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Provisions to protect American workers and assist employers in providing emergency paid sick leave

Thanks to my awesome insurance agent, Mitch Michener of Kennedy Michener Benefits, LLC, I can share this information with you. Between tax season still in full swing and going remote, we can use all the help we can get staying current with the constantly changing landscape of life as we know it for the moment.

Yesterday the Senate passed the Families First Coronavirus Response Act, and President Trump signed the bill into law. The Act includes several provisions to protect American workers and assist employers in providing emergency paid sick leave, as well as paid family leave in the case of school closures, for working families impacted by COVID-19.

This is a big change from current practices for most employers. Many details will need to be explained quickly at the Federal level as to how employers can actually implement these new requirements. KMB will do everything we can to keep you informed as information becomes available.

The FFCRA requires employers with up to 500 employees to provide paid sick leave and paid family leave while providing a refundable payroll tax credit to employers to cover 100% of the cost of wages.

There is also a refundable income tax credit made available for self-employed individuals. Employers with less than 50 employees must apply for a hardship exemption in order to qualify.

Employers must offer two weeks (10 days) of paid sick leave for COVID-19-related reasons (existing leave offered can count toward the 10 days). If the sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all of the employee’s wages up to a maximum benefit of $511 per day. If an employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day. The paid sick leave credit offsets 100% of employer costs for providing mandated paid sick leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.

Employers must offer 12 weeks of paid family leave for employees who have been employed for at least 30 days with a minor child in the event of the closure of the child’s school or place of care. The first 10 days are unpaid, but the employee can overlap this with the 10 days of paid sick leave. This benefit must replace at least two-thirds of the employee’s wages up to a maximum of $200 per day. The paid family leave credit offsets 100% of employer costs for providing mandated paid family leave. The credit also offsets, uncapped, the employer contribution for health insurance premiums for the employee for the period of leave.

Under FFCRA, self-employed individuals are provided similar credits

Under FFCRA, self-employed individuals are provided similar credits as refundable income tax credits in an amount of what self-employed workers would have received if they had been an employee receiving paid leave benefits pursuant to the mandates. For a given day that a self-employed worker could not work, they can claim a “rough justice” tax credit in the amount of their average daily self-employment income for the year.

This action taken by Congress follows several pieces of emergency guidance released. We are expecting more action from Congress and the Administration to address other aspects of the coronavirus pandemic.

Stay Healthy and Safe.

 
  Coronavirus Bill Requiring Paid Employee Leave Signed Into LawOn March 18, 2020, President Trump signed into law a coronavirus relief bill requiring employers to provide paid leave for reasons related to COVID-19, among other provisions. This Legal Update summarizes the law.Download now 
 
  Congress Passes Coronavirus Law Requiring Paid Employee Leave – VideoOn March 18, 2020, a coronavirus relief law was enacted that includes two types of paid employee leave: sick leave and expanded FMLA leave. This Legal Update video explains further.

Post Author: Tricia O'Connor CPA MBA