (anyone for whom you issue a 1099 form) or people who have been laid off.
Sick Leave vs. Family Leave
Sick leave has to be specifically requested for one of these 6 reasons for a business owner to be required to provide it under Families First:
- The employee is ordered to quarantine by the government
- The employee is told to quarantine by a doctor
- The employee has COVID-19 symptoms and is seeking medical attention.
- The employee is caring for a family member sick with COVID-19 symptoms
- The employee is caring for children who are out of school/daycare because of COVID-19
- The employee has symptoms later recognized as COVID-19
For reasons 1-3 (personal illness) employers have to provide 100% of normal pay for 2 weeks or 80 hours (no overtime factored in). For reasons 4-6 employers must provide ⅔ of regular pay during that time period.
For the requirements of Families First, an employer only needs to grant paid family leave for an employee if they need to care for children who are no longer in school or childcare because of closures due to COVID-19. This paid leave can be requested for up to 10 weeks (in addition to 2 weeks of sick leave). This is also at the ⅔ rate of normal pay like the provision above.
There is an exemption to these policies for businesses with fewer than 50 employees. If granting this paid leave will endanger the viability of the business because of one of these three reasons:
- Expenses will exceed revenues because of these payments and the business will close
- This missing employee has specialized skills crucial to the functioning of the business
- No replacement employees are available for the work
Then the business could make the case that they can be exempt from this requirement. If you believe this applies to your business, learn more from the Department of Labor
Getting reimbursed by the Federal Government
The Department of Labor recommends using any money the employer has reserved from paychecks to pay quarterly taxes to pay for this leave. Then the employer can claim this payment on their quarterly Form 941 or 943 with the IRS. If there are no reserve funds to pay employees for leave, the IRS recommends filing a form 7200.
This is not an exhaustive explanation of the program and there are a lot more details to learn. For more information on how this applies to agriculture businesses, check out this webinar from the farm law experts at Farm Commons. For more general information, refer to the Department of Labor.