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Families First Coronavirus Response Act: What It Means for Small Businesses

Wednesday, March 25, 2020   (0 Comments)
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Last week, the Families First Coronavirus Response Act was signed into law by President Trump to provide employees with paid leave for their own healthcare needs or the care needs of their family. 

 

This new legislation requires private for-profit and not-for profit employers who employ fewer than 500 employees, to provide a specific amount of Paid Sick Leave and potentially additional paid leave under the temporarily expanded Family and Medical Leave Act (FMLA). 

 

A breakdown of these two new benefits are as follows:

 

Two-Week Emergency Paid Sick Leave Benefits

 

Covered employees are entitled to up to 10 days of qualified paid sick leave if the employee is unable to work (or unable to work remotely) due to any of the following circumstances:

 

  1. Is subject to a federal, state or local quarantine or isolation order related to COVID-19
  2. Has been advised by a healthcare provider to self-quarantine due to concerns related to the virus
  3. Is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
  4. Is caring for an individual subject to a quarantine or isolation order and has been advised to self-quarantine due to concerns related to COVID-19
  5. Is caring for a son or daughter because the school has been closed, childcare is unavailable or other precautions
  6. Is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services

 

These benefits are to begin no later than 15 days after enactment (April 2, 2020 at the latest) and end on December 31, 2020.

 

Qualified Sick Leave Wages

 

The amounts payable to an employee unable to work for the reasons noted above will be:

  • The employee’s regular rate, up to $511 per day ($5,110 maximum) to quarantine, seek a diagnosis or preventive care for COVID-19 (items 1 – 3 above) or
  • Two-thirds of the employee’s regular rate, up to $200 per day ($2,000 maximum) to care for a family member or a child affected by school closing or unavailable childcare, or the employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services (items 4-6 above)

 

Other Considerations regarding the Emergency Paid Sick Leave

 

  • Covered Employers may not require employees to take other paid leave available to them prior to receiving this new benefit. The legislation continues to provide that nothing in it shall be construed to diminish the rights or benefits an employee is entitled to under an existing employer sick leave policy.
  • Covered Employers are required to post and keep posted a notice from the U.S. Department of Labor (DOL) describing the emergency paid sick leave requirements. A model of this notice will be provided by the DOL within 7 days of the enactment of the law (no later than April 2, 2020).
  • Those employees who work full-time are entitled to 10 days (80 hours) of Qualified Sick Leave Wages. Part-time employees are entitled to the typical number of hours of Qualified Sick Leave Wages they would typically work in a two-week period.
  • There is no minimum length of employment to qualify for this benefit. 

 

 

Paid FMLA Benefits

 

Under the expanded Family and Medical Leave Act, employees who have been employed for at least 30 days will have the right to 12 weeks of job-protected leave for the following circumstances:

 

  1. To care for a child, if the child’s school or place of care has been closed or
  2. The child care provider is unavailable, due to COVID-19.

 

FMLA Wages

After the first two weeks of FMLA (covered by the Emergency Sick Leave Wages), qualified employees will receive a minimum of two-thirds of their usual pay, up to $200 per day ($10,000 maximum). 

 

 

Tax Credits

 

To assist with the cost of the Emergency Sick Leave Benefits and the expanded FMLA benefits, the IRS has stated the following:  “Covered Employers will be able to retain an amount of the payroll taxes equal to the amount of the qualifying sick and child care leave that they paid, rather than deposit them with the IRS.  Payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.  If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able to file a request for an accelerated payment from the IRS.”  Additional details are expected to be announced soon. 

 

For more information on this legislation, visit https://www.irs.gov/coronavirus. If you work with a payroll provider, we would encourage you to contact them for additional instructions. 


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