Berntson Porter Coronavirus Resource Center Details

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Families First Coronavirus Response Act Signed Into Law

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The Families First Coronavirus Response Act mandates paid sick leave and expanded family and medical leave for COVID-19 related reasons and creates the refundable paid sick leave credit and the paid child care leave credit.

Family and Medical Leave

Private employers with fewer than 500 employees must provide both paid and unpaid public health emergency leave to certain employees through December 31, 2020. In order to qualify, an employee must have been employed for at least 30 calendar days and be unable to work (or telework) in order to care for a child under age 18 because the school or care facility has been closed or a child care provider is not available due to a Covid-19 related emergency. The emergency must be declared by a federal, state or local authority. The first ten days of leave is unpaid and then paid leave is required. The employee may choose to use otherwise-available paid leave concurrent with their first ten days of leave. The payment is at least 2/3 of an employee’s regular rate of pay times the number of hours the employee would normally be scheduled to work. The maximum payment amount is $200 per day and $10,000 in the aggregate. Employers with under 50 employees may be exempt.

Paid Sick Leave

Private employers with fewer than 500 employees must provide 80 hours of paid sick time to full-time employees who are unable to work (or telework) for virus-related reasons (see groups below). If the employee works part-time, they are entitled to sick pay based on their average hours worked over a two week period. This amount is in addition to any current PTO offered. The amount payable depends on the reason for the absence.

Group one – Compensation at regular rate of pay, up to a maximum of $511 per day for ten days

  1. Subject to a quarantine or isolation order
  2. Advised by a health provider to self-quarantine
  3. Experiencing symptoms and seeking diagnosis

Group two – Compensation at two-thirds of their regular rate of pay, up to a maximum of $200 per day for ten days

  • Caring for an individual described in categories one through three above
  • Caring for a son or daughter whose school is closed or child care provider is unavailable
  • Experiencing a “substantially similar condition” specified by the government

The sick leave mandate takes effect no later than 15 days after March 18, 2020 and expires December 31, 2020. Employers with under 50 employees may be exempt.

Tax Credits Available

Under the Act, credits against FICA or Railroad Retirement Tax Act taxes are provided to employers and self-employed individuals that provide the leave. The family and medical leave credit for each employee is the amount of his or her leave pay limited to $200 per day with a maximum of $10,000. The employee paid sick leave credit is generally equal to the lesser of the amount of his or her leave or $511 per day while the employee is receiving paid sick leave to care for themselves or $200 per day if the sick leave is to care for a family member or child whose school is closed. These credits are subject to certain limitations.

The amounts of both the employee leave and sick pay credits are increased by the portion of the employer’s qualified health plan expenses that are properly allocable to qualified sick leave wages or qualified family and medical leave wages. Qualified health plan expenses are amounts paid or incurred by the employer to maintain group health plan, but only to the extent that such amounts are excluded from the gross income of employees.

Self-Employed Individuals

The Act provides for credits of 100% of a self-employed individual’s sick-leave equivalent amount or 67% of the individual’s sick-leave equivalent amount if they are taking care of a sick family member or taking care of a child following the child’s school closing for up to ten days. The sick-leave equivalent amount is the lesser of average daily self-employment income or $511 per day to care for the self-employed individual or $200 per day to care for a sick family member or child following a school closing. The family leave equivalent is up to 50 days multiplied by the lesser of $200 or 67% of their average self-employment income.

FICA Exclusion

Wages paid under the sick leave and family leave mandates are not subject to the employer’s share of FICA (6.2%) or employer’s railroad retirement tax, if applicable.

While the Families First Coronavirus Act has been signed into law and is a welcome relief for many impacted by the coronavirus, the related regulations are still being developed.  At this point, we recommend businesses update current policies for this Act and develop a process for tracking usage of these expanded family and medical leave options for COVID-19 related reasons.