By Lisa Calick

President Trump has now signed into law the Families First Coronavirus Response Act, providing emergency economic relief and support to American workers who may be impacted by the COVID-19 pandemic.  The Act applies to businesses with less than 500 employees and will take effect on April 2, 2020.

There are two main aspects of the Act as outlined below:

Emergency Paid Sick Leave

This portion of the Act allows eligible employees to take two weeks of paid sick leave in the event they need to quarantine or seek diagnosis or care due to COVID-19, including the need to care for a family member in such a situation. All employees are covered under this portion of the law.

Employees taking time off for their own health reasons are eligible for full pay, up to a maximum of $511 per day and $5,110 in the aggregate.  Employees who need to stay home to care for a family member who has been affected would receive two-thirds of their pay, up to $200 per day and $2,000 in the aggregate.

Emergency Family and Medical Leave

This portion of the Act allows for emergency FMLA leave for employees who are unable to work or telework in order to care for a child whose school or place of care is closed due to a public health emergency related to COVID-19.   Employees who have worked for 30 days for an employer are entitled to 12 weeks of job-protected leave within a 12 month period.

The first 10 days of this FMLA related leave is unpaid unless the employee receives paid sick leave under this law, or other accrued time off available to him or her.  The remaining portion of this type of leave is payable at two-thirds of the employee’s regular pay, to a maximum of $200 per day and $2,000 in the aggregate.

Small businesses with less than 50 employees may apply to the Department of Labor for a financial hardship waiver from the leave provisions if providing this benefit jeopardizes the viability of the business.

Employer Tax Credits

In order to help businesses with the cost of providing paid leave under this law, employers would receive refundable payroll tax credits equal to 100% of wages paid to employees who take time under this law.  The credit is capped at $511 per day per employee while the employee is receiving paid sick leave to care for themselves, or $200 if the sick or family leave is to care for a family member or child whose school is closed.

The tax credit is applied against the employer share of FICA taxes.  If the amount of credit exceeds the employer’s payroll tax liability, the excess amount will be refunded to the employer.

These rules apply only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury which is during the 15-day period beginning on the date of the enactment of the Act, and ending on December 31, 2020.

For more information on how this may apply to your business, feel free to reach out to a Wiss team member.