The Families First Coronavirus Response Act was signed into law on March 18, 2020. This new law includes requirements for specified employers to provide emergency paid sick leave, as well as emergency paid leave under the Family and Medical Leave Act (FMLA).
In addition, small and mid-sized employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them for the cost of providing Coronavirus-related leave to their employees, including health insurance costs. The Act is intended to enable employers to keep workers on their payrolls. These provisions are set to sunset on December 31, 2020.
Our understanding of the primary provisions of the Families First Coronavirus Response Act are enumerated below. However, we recommend you contact your employment or labor attorney for a complete understanding of how the Act will apply to your business.
Emergency Family and Medical Leave Act Expansion
• Employers with fewer than 500 employees are covered.
• Any employee who has been employed for at least 30 calendar days is covered, though employers may be able to exclude health care employees and emergency responders. There is also an exemption for businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business.
• This leave covers employees that need to care for a child under 18 if the child’s school or day care has been closed, or the childcare provider is unavailable due to a public health emergency.
• This bill provides for up to 12 weeks of job-protected leave.
• The first 10 days of emergency FMLA leave can be unpaid. (Other paid time off, and emergency sick leave under the FFCRA, may be applied.)
• After 10 days, employers are required to pay two-thirds of the employee’s regular rate of pay for the number of hours they would normally be scheduled to work, limited to $200 per day and $10,000 total.
• This leave is job-protected. The employer must restore employees to their prior positions, or equivalent, upon the expiration of the need for the leave.
Emergency Paid Sick Leave
• Employers with fewer than 500 employees are covered.
• All employees are covered (no 30-day employment provision), though employers may be able to exclude health care employees and emergency responders. There is also an exemption for businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business.
• This leave covers employees who are unable to work (or telecommute) because:
o The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19
o The employee has been advised by a health care provide to self-quarantine due to COVID-19
o The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
o The employee is caring for an individual subject or advised to quarantine or self-isolate (two thirds pay)
o The employee is caring for a child whose school or day care is closed due to COVID-19 (two thirds pay)
o The employee is experiencing any other substantially similar condition (two-thirds pay)
• Full-time employees are entitled to 80 hours of paid sick leave and childcare leave. Part-time workers are entitled to leave equal to the typical number of hours they work in a two-week period.
• Sick leave must be paid at the employee’s regular rate of pay for leave used for their own illness, quarantine or care, capped at $511 per day and $5,110 total.
• Sick leave must be paid at two-thirds of the employee’s regular rate of pay if taken to care for a family member or minor child whose school has closed or the provider is unavailable, capped at $200/day and $2,000 total.
• Employers cannot require employees to use other leave first.
Payroll Tax Credit
• Applies to both the emergency FMLA expansion and the emergency paid sick leave.
• Refundable tax credit against the employer portion of Social Security taxes.
• Only available to employers that are required to offer these benefits under the bill.
• If payroll tax credits are not enough to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that is anticipated to be released next week.
For more information about the credits and other relief, visit Coronavirus Tax Relief at IRS.gov. and subscribe to our Newsletter to receive the latest guidance from C&D.
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