Sick leave for Coronavirus explained – March 18, 2020

The Families First Act (H.R. 6201) was signed into law this Wednesday March 18th. Here’s what it means for you and your employees.

Quarterly payroll tax credit

Employers will be able to claim a new quarterly payroll tax credit intended to fund paid sick leave if it is used for certain purposes — that is, for employees who are unable to work or telework because of the Coronavirus.

The credit will cover 100% of the sick leave wages paid to employees who are under self-quarantine or getting tested for the Coronavirus, with a maximum wage of $511 per day. For employees caring for a family member affected by the Coronavirus, the credit covers up to $200 a day.

The Act also covers:

  • Expanded food assistance and unemployment benefits through supplemental appropriations for health programs. If a school is closed for at least five consecutive days, each household with an eligible child can receive assistance under a state agency plan.
  • Expanded unemployment benefits through larger federal grants to the states to process and pay claims.
  • Healthcare plans, including high deductible health plans, to provide for COVID-19 testing at no cost to the insured.
  • A requirement that employers with 500 or fewer employees and government employers provide Emergency Paid Sick Leave to employees due to any of the following reasons:
  1. To quarantine because the employee is diagnosed with coronavirus;
  2. To seek a diagnosis or preventive care for coronavirus;
  3. To comply with a recommendation or order by a public official with jurisdiction or healthcare provider on the basis that the physical presence of the employee would jeopardize the health of others due to exposure of the employee to coronavirus or exhibition of symptoms by the employee; or
  4. To care for a family member for such purposes or to care for a child whose school has closed, or child care provider is unavailable, due to the coronavirus.

Emergency Family and Medical Leave

Employers with 500 or fewer employees and government employers must provide up to 12 weeks of job-protected Emergency Family and Medical Leave for a “qualifying need related to a public health emergency.” There technical definitions which you should know about also. Just ask if you have a question.

Paid Sick Leave and Paid Family and Medical Leave

The law funds the Paid Sick Leave and Paid Family and Medical Leave for employers (including tax-exempt employers) through a refundable credit against payroll taxes. Self-employed taxpayers can receive a benefit through a refundable credit against income taxes for periods during which work cannot be done.

If you have any questions about this, please do not hesitate to reach out to us. We want to work with you to navigate the changes this virus creates.

We wish you all good health in the coming months.

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