News & Resources

Families First Coronavirus Relief Act Signed Into Law

• March 28, 2020 update

• March 23, 2020 update

March 18, 2020

• Emergency Family and Medical Leave Expansion Act

• Emergency Paid Sick Leave Act

• Employer Tax Credits for Paid Family Leave

Update (Dated 03/28/2020):

Update on Families First Coronavirus Response Act FMLA Provisions

The Department of Labor has issued a Q & A on the provisions of the Families First Coronavirus Response Act to help employers better understand the leave requirements of the new law. These provisions take effect on April 2, 2020 and extend through December 31, 2020. The Q & A can be found here.

You can also read more about the FMLA provisions for the Families First Coronavirus Response Act in our previous client alerts below.

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Update (Dated 03/23/2020):

On Friday, March 20, the IRS released additional details regarding the new Emergency Paid Sick Leave Act and the new Emergency Family and Medical Leave Expansion Act. See IRS article here.

The news release provides more details on how the tax credits to be provided to the employer under these Acts will be paid. Specifically, the employer will be allowed to retain amounts it otherwise would have paid in payroll tax deposits to the IRS (federal withholding, Social Security taxes, Medicare taxes) up to the amount the business can claim as a tax credit under these Acts. If the amount of the credit due to the employer is in excess of the total tax deposit, the IRS will be providing a form to be used to claim a prompt refund. More details on this new form are to be provided this week.

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Previous Update (Dated 03/18/2020):

On Wednesday, March 18, 2020, President Trump signed into law the “Families First Coronavirus Response Act (H.R. 6201),” which represents the second phase of aid to individual citizens and businesses as the impact of the coronavirus is felt across the nation.

The first phase of aid was an $8 billion coronavirus response package, which allowed for additional testing of the virus as well as lower costs for medical treatments. H.R. 6201 provides relief for individuals impacted by the virus in the form of paid family leave along with tax credits for employers. Additionally, it includes provisions for expansions in unemployment insurance and guarantees for free coronavirus diagnostic testing, among other provisions.

Provisions of interest to business owners include an expansion of paid sick leave and Family Medical Leave Act (“FMLA”) benefits to employees impacted by COVID-19, and the creation of tax credits for businesses required to provide these new benefits.

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Emergency Family and Medical Leave Expansion Act

The Family and Medical Leave Act has been temporarily expanded to include those who are unable to work due to a need for leave to care for a child under the age of 18 if that child’s school or place of care has been closed, or the child care provider of the child is unavailable, due to COVID-19. It should be noted that an employee taking leave for the employee’s own serious health condition (which would include COVID-19 to the extent the employee requires hospitalization or ongoing treatment that would cause the illness to be a serious health condition) or that of an immediate family member is already protected under FMLA.

The initial 10 days of this expanded leave can be unpaid, but after that initial 10-pay period, employers must pay the employee at an amount of not less than two-thirds of the employee’s regular rate of pay for the number of hours the employee would normally be scheduled to work, up to a maximum of $200 per day and $10,000 in aggregate. This would generally apply to all employers with fewer than 500 employees.

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Emergency Paid Sick Leave Act

Employers with fewer than 500 employees will be required to provide 80 hours of paid leave for full-time employees and an average number of hours worked for a part-time employee, to the extent that employee is unable to work (or telework) due to one of the following situations.

1. To self-isolate or quarantine due to a federal, state, or local quarantine or isolation order related to COVID-19.
2. To quarantine due to COVID-19 concerns on the advice of a health care provider.
3. To obtain a medical diagnosis or care if the employee has COVID-19 symptoms.
4. To care for someone (not limited to family) experiencing one of the first two situations listed.
5. To care for the employee’s son or daughter if the school or place of care has been closed, or the child care provider is unavailable, due to COVID-19 (the Secretary of Labor could exempt businesses with fewer than 50 employees from this requirement if it would jeopardize the viability of a business as a going concern).
6. The employee is experiencing another substantially similar condition to those above if specified by the Secretary of Health and Human Services in consultation with the Secretaries of Labor and the Treasury.

For employees in categories (1), (2), and (3), the maximum paid sick time shall not exceed $511 per day and $5,110 in the aggregate. For employees in categories (4), (5), and (6), the maximum paid sick time shall not exceed $200 per day and $2,000 in the aggregate.

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Employer Tax Credits for Paid Family Leave

Employers providing paid sick and family medical leave under the terms described above may apply quarterly for a 100% refundable tax credit against payroll taxes, equal to the amount of wages required to be paid out under the FMLA expansion or the emergency sick leave act. Thus, in the aggregate, an employer might claim up to $15,110 in credit for a single employee for qualified leave wages.

Congress will now move on to the third phase of the aid package, which could include more than $1 trillion dollars and include direct payments to individuals affected by loss of wages due to the virus, as well as potential relief for those businesses and industries hit hard by COVID-19. Members of Congress have stated they will not leave Washington, D.C. until the third phase is passed.

As legislative changes continue to develop over the coming days, WK will continue to communicate via email and our website. Thank you for continuing to put your trust in us, and please contact your WK advisor if you have any questions about how these changes affect you or your business.

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Posted By Jeremy Morris, CPA on 3-28-2020 | Topics: Articles, Business Resources, Featured News & Resources, News, Resources,

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