President Trump signs Families First Coronavirus Response Act
Congress passed and President Trump signed the Families First Coronavirus Response Act (FCCRA) on March 18, 2020; it will become law 15 days after the signing. The bill provides paid sick leave, free coronavirus testing, expansion of food assistance and unemployment benefits, and requires employers to provide additional protections for health care workers. For employers and employees, it provides welcome assistance to dealing with the unprecedented effects of COVID-19 on the workforce and economy.
Under the FCCRA, companies with up to 500 employees are covered, there is no 50-person minimum (as with the Family Medical Leave Act), and some benefits are available to the self-employed. Companies with over 500 employees are not covered in the bill.
Six qualifying reasons exist for coverage under this bill related to COVID-19. The employee is covered if they are:
· Subject to federal, state or local quarantine or isolation
· Advised by a health care provider to self-quarantine
· Experiencing symptoms of COVID-19 and seeking diagnosis
· Caring for an individual subject to quarantine order or advised to self-quarantine
· Caring for their own children if the school or child care facility is unavailable as a result of COVID-19
· Experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and Department of Labor
Key to note in the above is that coronavirus does not need to be confirmed in the individual to receive the benefit. Orders to quarantine, signs of symptoms, or simply virus exposure qualifies. This prevents an overload on the health care system to achieve tests for qualification.
The bill itself provides benefits to employees and employers alike. For employees, here are the key points:
· While normally FMLA is unpaid, the FFCRA grants that employees who are sick and on leave are eligible for their full pay for up to two weeks (up to $511 per day, $5110 total)
· There is some relief for childcare that is not normally covered. If leave must be taken because of childcare or school closure, two-thirds of the employee’s regular rate of pay is available for up to 12 weeks (up to $200 per day, $10,000 total)
· The FFCRA prevents employers from mandating employees use vacation or sick time before receiving the benefit
· These benefits apply to part-time workers at the average rate they would work during the two-week period at the limits presented above
A 10-day waiting period does apply before the benefit can be used. Employees can use sick or vacation time to cover the waiting period.
For employers, the key points are:
· Tax credits are available for 100% of what is paid out to employees with the above noted limits – The credit is applied against the employer portion of taxes, better known as the Social Security tax.
· An exemption can be granted from the Secretary for Labor if an employer has fewer than 50 employees
· If an employer has fewer than 25 employees, they are not required to restore employees to previous positions
For self-employed individuals who also work for another employer (such as Lyft, Uber, caterers, events), a tax credit is available for up to two weeks of sick pay at their average rate and family leave pay at two-thirds the normal rate. The same caps apply, and these individuals must provide evidence of self-isolation recommendation or school/child care closure. The credit is applied against the individual’s income taxes, and any leave pay that is greater than their tax bill qualifies for a government rebate.
The sick leave benefits put in place are effective for coronavirus-related leave for the next 12 months.
Unemployment insurance benefits for state grants was also provided at an amount of $1 billion. Certain conditions apply. Half the provisions are allocated to provide immediate relief for state administrative costs that meet certain requirements, while the other half is reserved for emergency grants to states who experience a 10% or greater increase in claims above the same quarter last year.
The 15-day waiting period before the bill becomes law allows employers time to interpret the ramifications on their business. For assistance or questions, contact Dedekian, George, Small and Markarian at (559) 431-5500.