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Posted on: 3/25/20
H.R.6201 - Families First Coronavirus Response Act
On March 18, 2020, President Trump signed into law The Families First Coronavirus Response Act. This new law will take effect on April 2, 2020. Below are some key provisions to consider:
Emergency Family and Medical Leave Expansion Act (Public Health Emergency Leave)
The FMLA law was expanded to cover employers with fewer than 500 employees as well as all public sector employers. This allows employees of covered employers up to 12 weeks of job protective leave if they are unable to work or telework due to caring for a child whose school/childcare is closed due to a COVID-19 emergency. Eligible employees must have been employed for at least 30 calendar days.
Payment is effective after the first 10 days of the leave. Employees may use Emergency Paid Sick Leave, PTO, or take the first 10 days unpaid. The rate of payment must be at least 2/3 of the employee’s usual pay rate capping at $200/day or $10,000 total benefit. This leave excludes health care providers and emergency responders.
Under this law, employers must reinstate employees to their prior or equivalent position upon their return from leave. An employer with less than 25 employees may not be obligated to reinstate an employee at the end of their leave if the position is eliminated due to economic downturn or a change in the operating conditions due to COVID-19. The Secretary of Labor may exempt employers with less than 50 employees from the requirements of this law if the obligation of such would jeopardize the continuity of the business. Employees should expect no retaliation for taking leave. This leave expansion takes effect on April 2, 2020 and expires December 31, 2020.
Emergency Paid Sick Leave Act
This act also covers employers with fewer than 500 employees as well as public sector employers, there is no length of service requirement. Employees who fit the following situations qualify for paid sick leave:
Covered employers must provide paid sick leave at the employee’s regular pay rate. Full-time employees are entitled to 2 weeks or 80 hours of sick pay. Part-time employees are entitled to the typical number of hours they usually work in a two-week period. Paid sick leave must be paid at the employee's regular rate of pay, or minimum wage, whichever is greater, for leave taken for reasons 1-3 above. An employee taking leave for reasons 4-6 may be compensated at two-thirds of his or her regular rate of pay, or minimum wage, whichever is greater. This paid leave requirement is in addition to an employer’s current leave policies. Leave under this law takes effect on 4/2/2020 and expires 12/31/2020, it will not carry over to the following year. An employer may not retaliate- discharge, discipline or terminate an employee who takes part of this Act.
No Cost-sharing for COVID-19 Insured Plans, this includes deductibles, copayments and coinsurance. Comprehensive coverage on testing and associated treatment must be provided. A plan cannot impose restrictions on where the treatment or testing is provided.
Employer Tax Credits- Payroll Credit for Required Sick Leave
An employer is allowed tax credit for each calendar quarter an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such calendar quarter. For Emergency Family and Medical Leave Expansion Act, the amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. In terms of the Emergency Paid Sick Leave Act, the tax credit can be for up to 10 days of paid leave per employee in the amount of up to $200 per day for employees on paid leave due to caring for an ill family member or school closure or up to $511 per day for amounts paid for any of the other situations resulting in the benefit being paid. This credit may include some costs associated with group health plans.
Employers pay the paid leave and can take an immediate tax credit by retaining the amount of payroll taxes equal to the amount of qualifying sick and childcare leave that they paid instead of depositing them with the IRS.
If you have questions or would like additional information, contact your Marvin and Company, P.C. representative.