Paid leave under the Families First Coronavirus Response Act
On March 18, 2020, President Donald Trump signed into law the Families First Coronavirus Response Act which provided paid leave for individuals affected by the coronavirus. This act applies to small and mid-size businesses with fewer than 500 employees. There are three categories of employees who qualify for these benefits, an individual who is unable to work or telework due to a need to leave because the individual: (1) needs to be tested or is quarantined for coronavirus, (2) is caring for an individual affected by coronavirus, and (3) is caring for a child while schools, daycares, and other child care providers are closed. The employee must have been employed by their employer for at least 30 days before claiming these benefits.
Businesses that provide paid sick leave to their employees under this act will be reimbursed in full within three (3) months through a payroll tax credit. A small business of 50 or fewer employees may be exempt from providing these benefits if doing so will cause material financial harm to the business. An example of material financial harm is if the business would need to file for bankruptcy after paying these benefits to its employees.
These benefits are available through December 31, 2020.
Paid Sick Leave to be Tested or Quarantined for Coronavirus
Although an employee with a positive COVID-19 test result will qualify under this category, an individual in this category does not require an official COVID-19 diagnosis. Testing is still very limited in the United States and it would be an undue burden for all individuals to be tested before receiving this benefit. An individual in self-quarantine due to experiences of coronavirus-like symptoms will qualify under this category. The maximum amount of paid time off is two (2) weeks. This is currently the recommended self-quarantine period. Employees who experience coronavirus-like symptoms and suspect they may have contracted COVID-19 are incentivized to stay at home and self-quarantine to slow the spread of the ever-rapid coronavirus. The federal government has taken these steps in efforts to flatten the coronavirus curve and reduce the pressures on the already strained health-care system. The maximum sick leave paid under this category is $511 per day for two (2) weeks, an aggregate of $5,110.
Paid Leave to Care for Individual in First Category
Employees may take leave to care for an individual who is experiencing symptoms of COVID-19 and is in self-quarantine. As the coronavirus is highly contagious and known to spread through extended close contact with an infected person, it is in the best interest of the entire population for family members of suspected COVID-19 patients to stay in quarantine with the infected person and to care for the infected member. The maximum paid time off under this category is $200 per day for two (2) weeks, an aggregate of $2,000.
Paid Leave to Care for Child
Employees taking leave to care for their child due to school and daycare closures, or unavailability of child care providers will be paid two-thirds (2/3) their regular salary. The maximum paid time off under this category is $200 per day for twelve (12) weeks, an aggregate of $12,000.
Additional Information for Employers
Employers will be reimbursed for all paid leave of qualifying employees through payroll tax credits. Tax credits also extend to amounts paid or incurred to maintain health insurance coverage. Freelancers and self-employed individuals will qualify for tax credits under this act as well.
Employers may not discharge, discipline, or otherwise discriminate against any employee who elects to take time off under this act.Employers in violations of the paid sick leave will be subject to penalties under the Fair Labor Standards Act.A temporary period of non-enforcement is effect for the first thirty (30) days after the act takes effect, so long as the employer has acted reasonably and in good faith in compliance with the act. Good faith exists where violations are remedied and employee is made whole as early as feasible
This publication is issued by Simon Meyrowitz & Meyrowitz, P.C. for informational purposes only and does not constitute legal advice or establish an attorney-client relationship. To ensure compliance with requirements imposed by the IRS, we inform you that unless specifically indicated otherwise, any tax advice contained in this publication was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any tax-related matter addressed herein. In some jurisdictions, this publication may be considered attorney advertising.