Wednesday 3/18, the Families First Coronavirus Response Act H.R. 6201, was overwhelmingly passed in the Senate, (which has been passed with a bipartisan vote in the House on 3/14), without any further changes. President Trump signed the bill shortly after it left congress. The legislation, having now been signed into law, will go into effect within the next two weeks. All provisions will go into effect no later than 15 days since the enactment of the law and will expire on December 31st, 2020. Here is what you need to know:
Emergency Sick Leave
- Private sector employees with fewer than 500 workers (and government entities) will have to provide employees who cannot work or telecommute with paid sick leave for self-quarantine, coronavirus symptoms, caring for a child with symptoms, or cannot find child care.
- Employers in the health care provider field may elect to exclude employees.
- Full-time workers are to receive 80 hours of sick leave, and part-time workers are granted leave equivalent to their average hours worked in a two-week period.
- Paid sick time will not carry over from year-to-year
- Workers taking leave for themselves will have to be paid at least their normal wages, or the applicable federal, state, or local minimum wage (whichever is greater).
- Wages paid under the emergency sick leave will not be subject to the 6.2 percent employer social security payroll tax.
- Employers with existing paid leave policies will be required to provide sick leave under this policy.
- Employers are prohibited from requiring workers to find replacements to cover their hours, and discharging or discriminating against workers for requesting paid sick leave (or filing a complaint against the employer related to such)
- Employers will have to post a notice containing information regarding the emergency sick leave provisions no later than 7 days after the law is enacted.
- Small businesses with fewer than 50 employees are exempt from the paid leave requirement, “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
Emergency Family Leave:
- Private sector employees with fewer than 500 workers will have to provide 12 weeks of FMLEA leave for employees who have been on the job for at least 30 days and are unable to work or telecommute because they have to care for a minor child if the child’s school or place of care has been closed.
- The first 10 days of leave can be unpaid. For subsequent leave days, workers will receive a benefit from their employers equal to at least two-thirds of their normal pay rate.
- Wages will not be subject to the 6.2 percent employer social security payroll tax.
- The employee on leave must be restored to his prior position. (This does not apply to small businesses of fewer than 25 employees if the position no longer exists due to economic conditions.)
Employer Tax Credits:
Refundable credits for the employer (but not employee portion) of the Old-Age, Survivors, and Disability Insurance (OASDI) component of payroll taxes (the 6.2% employer portion of the Social Security Tax) will be provided to employers to cover wages paid to employees for time off under the above sick leave and family programs.
- The sick leave credit for each employee will be for wages, of up to $511 per day while the employee is receiving paid sick leave to care for him/herself or $200 if caring for a family member or child whose school is closed. The credit is limited to 10 days per quarter.
- To prevent double benefit, employers must include the amount of credit received in their gross income.
- Any wages taken into account in determining the credit allowed under the above emergency provisions will reduce the Code section 45S paid family and medical leave credit (established by the 2017 tax reform act available to the employer).
- An employee can elect to not take the credit for a given quarter.
- The Department of Treasury will be authorized to issue regulations or guidance related to these credits.
Now that this bill has been signed into law, you should act swiftly to amend policies and train employees, to ensure that employee leaves are administered in accordance with the new law. Find the full law here