The Families First Coronavirus Response Act (FFCRA) requires small employers (less than 500 employees, with certain provisions for those under 50) to provide leave and benefits during the COVID-19 emergency to employees who are under quarantine, experiencing symptoms, or caring for loved ones. Employers will be entitled to a refundable credit for their required emergency leave payments (including the cost of providing health insurance coverage) for an employee during the employee’s emergency leave period.
This page outlines the options for handling Families First Coronavirus Response Act (FFCRA) payment of leave in Unanet for Hourly and Salaried users.
What’s covered in this document:
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Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
- is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- has been advised by a health care provider to self-quarantine related to COVID-19;
- is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
- is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
- is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Duration of Leave
For reasons 1-4 and 6: A full-time employee is eligible for 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period. Total leave of 80 hours is all that a single employee is eligible for. Employees can choose to use this time for themselves or to take care of a dependent who has been impacted by COVID-19.
For reason 5: A full-time employee is eligible for up to 12 weeks of leave (two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave) at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
Calculation of Pay
Scenario 1: For leave reasons 1, 2, or 3: Employees taking leave are entitled to pay at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
Scenario 2: For leave reasons 4 or 6: Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
Scenario 3: For leave reason 5: Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period).
Summary of Leave Reasons
Subject to quarantine/isolation order
|80 hours||Regular rate||$511/$5,110|
|2||Advised to self-quarantine||80 hours||Regular rate||$511/$5,110|
|3||Is symptomatic/seeking diagnosis||80 hours||Regular rate||$511/$5,110|
|4||Caring for someone subject to 1 or 2 above||80 hours||2/3 regular rate||$200/$2,000|
|5||Caring for a child due to school/daycare closure||12 weeks||2/3 regular rate||$200/$12,000 (12-week cap)|
|6||Experiencing substantially-similar conditions||80 hours||2/3 regular rate||$200/$2,000|
Note: This table applies to full-time employees; part-time employees are eligible for the average number of hours they work in a 2-week period. A 6-month average is suggested if a typical part-time work schedule does not exist.
Following is a very informative webinar replay hosted by Paylocity that includes excellent information on the FFCRA and the Coronavirus Aid, Relief, and Economic Security Act, or Cares Act, that you may also be interested in:
To accommodate the various scenarios as efficiently as possible, the recommended approach is to collect the hours only for each scenario within Unanet and allow your payroll company to calculate the amount of pay to each employee.
We recommend this approach for several reasons:
- The legislation is complex. Accommodating the scenarios in Unanet, generally speaking, would require businesses to develop a deep understanding of the legislation, and we believe your payroll provider will be able to help you understand the legislation fully.
- Your payroll provider will be able to help you build appropriate company policies around the rules and answer questions that are left to interpretation such as:
- Must employees charge in full-day increments?
- How are the caps enforced if you do not charge in full-day increments?
- The legislation is built around the premise of daily and weekly caps. Unanet is hours-based and cannot readily accommodate daily or weekly pay caps.
- Accommodating the scenarios properly within Unanet, particularly for salaried employees, is not feasible with dilution turned on.
You will want to perform the following list of items in conjunction with your payroll provider.
- Ensure your payroll company understands and can accommodate the legislation.
- Set up three new earnings codes in your payroll system - one for each scenario above.
- Update your existing Unanet export to payroll to include these new earnings codes.
- Update the payroll journal entry to record the amounts as a receivable into your financial system (as it will be reimbursed from the government).
The following items are the recommended changes to your Unanet system.
Create new Pay Codes (Admin > Setup > Time > Pay Codes) to align with the ones created in your payroll system.
Allow the Pay Code on the eligible Salaried Employee Types and on the COVID Projects.
Important Note: These Pay Codes are set up to be Leave Without Pay type codes, so the Time Details reports and Actuals reports within Unanet will show zero cost for the hours. The actual pay amounts will be calculated through the payroll provider and entered into your financial system via journal entry.
Create the Projects as shown below. We recommend you COPY an existing Leave project to ensure the appropriate Project selections are made, such as posting group, project type, allow future time, etc
Complete the project setup by:
- Set the Budget Date range to 4/1/2020-12/31/2020. (Project Profile > Budget tab)
- Do not allow Self-Assign. (Project Profile > Access tab)
- Set as Leave Type and allow Future Time. (Project Profile > Time tab)
- Select "Indirect Posting Group" from the Posting Group dropdown menu. (Project Profile > Accounting tab)
If no Indirect Posting group is available, you will need to create a new Posting Group. See notes below in the Financials Users section.
- Only one Pay Code should be allowed on each Project. (Project Profile > Left Menu > PayCodes)
Create the Assignments to the applicable scenario, using the assignment dates and hours budgets to restrict as required.
Update Payroll Export
Ensure the new Pay Codes will be included in your export to payroll. It is important to enter a few hours to test how the new codes appear in the payroll exports. Most payroll exports should automatically include the new Pay Codes, but you may require assistance from support if they are not automatically included. It's important to enter a few hours to test how the new codes appear in the payroll exports.
If you send payroll dollars to your payroll provider (in addition to hours) you will need to tweak the export logic so that ONLY hours come over for these earnings codes. Otherwise, the dollars sent to Payroll will be $0.
Note: During the labor cost post, hours only ($0 cost) will post to this account. The actual pay amounts will be calculated through the payroll provider and entered into your financial system via journal entry.
