Yesterday evening, President Trump signed the Families First Coronavirus Response Act. This new law requires employers with up to 500 employees to provide paid sick leave and paid family leave while also providing a refundable payroll tax credit to employers to cover 100% of the cost of wages.
There is also a refundable income tax credit available for self-employed individuals. Employers with less than 50 employees must apply for a hardship exemption in order to qualify.
Amendments To Emergency Family and Medical Leave Expansion Act (FMLA)
- Eligible employees are those who have been employed for at least 30 calendar days by the employer with respect to whom leave is requested.
- Employers will be required to offer 12 weeks of paid family leave for employees who have been employed for at least 30 days with a minor child in the event of the closure of the child’s school or place of care. The first 10 days are unpaid, but the employee can overlap this with the 10 days of paid sick leave.
- The paid leave benefit can be no more than $200 per day and an aggregate amount of $10,000. The paid family leave credit offsets 100% of employer costs for providing mandated paid family leave.
Emergency Paid Sick Leave Act
Employers will provide paid sick time in the event that the employee is unable to work (or telework) due to:
- The employee being quarantined or isolated by the order of federal or state authority.
- The employee has been advised by a health care provider to self-quarantine.
- The employee is experiencing symptoms of COVID–19 and is seeking a medical diagnosis.
- The employee is caring for an individual who is subject to the order as described above.
- The employee is caring for a child if the school or place of care of the child has been closed or the child care provider of the child is unavailable.
- Full-time employees will be entitled to up to 80 hours of paid sick leave.
- Part-time employees will be entitled to their average number of hours worked over a two week period.
- Employers must offer two weeks (10 days) of paid sick leave for COVID-19-related reasons. If the sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all the employee’s wages up to a maximum benefit of $511 per day.
- If an employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day.
- The paid sick leave credit offsets 100% of employer costs for providing mandated paid sick leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.
- The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.
- Self-employed individuals will be provided refundable income tax credits in an amount of what self-employed workers would have received if they had been an employee receiving paid leave benefits pursuant to the mandates. For any given day that a self-employed worker could not work, they can claim a “rough justice” tax credit in the amount of their average daily self-employment income for the year.
This law will be in effect until December 31, 2020.