Paid Sick and FMLA Leave under the Families First Coronavirus Response Act and How Employers Can Recover the Cost

Sick Leave Coronavirus

This is an article published by MBAF On Sick Leave.  CPA's

The Families First Coronavirus Response Act (FFCRA or Act) was signed into law by President Trump on March 18, 2020. The new legislation addresses the growing health and economic crises and includes provisions for paid sick leave, paid family leave and refundable payroll tax credits for employers. The law allocates roughly $8 billion for coronavirus prevention, preparation and response efforts.

The Act requires employers with less than 500 employees to provide 10 days of paid sick leave plus paid FMLA leave for COVID-19 related reasons.  FFCRA is expected to be in effect on April 2, 2020 through December 31, 2020, and employers must wait until the effective date to extend the new benefits to their employees in order claim the tax credits.

Here is what you need to know about what the Act includes:

Emergency Paid Sick Leave

Self-Care – For employees subject to quarantine, self-isolation or experiencing symptoms of COVID–19 and seeking a medical diagnosis. This leave is paid at the employees regular pay rate capped at $511 per day.

Family Care- For employees that have to care for someone subject to quarantine due to COVID-19 or to care for employee’s child if school or daycare provider is not available due to COVID-19. This leave is available to care for any individual subject to a quarantine or isolation order. This leave is paid at two-thirds of employees regular pay rate and capped at $200 per day.

Emergency FMLA Expansion

The FFCRA contains the “Emergency Family and Medical Leave Expansion Act” which amends the FMLA and creates a new category of public health emergency leave related to COVID- 19.

An employee is eligible for this leave if they are unable to work because of a need to care for their child whose school or daycare is unavailable due to COVID-19. Employees may take up to 12 weeks of leave for this purpose (the first two weeks fall under the Paid Sick Leave).  This leave is paid at two-thirds of their regular rate of pay and is capped at $200 per day with a maximum of $10,000.

Payroll Tax Credits

Employers will receive a payroll tax credit equal to 100 percent of the cost of providing these benefits. In total, an employer may claim a credit of up to $15,110 for qualified leave wages paid to an employee. For the self-employed there will be a federal income tax credit.

Details of how to claim the credit should be issued by The Treasury Department before the end of March.

Small businesses, with fewer than 50 employees, may qualify for an exemption from the paid leave requirements if it would jeopardize the viability of the business as a going concern.  Additional guidance is pending from the Department of Labor.