- Create a new General Ledger account (should be an asset account, as this paid leave is reimbursable by the government). (Admin > Setup > Accounting > Accounts)
- Map the Labor Line of the three new COVID Projects to the new GL Account. (Project Profile > Left Menu > Accounts)
Note: This will post the hours only, and a $0 Cost.
- Ensure your Labor Cost on the "Indirect" Posting Group is set to look at the Project for posting indirect expenses. (Admin > Setup > Accounting > Posting Groups)
- If you have only a single "Default" Posting Group, you will need to create a new Posting Group for use only on these three new Projects that looks like the one shown above (Labor Cost Line mapped to the Project). Be sure to select this new Posting Group (or the Indirect Posting Group if you already had one) on the Accounting tab of each of the three new Projects.
- There will be no effect on indirect rates or cost pools for this leave, as these amounts will be reimbursed by the government.
These approaches are not recommended for the reasons noted above, but we are providing some alternative solutions in case your payroll provider is not able to accommodate the legislation.
Alternative Solution to Accommodate Hourly Employees
Within Unanet, accommodating employees paid by the hour is simpler than salaried employees. Changes to hourly employees' pay rates to accommodate this legislation can be done using Pay Code cost rate factors and/or cost rate overrides at the assignment level. For Hourly employees, we will use Pay Codes and assignment controls to enforce the hours and cost thresholds for all scenarios.
Unanet utilizes an hours-based approach, so we will convert any "Daily Limits" mentioned in the legislation to "Hourly Limits" and make appropriate assignment level overrides.
For simplicity, the hourly threshold applicable to Scenario 1 is $511/8 or $63.875. The hourly threshold applicable to Scenarios 2 and 3 is $200/8 or $25. If your employees typically work overtime, this logic requires further consideration.
- Create the Projects as outlined above.
- Create a new Pay Code for your Hourly employees to use. Allow the Pay Code on the eligible Hourly Employee Types and on the COVID Projects (as outlined above).
Assign the Hourly employees to the appropriate Hourly projects, utilizing the date ranges and hours budgets as needed, and overriding the cost rates (if over the thresholds outlined).
Alternative Hourly Solution for Scenarios 2 & 3 - All Users Under $25 Maximum
For use in Scenarios 2 and 3, if none of your Hourly employees are over the $25 hourly maximum (e.g., $200 per day), then you may wish to utilize another Pay Code option (shown below) instead of the one described above.
Alternative Hourly Solution for Scenarios 2 & 3 - Many Users Both Over and Under $25 Maximum
If you have a large number of Hourly employees with varying pay rates, both over and under the threshold, you could utilize both Pay Codes, but limit by Project which employees have access to which Pay Codes. Users over the $25 cost rate limit would charge to a Project allowing the COVID-R Pay Code (utilizing an override of the cost rate to $25). Users under the $25 cost rate limit would charge to a Project allowing the COVID-H2/3 Pay Code shown below.
This solution is more complex and requires additional understanding and setup, but could definitely be a more efficient approach if you have a large number of Hourly employees with varying pay rates, both over and under the threshold.
The following example shows how the system would use each of these scenarios. Imagine the Over Cap employee charges to the COVID-R Pay Code while the Under Cap employee charges to the COVID-H2/3 Pay Code.
This saves the Admin from needing to override every single employee in the assignments for these projects.
Alternative Solution to Accommodate Salaried Employees
You will need the assistance of a Unanet consultant to proceed with this method.
Salaried employees are typically paid the same regardless of hours worked and cost rate dilution comes into play, making accommodating these rate changes for salaried employees more difficult.
We will use a Standard Pay Code in conjunction with an export process to compute any overages related to the 2/3 pay requirements and the pay caps.
Note: The data reflected in the Time Details and Actuals reports will be overstated.
- Create the Projects as outlined above.
- Create a new Pay Code for your Salaried employees to use. Allow the Pay Code on the eligible Salaried Employee Types and on the COVID Projects.
- Assign employees with the applicable amount of hours and date ranges.
- At the end of the payroll period, generate an export (with pre-defined logic built in to accommodate each scenario, pay caps, 2/3 pay rate applications, etc.) to send to payroll, OR, manually calculate the overage amount to send to payroll.
- For Financials users, these costs should be sent back into Unanet through your regular payroll journal entries.
Create and load an Export template which calculates the amount of pay OVER the eligible FFCRA pay earned by employee in the payroll period.
A sample is attached here: Covid Payroll.csv
- Download the sample export attachment.
- Go to Admin > Export > Import and import the template.
- Review and edit the logic of the export template. The export must be tweaked to match your system and processes. You may need the assistance of a Unanet consultant.
- Test to ensure it is appropriately calculating the data.
- Run the export and send the additional file to Payroll each period. Record the journal entry to reduce the amount of Payroll Unanet overcalculated.
Alternative Solution - Do Not Reduce or Cap Employee Pay
- Create the new Projects/Pay Codes described above (which in this case will be set to Standard, Diluted type). Assign employees to charge the allowed hours during the allowed timeframe but do not limit or reduce their pay. Obviously, the overage will not be Federally reimbursed, so this is a company policy decision.
Note: You will still want to track the portion of pay eligible for Federal reimbursement in a separate receivable account. Recording this would be a manual calculation/journal entry.