30 Mar Resource Roundup – Families First Coronavirus Response
Congress recently passed the Families First Coronavirus Response Act. Here is a summary of provisions dealing with employee absences, especially the Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion Act. These are relevant to small business owners. As we mention in our last Resource Roundup on the CARES Act economic relief package, sustaining employee headcount correlates to dollar to dollar forgiveness on relief loans.
Emergency Paid Sick Leave Act:
The Act is effective April 2, 2020 and will remain in place until December 31, 2020. A poster will be distributed by the DOL that must be posted by the Employer.
Which Employers does it apply to? All employers with fewer than 500 employees are covered, although the DOL has authority to exempt employers with fewer than 50 employees if the requirement to provide leave would jeopardize the viability of the business as a going concern. It is unclear at this point how Employers will request an exemption.
Which Employees does it apply to? All full time and part time employees are immediately eligible. An employee qualifies when they cannot work or telework because one of the following: (i) they are subject to a quarantine or isolation order (federal, state, or local), (ii) they have been advised by a health care provider to self-quarantine, (iii) they are experiencing symptoms of coronavirus and is seeking a diagnosis, (iv) they are caring for a person subject to a quarantine or isolation order (federal, state, or local), (v) they are caring for a son or daughter whose school/daycare is closed, or (vi) they are experiencing any other substantially similar condition specified by the government.
Payment: the first 10 days are unpaid and can be used in conjunction with the first 10 days under the expanded FMLA employees may also use PTO. Employers cannot require employees to use PTO first. Full time employees are entitled to 80 hours of paid leave part time are entitled to be paid for the number of hours per day they worked on average during the prior two-week period. Leave due to quarantine order, medical advice to self-quarantine, or experiencing symptoms receive regular pay rate subject to a limit of $511 per day and $5,110 total. Leave for taking care of a person subject to quarantine order, caring for child, or any other substantially similar condition as specified by government receive 2/3 of regular pay subject to a limit of $200 per day and $2,000 total.
Emergency Family and Medical Leave Expansion Act:
The Act expands the coverage available under FMLA related to the coronavirus. It is effective April 2, 2020 and will remain in place until December 31, 2020. A poster will be distributed by the DOL that must be posted by the Employer
Which employers does it apply to? Employers covered by the Act is expanded from the FMLA and includes all employers with fewer than 500 employees. Small businesses with fewer than 50 employees may be exempt when compliance would jeopardize the viability of their business. It us unclear how an exemption may be obtained.
Which employees does it apply to? Employees are eligible for relief after working for at least 30 days. They may apply for leave when they are unable to work or telework due to the need to care for a child under the age of 18 or when the child’s school/daycare is closed due to coronavirus.
Payment: Initial 10 days are unpaid (but PTO can be used), after this the remainder is paid. May be used at the same time as Emergency Paid Sick Leave. After the 10 days, Employer pays 2/3 of regular rate multiplied by number of hours normally worked (look at prior 6 months to determine). Maximum of $200 per day and $10,000 total during leave, after maximum hit remaining up to 12 weeks total unpaid.
Returning to work: Employer required to return employee to work at the end of the leave, exception for employers with fewer than 25 employees if: position no longer exists because of the emergency and employer makes reasonable efforts to restore employee to an equivalent position.
Payroll Credit for Employers:
The Act allows Employers to receive a refundable tax credit equal to 100% of qualified paid sick leave wages paid by the employer for each calendar quarter. Credit may be increased by certain qualified health plan expenses that are allocable to wages paid under EPSLA. Employers may claim the credit to offset their obligation for the employer portion of social security taxes (6.2%) and their part of the hospital insurance portion (1.45%). The amount of the credit depends on the reason for the sick leave.
Credit for Sick Leave and Family Leave for Self- Employed Individuals:
Self-employed individuals are eligible for a refundable tax credit equal to 100% of the qualified sick leave equivalent amount for self-employed individuals subject to limitations above or 67% for care of a family member (used to offset self-employment tax and is refundable). Tax Credit equal to 100% of a qualified family leave equivalent amount for eligible self-employed individuals used to offset self-employment tax and is refundable.
Note: This is a summary of aggregated information from other parties and does not express the direct advice of Sam Goldenberg & Associates.