What Nannies & Parents Need to Know About The Family First Coronavirus Response Act

photo: unsplash x kelly sikkema

Within the past week we’ve hopped on/tuned in to various Q&A calls with Jay Shultz of Homework Solutions. We then followed up with Jay separately because we had many additional clarifying questions (aka, this is all SO very confusing and seemingly changing by the day). What exactly are nannies entitled to during this unprecedented time? We asked about the Family First Coronavirus Response Act (FFCRA) and how it applies to Household Employers/Employees. We tried to really break it down so that it’s easy to understand. Here’s what we gathered and what you should know:

**Disclaimer: This information is based on our interpretations, observations, and guidance from experts; it should not be taken as fact nor used as professional or legal advice. Please use this as a starting point and do your own research. 

THERE ARE 4 COMPONENTS TO THIS BILL:

1. Mandatory Paid Sick Leave: This bill mandates that effective April 1, every employee of an employer with less than 500 employees, is eligible for 2 weeks paid sick leave for any of the following reasons: 1. You are subject to a quarantine or government order. 2. Your doctor has told you to stay at home. 3. You are exhibiting symptoms of Coronavirus and are being tested/monitored. 4. You are caring for a family member or someone who is ill and under the guidance of a doctor who says they need to stay home. 5. You are caring for a child who is home due to school/daycare being closed.

How the paid mandatory paid sick leave works: 

a.) If you are taking sick leave because of reasons 1, 2, or 3, your two weeks are paid at 100% of your earnings. With that said, they are capping it 40 hours per week, so if you work more than that, you will only be paid for 40 hours at your hourly rate. If you work part-time, for example only 25 hours per week, you will be paid for 25 hours at your full hourly rate for the 2 weeks. If your hours vary from week to week, they will look back 6 months and you will be paid your average hours per week.

b.) If you are taking sick leave because of reasons 4 or 5, you will receive 2/3 of your pay for the 2 weeks. After the two weeks, you can move onto part 2 of this bill…

2. Mandatory Paid Family Leave: If you have to stay home to care for a child, you have an additional 10 weeks at 2/3 your rate (this caps at $200 per day, so for some people, it could be less than 2/3 their pay). The first 2 weeks are technically unpaid, but you can use the paid sick leave from part 1 or your own PTO, then you’ll receive 10 weeks of family leave at 2/3 your rate. In sum, there is a 12 week period where you receive income if you are still employed by your employer.

3. Who is paying for this and how does it work for employers? There is a tax credit/refund to cover components 1 and 2 (Mandatory Paid Sick Leave and Mandatory Paid Family Leave). This bill offers a 100% tax credit/refund for employers who keep their employees and front the money for the 2 weeks paid sick leave and the 10 weeks paid family leave. The employee will be paid via the employer, and the employer will be reimbursed when they file their taxes, or possibly even receive a refund sooner than that. All the details have not been worked out, but the bill is guaranteeing a 100%, dollar for dollar, reimbursement if employers front this money. The goal is to really encourage employers to continue employing their employees throughout this pandemic.

4. Additional funding for unemployment insurance: Even with the 100% refund that employers will receive, what if an employer says they cannot front the money and wait for the government to repay them or they have lost their job and no longer have a need for a nanny? They have a right to terminate/lay off their nanny and say this position doesn’t exist anymore. If there is no longer a need for the nanny’s work right now, an employer can also furlough their nanny. As long as they are paying on the books, the nanny can apply for unemployment and receive that money right away. States have almost across the board said they are not going to raise the taxes on employers on unemployment claims, so it really should have no impact on the employer if their nanny files for unemployment (please check your specific state to clarify). Thankfully the temporary new federal unemployment plan provides those eligible, an additional $600 per week on top of their state’s unemployment benefit. Even if a nanny makes less than $600 per week at their job, as long as they are eligible for unemployment, they are still entitled to the full $600 federal unemployment benefit. This weekly $600 will last up until July 31.

For nannies who are paid off the books, employers can proactively get their employee on the books now. Homework Solutions will help nannies get on the books and get right from last year, so PLEASE call them if you’re in this situation. It requires unemployment tax filings, federal tax filings, the family paying back taxes they owe, and the nanny paying back income taxes that they owe. Jay mentioned that it’s important that both employers and nannies calculate the cost differential. Could it potentially end up costing the nanny more to get on the books than the unemployment they’d receive? And for families, depending on how long they’ve illegally employed their nanny, could it potentially cost them more to pay all the back taxes and penalties than it would to just keep employing their nanny so that their nanny doesn’t file for unemployment? This is not to say families should knowingly continue to employ their nanny illegally, but it is wise to crunch the numbers and budget all the back taxes and penalties that will be owed. This way families can come up with a plan/timeframe to get their nanny on the books in relation to their current financial situation. 

Some final things to consider not directly related to this bill: We asked Jay at Homework Solutions about the various cities/states that are labeling ALL nannies as “essential”, regardless of what the parents do for a living and regardless of if there is a capable parent at home to care for the children.

1. In states/cities where nannies are deemed essential in one blanket statement, it is posing problems with being eligible for unemployment. In these situations, even if a nanny works for a stay at home parent or parents working from home in non-essential sectors with a much lighter workload and the ability to realistically tag team and get by without their nanny, if a nanny decides they want to stay home for their own safety or maybe because the family isn’t following the same social distancing precautions the nanny is, the nanny would likely not be eligible for unemployment. If a nanny is deemed “essential” regardless of what the parents do for a living and regardless of if there is a parent at home who could take care of the kids, if a nanny refuses to continue working, that is the nanny terminating and saying the job no longer works for them. Because it is the nanny’s choice, not the parents’ nor a government mandate, that means the nanny is not eligible for unemployment.

If you feel this isn’t fair and you’d like more resources and protections because you don’t provide childcare to essential employees and you’d like the option to prioritize your own safety without completely losing your income, consider writing your Governor/Mayor a letter. Many nannies want to continue working no matter what, but for the nannies who don’t or for the nannies who would like reduced hours because their bosses are working reduced hours yet the nanny is still being required to work their full hours beyond what is considered “essential”, blanket statements about ALL nannies being essential, is causing them to be ineligible for standard government resources right now. We’re not sure what the solution is because again, many nannies want to and need to continue working no matter what, but it seems that some sort of clarification might be helpful.

2. Jay’s suggestion for if you’re in a situation where your state/city has labeled all nannies essential and you don’t feel comfortable continuing to work (or even if you work for essential employees, but you still want/need to stay home), is to consider having a sit down with your bosses to discuss. Explain your concerns and how you’re feeling, and again work together to find a solution that will work for everyone. Jay says “to talk to your employer and work together to come up with a solution that works for both sides. You and your employer know your situation best, and if you work together to get through this, you'll have a stronger relationship when it is all over”. He further explains, “Perhaps [the solution] is working in some reduced capacity, taking the paid sick leave offered under FFCRA, or a retainer offered to the employee in the form of paid leave to ensure [the nanny] is available to work when the family needs her a few weeks down the road.”

This is a difficult situation all around, so it’s imperative both nannies and parents work together to problem solve and extend common courtesy during this unprecedented time. To learn more about what both nannies and families are experiencing, as well as important things to consider, take a look at our other article Nannies, Parents, and The Coronavirus (COVID-19).