What to Expect From the Families First Coronavirus Response Act

As the coronavirus continues to spread across the United States, President Donald Trump signed into law H.R. 6201 – Families First Coronavirus Response Act on March 18, 2020 to provide assistance to individuals and employers affected by the novel coronavirus.  

While the bill discusses specific assistance to individuals including increased funding for nutritional assistance programs and funding to cover the costs of the COVID-19 diagnostic testing, there are several highpoints* that employers should be aware of:

  • Emergency Paid Sick Leave Act– Employers with fewer than 500 employees and government employers must provide two weeks of paid sick leave to employees, regardless of how long they have worked, affected by the coronavirus until December 31, 2020.
    • Employees who are quarantined, isolated, or seeking a diagnosis or preventative care for coronavirus will be paid at their regular rate for those two weeks with a cap of $511 per day.
    • Employees who are caring for family members with the same requirements listed in the bullet above or are caring for children who are affected by school closures or unavailable childcare will be paid at two-thirds their regular rate for those two weeks with a cap of $200 per day.
    • Full-time employees are entitled to two weeks (80 hours) and part-time employees are entitled to the typical number of hours they work in a two-week period.
    • Employers cannot require the employees to find someone to do their jobs while they are out.
    • Employers of healthcare providers or emergency responders may elect to exclude these employees from application of paid sick leave.
    • Employers with fewer than 50 employees may request exemption from the Secretary of Labor.
  • Emergency Family and Medical Leave Expansion Act– Employees of employers of fewer than 500 employees and government employees who have been on the job for at least 30 days will have the right to take up 12 weeks of job-protected leave to be used to care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a coronavirus.
    • These individuals will receive two-thirds of their pay capped at $200 a day and $10,000 in the aggregate.
    • The first 10 days of leave may consist of unpaid leave; however, employees may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for the first 10 days.
    • The Secretary of Labor has the authority to exclude certain healthcare providers and emergency responders from eligibility of paid leave.
    • The Secretary of Labor also has the authority to exempt employers of fewer than 50 employees from requirements of paid leave if the imposition of such requirements jeopardize the viability of the employer as a going concern.
  • Payroll Credit for Required Paid Sick Leave– The bill will provide a refundable tax credit equal to 100% of qualified paid sick leave wages paid by an employer for each calendar quarter. The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes). Qualified sick leave wages are wages required to be paid by the Emergency Paid Sick Leave Act and the following limits will apply: 
    • For amounts paid to employees directly affected by the coronavirus as referenced above, the amount of qualified sick leave wages taken into account for each employee is capped at $511 per day. 
    • For amounts paid to employees caring for a family member or for a child whose school or place of care has been closed, the amount of qualified sick leave wages taken into account for each employee is capped at $200 per day. 
    • The aggregate number of days taken into account per employee may not exceed the excess of 10 over the aggregate number of days taken into account for all preceding calendar quarters. 
    • If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.
  • Credit for Sick Leave for Certain Self-Employed Individuals– Self-employed individuals who are personally affected by the coronavirus will be eligible for the following credit amounts:
    • Self-employed individuals who must self-isolate, obtain a diagnosis or comply with a self-isolation recommendation concerning the coronavirus, will be eligible for a tax credit equal to 100% of a qualified sick leave equivalent amount capped at the lesser of $511 per day or the average daily self-employment income for the taxable year per day.
    • Eligible self-employed individuals caring for a family member or a child whose school or place of care has been closed due to coronavirus will be eligible for a refundable tax credit equal to 67% of a qualified sick leave equivalent amount, capped a the lesser of $200 per day or the average daily self-employment income for the taxable year per day. 
    • A self-employed individual must maintain documentation prescribed by the Secretary of the Treasury to establish his or her eligibility for the credit. 
  • Payroll Credit for Required Paid Family Leave– The tax credit is allowed against the tax imposed by section 3111(a) (the employer portion of Social Security taxes). Qualified family leave wages are wages required to be paid by the Emergency Family and Medical Leave Expansion Act. 
    • A refundable tax credit equal to 100 percent of qualified family leave wages paid by an employer for each calendar quarter is available. 
    • The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. 
    • If the credit exceeds the employer’s total liability under section 3111(a) for all employees for any calendar quarter, the excess credit is refundable to the employer.

Additional Relief:

Along with the assistance provided above, the U.S. Department of the Treasury has announced that there will be a 90-day extension past the original deadline of April 15 to file and pay taxes due. The extended deadline to file and pay will now be July 15 instead of April 15. Read our Q&A on how you could be impacted by the extension here

During this time of uncertainty, HORNE is committed to monitoring developments and proposed legislation to help our clients manage any potential impacts related to the coronavirus. If you have questions or concerns, please feel free to contact us

*All high points were sourced from H.R. 6201, FAMILIES FIRST CORONAVIRUS RESPONSE ACT Summary