The coronavirus relief bill signed into law by President Donald Trump on Wednesday includes provisions for paid sick leave, family leave and medical leave, along with tax credits to help employers and the self-employed pay for them.
The Families First Coronavirus Response Act (FFCRA), H.R. 6021, also includes provisions for free coronavirus testing, enhanced unemployment insurance, expanded food security initiatives and increased Medicaid funding from the federal government.
The legislation impacts businesses and families across the country and includes extensive relief for businesses with fewer than 500 employees. Below are key provisions of the legislation that are likely to impact employers:
Emergency Paid Sick Leave
- Businesses need to provide two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay (up to $511 per day or $5,110 in aggregate) if the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis. The provisions limit pay to two-thirds of the employee’s regular rate of pay (up to $200 per day or $2,000 in aggregate) when the leave is to care for a family member who has been diagnosed and/or is in quarantine or to care for a minor child whose school or day care has closed due to the coronavirus.
Emergency Family and Medical Leave Expansion Act
- The FFCRA provides employees the right to take up to 12 weeks of job-protected leave when an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
- Under this leave, the first 10 days can be unpaid, but employees may use other available time off during this time, including Emergency Paid Sick Leave. After the first 10 days, employers are required to provide no less than two-thirds of the employee’s usual pay up to $200 per day, $10,000 in total.
Tax Credits for Paid Sick and Paid Family and Medical Leave
- Payroll Credit for Required Paid Sick Leave: a refundable tax credit for 100 percent of qualified paid sick leave wages paid by an employer, allowed against the employer portion of Social Security Taxes.
- Credit for Sick Leave for Self-Employed Individuals: a refundable tax credit for 100 percent of qualified sick leave wages for self-employed individuals in quarantine for coronavirus, or for 2/3 of qualified wages when caring for a quarantined family member or child whose school or place of care was closed due to coronavirus. This credit is allowed against income taxes.
- Payroll Credit for Required Paid Family Leave: a refundable tax credit for 100 percent of qualified family leave wages paid by an employer, allowed against the employer portion of Social Security Taxes.
- Credit for Family Leave for Self-Employed Individuals: a refundable tax credit equal to 100 percent of qualified family leave wages for self-employed individuals.
Visit dol.gov to read more about employee paid leave rights.
Each of these tax credits has complex qualifications, guidelines and reporting requirements that could change rapidly and dramatically as the coronavirus outbreak continues to develop. Please contact us with any questions or if you require assistance with the emergency legislation.
The coronavirus outbreak is a critical, developing situation and additional measures are forthcoming. The Reynolds + Rowella team is committed to providing up to date information and clarification as it becomes available.
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