Congress passed PL 116-127 (Families First Coronavirus Response Act) on March 18, and it changes some leave policies for employers and employees as a result of the COVID-19 outbreak. This provision is in effect from April 2 until December 31 of this year.
Of course, it’s complicated and confusing, but here is the really broad overview of the provisions. (Here is the complete bill. At the bottom of this article is a PDF document of its major provisions.)
New Provisions for Employers
First, there are two new provisions for employers: an expansion of the Family Leave and Medical Act and the Emergency Paid Sick Leave Act. Both are mandatory for all employers under 500 employees. If you remember, FMLA previously only applied to employers over 50 employees.
Emergency Paid Sick Leave requires 80 hours of paid leave for workers taking off because of COVID-19, and that includes caring for others that are sick and caring for children because of closed school or daycare. The employees do not have to use any existing accrued paid leave first.
This emergency leave will not be available after 12/31/2020. The benefit should be their current salary, not to exceed either $511 or $200 per day, depending on why they require the leave.
The expanded Family Leave and Medical Act requires 12 weeks of paid leave for employees taking time off related to COVID-19. This compensation should equal two-thirds of the employee’s regular rate and should not exceed $200 a day.
Here is the great part. Employers can take a credit against payroll taxes for 100% of the employee’s compensation plus a prorated share of any health care insurance costs during the time of leave. If your payroll provider can handle it, you may be able to subtract the credit from your payroll deposit. If not, you will be able to claim the credit when you file your quarterly 941 payroll tax return. The excess claimed above the employer’s share of Social Security is refundable.
The bill also created the Emergency Unemployment Insurance Stabilization and Access Act of 2020, which allocates $1,000,000,000 for states to pay unemployment claims. The ultimate effect of that funding is not yet known as it will be administered by each state’s workforce commission. However, Congress is mandating that in order to receive the maximum amount of funds, states need to waive work search requirements, eliminate the waiting week, and stop charging employers directly that are impacted by the illness of public health directive.
More employer / employee relief will be coming in the next few days as Congress debates the newest stimulus package. I’ll be sure to give you an outline of those provisions when it passes.
There’s Nothing Like the Sight of a Well-Formatted Table In the Morning
Here is a PDF document that gives more details on each provision and what it requires of the employer and employee.
What? A New Poster? For Me?
Updated: The Department of Labor just released the poster to notify employees of this new benefit. Download and post in a conspicuous place. Oh wait, you aren’t in the office. Okay, just email everyone.
Don’t miss my previous post on conserving cash and assisting your employees during this tumultuous time.