Families First Coronavirus Response Act

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Today the Senate approved H.R. 6201 (view bill here) and this evening President Trump signed the Coronavirus bill.  The new law becomes effective April 2, 2020.
 
Here is a quick summary of the key provisions of the Families First Coronavirus Response Act.  There are three sections in the bill that are of particular interests to employers:  

  • Division C (FMLA expansion),
  • Division E (required paid sick leave)
  • Division G (tax credits). 

DIVISION C – Emergency Family and Medical Leave Expansion Act
Prepared by the Democratic staff of the House Committee on Education and Labor
 
This provision modifies FMLA in the following ways:   

  1. Applies only to employees of employers with fewer than 500 employees and government employers; and
  2. Applies to any employee that has been employed for at least 30 days.
  3. Reduced the amount of time of unpaid leave from 14 days to 10 days.
  4. Following 10 days of unpaid leave, then the employer must pay the employee 2/3 of his/her compensation up to $200/day and $10,000 in aggregate.

 
Employees that qualify can take up to 12 weeks of job-protected leave under the Family and Medical Leave Act to be used for any of the following reasons:      (If you’re an employer under 25 employees you are exempt from the job protected aspect of the emergency FMLA expansion act)
 

  • To adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus;
  • To care for an at-risk family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of coronavirus; and
  • To care for a child of an employee if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a coronavirus.

 Few Exemptions to the Emergency FMLA Expansion Act

  • Employers under 25 employees are exempt from the job protected aspect of the emergency FMLA expansion act.
  • Allows employers with fewer than 50 employees to be exempt from the emergency FMLA expansion act IF the requirements would jeopardize the viability of the business.


 

DIVISION E – Emergency Paid Sick Leave Act
Prepared by the Democratic staff of the House Committee on Education and Labor
 
Employers with fewer than 500 employees and government employers are required to provide employees two weeks of paid sick leave, paid at the employee’s regular rate, to quarantine or seek a diagnosis or preventive care for coronavirus; or paid at two-thirds the employee’s regular rate to care for a family member for such purposes or to care for a child whose school has closed, or child care provider is unavailable, due to the coronavirus.
 

  • Full-time employees are entitled to 2 weeks (80 hours) and part-time employees are entitled to the typical number of hours that they work in a typical two-week period.
  • Paid Sick Leave under this law must be in addition to any existing paid sick leave policies of the employer and the employer is prohibited from making changes to its existing paid sick leave benefits.
  • Maximum amount employer must pay employee under this requirement is $511/day and $5,110 in the aggregate if leave taken by employee is due to (1) federal/state mandated quarantine; health provider advised employee to quarantine; or (3) employee is experiencing COVID-19 symptoms.
  • Maximum amount employer must pay employee under this requirement is $200/day and $2,000 in the aggregate if leave taken by the employee is due to (1) caring for child because school or childcare facility is closed; or (3) employee is experiencing condition specified by Secretary of Health and Human Services.

 
DIVISION G – Tax Credits For Paid Sick And Paid Family And Medical Leave
Prepared by the Democratic staff of the House Committee on Ways and Means
 
This section provides a refundable tax credit equal to 100 percent of qualified paid sick leave wages paid by an employer for each calendar quarter.  The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes). Qualified sick leave wages are wages required to be paid by the Emergency Paid Sick Leave Act.
 
The section makes a distinction between qualified sick leave wages paid with respect to employees who must self-isolate, obtain a diagnosis, or comply with a self-isolation recommendation with respect to coronavirus. For amounts paid to those employees, the amount of qualified sick leave wages taken into account for each employee is capped at $511 per day. For amounts paid to employees caring for a family member or for a child whose school or place of care has been closed, the amount of qualified sick leave wages taken into account for each employee is capped at $200 per day. The aggregate number of days taken into account per employee may not exceed the excess of 10 over the aggregate number of days taken into account for all preceding calendar quarters.
 

If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer. Employers may elect to not have the credit apply. To prevent a double benefit, no deduction is allowed for the amount of the credit. In addition, no credit is allowed with respect to wages for which a credit is allowed under section 45S.
 
Section 7003. Payroll Credit for Required Paid Family Leave. This section provides a refundable tax credit equal to 100 percent of qualified family leave wages paid by an employer for each calendar quarter.
 
The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes). Qualified family leave wages are wages required to be paid by the Emergency Family and Medical Leave Expansion Act.
 
The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.
 
Employers may elect to not have the credit apply. To prevent a double benefit, no deduction is allowed for the amount of the credit. In addition, no credit is allowed with respect to wages for which a credit is allowed under section 45S.

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In addition to this article, the following links are the best source of information:

Here is the link for the poster that should be posted at your location.  Please ensure that you have these posted with your DOL posters by April 1, 2020.    Download the poster here

The best sources of information continue to be the government sites.

Families First Coronavirus Response Act: Overview

Families First Coronavirus Response Act: Questions and Answers

Families First Coronavirus Response Act: Employer Paid Leave Requirements

Coronavirus Tax Relief


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