Over the weekend the House of Representatives passed the “Families First Coronavirus Response Act.” This legislation is designed to protect families and workers hit by the spreading coronavirus. Included in the package were several provisions that will impact HARDI member businesses, including requirements to offer expanded paid sick leave and extended medical leave and tax credits to pay for the required time off.
Under this legislation, all employers with fewer than 500 employees, starting 15 days after the legislation becomes law, must offer:
Paid Sick Leave:
- Full-time employees can take up to 112 hours (equivalent to 14 8-hour days) paid sick leave for coronavirus related time off including self-quarantine and doctors’ visits.
- Part-time workers are entitled to the average number of hours worked over a 2-week period.
- All time off up to the up to these limits must be paid at full compensation.
- This sick leave is in addition to any already offered sick leave, and use of existing sick leave does not reduce the maximum number of hours of new paid sick leave.
- Employers must post information about this new sick leave policy.
- No employee can be laid off or discriminated against for using this paid sick leave.
- Coronavirus sick leave will be required through the end of 2020.
Paid Family Medical Leave
- Employees can receive up to 12 weeks of job-protected paid medical leave, of which the first 14 days is unpaid (but covered by the previous paid sick leave provision)
- Employees must have been employed for at least 30 calendar days.
- Employees may use the leave to respond to quarantine requirements or recommendations, to care for family members who are responding to quarantine requirements or recommendations, and to care for a child whose school has been closed as a result of the coronavirus pandemic.
- After the first 14 days, employers must compensate employees at least 2/3 of their regular wages for up to 12 weeks.
To help offset the increased costs of providing this paid sick leave and family medical leave, employers can deduct the cost from payroll taxes.
- Employers can deduct the cost of coronavirus related sick leave from the employer portion of Social Security taxes.
- Employers can deduct up to $511 per day per employee that is sick, and up to $200 per day for employees caring for someone else.
- The deduction is capped at 10 days of coronavirus sick leave.
- If the total deduction is greater than the total payroll taxes owed, the remaining portion is available to the employer as a refundable credit.
- For employees taking family medical leave, the deduction is capped at $200 per day up to $10,000 per year.
- The family medical leave deduction is also refundable if the total deduction exceeds the tax liability.
Lastly, the House bill added new policies for states implementing unemployment insurance:
- Employers must provide information to laid-off employees on eligibility for unemployment insurance.
- Allows states to increase UI taxes on high-layoff employers.
- Provide states with technical assistance for programs offered to employers that reduce hours instead of lay off workers.
This bill has only passed the House so far and is awaiting technical corrections before heading to the Senate for passage, depending on how members react to the technical corrections the bill could pass as early as this week or be delayed until next week.
As always, stay tuned to our COVID-19 Resource Page for support.