Updated 3/20/20 (3:30pm ET)

President Trump has signed a revised version of the Families First Coronavirus Response Act on March 19, 2020.  The main purpose of the bill is to provide immediate assistance for free testing and food security for seniors and children. From a small business owner perspective, the Act also extended paid sick leave to employees affected by the pandemic. The law will go into effect April 2, 2020.  It will last one year after the date the bill was signed into law. 

Here's what the Families First Coronavirus Response Act means for employers:

Emergency Paid Sick Leave

For employers with less than 500 employees, the employer must give emergency paid sick time to any employee who cannot work or telework, regardless of the length of employment, for emergencies related to coronavirus. The emergency paid sick leave is full pay up to 80 hours (part-time employees receive a pro-rate amount). The employer cannot require the employee to use existing paid leave prior to using the emergency sick leave, or penalties will occur. 

Employees under the emergency paid sick leave plan are:

• (i) an employee subject to a coronavirus quarantine or isolation order;
• (ii) an employee who has been advised by a health care provider to self-quarantine due to coronavirus concerns;
• (iii) an employee who is experiencing symptoms of coronavirus and is seeking a medical diagnosis;
• (iv) an employee caring for an individual described in (i) or (ii) above;
• (v) an employee caring for a child whose school or place of care is closed, or the child care provider of the child is unavailable, due to coronavirus precautions; or
• (vi) an employee who is experiencing any other substantially similar condition specified by HHS in consultation with the Treasury and Labor Departments.

If the employee falls into category (i), (ii), or (iii), the maximum paid per day is $ 511 and $ 5,110 in total.  If the employee falls into category (iv), (v), or (vi), then the maximum paid per day is $ 200 and $ 2,000 in total.

Employers will not be subject to the 6.2% social security payroll tax typically paid. 

While details are yet to emerge, employers with less than 50 employees are exempt from the paid leave requirements if the requirements jeopardize the viability of the business as a going concern.  This has yet to be defined. 

If the employer pays the employee on emergency paid sick leave, the bill provides a tax credit. The credit will be applied against payroll taxes and will be claimed on a quarterly basis, equal to 100% of the sick leave wages paid.  The credit is limited to 10 days per employee per quarter.  Employers must include the amount of credits received in their gross income to prevent double benefit.

Emergency Family Leave

Unlike the previous section, which has specific circumstances related to coronavirus, the bill also creates a new category of FMLA, which begins 15 days after the signing of the bill. Under the “Qualified need related to a public health emergency,” an employer must provide leave for employees responding to family members in circumstances included in the section above. 

The first 10 days of FMLA leave are unpaid, unless the employee uses a previously accrued vacation, personal, or sick leave.  The employer cannot require an employee to do so. For days of leave after the 10 days of unpaid leave, the employee will receive benefit equal to two-thirds of the regular pay for up to 12 weeks.  This is limited to $200 per day, up to $10,000. 

There is also a tax credit for payments of leave under the Emergency Family Leave portion.  It is up to $ 200 per employee per day and $ 10,000 in the total for all calendar quarters. 

Just like any law, particularly one passed in a quick time-frame, there are other details and restrictions that will be parsed out over the next couple weeks. From a practical perspective, it is recommended that agency owners begin to document the reasons for any medical leave and be detailed in tracking payments on that leave. The credit is calculated quarterly, so the company’s payroll provider or HR department would need to notified quickly. The first quarter payroll reports are filed in April and we anticipate those credits being able to be claimed in April. 

*   Employers with less than 50 employees can claim exemption if paying would cause inability to continue business

$  It is presumed that individuals receive Emergency Family Leave after the Emergency Paid Sick Leave is completed