COVID-19, Employee Benefits Compliance

President Signs Families First Coronavirus Response Act—Paid Sick Leave Soon to Be Required for Coronavirus

On March 18, 20202, the Senate quickly approved the Families First Coronavirus Response Act following House passage a couple days ago. The President signed the bill overnight. While some details have yet to be ironed out, we do know that this Act included changes to support those affected by the coronavirus, either by being sick themselves, caring for someone who is sick or caring for a child home from school due to closures. Additionally, tax credits will be available to employers and employees to assist for related financial impact.

  • Private employers with fewer than 500 employees would be required to provide 15 days of paid sick leave.
  • Three months of paid family and medical leave to most employees. Although limitations may apply.
  • Only 2/3rds pay required to family and medical leave, whereas normal wages for paid sick leave.
  • Emergency Family and Medical Leave Act provides workers with two-thirds of their pay for up to another 10 weeks only if their children’s schools are closed.
  • Small businesses with fewer than 50 employees could apply for financial hardship waivers from the leave provisions affecting workers whose children’s schools have closed.

Tax Credits Summary

The Act includes several payroll credit provisions to assist employers and employees. These credits will apply against the 6.2% social security tax and claimed quarterly. Employer / taxpayers need to claim these credits in gross income to avoid double-dipping into the government coffers.

  • Self-employed Tax Credit will provide a credit against the self-employment tax for their sick leave equivalent amount.
  • Family Leave Credit will be available at $200 per day per employee while the employee is receiving paid family and medical leave, up to $10,000 aggregate in paid wages per employee.
  • Sick Leave Credit will provide a maximum of $511 per day per employee paid to employees who receive paid sick leave.

Congress and the Administration aim to quickly pass an economic stimulus aid package soon to address economic impact through measures such as providing direct payment checks to every adult (assuming meeting certain criteria). Be sure to subscribe to the Leavitt Group News website (see left!) to receive the latest news related to all things compliance, including breaking news during the Covid-19 or coronavirus environment. We are here to help be that guiding light to better understand how coronavirus will impact you, your business insurance and employees. Be safe!