March 18, 2020 5:06pm
(Updated) The Families First Coronavirus Response Act: What Employers need to know
UPDATE: President Trump has signed the Families First Coronavirus Response Act into law. It goes into effect on April 2, 2020. See also: White House proposes $1 trillion stimulus response to the COVID-19 pandemic and U.S. Senate unveils Coronavirus stimulus response package.
Congress and the White House are currently working through a legislative response to the COVID-19 pandemic, which is affecting both public health and the American economy. On March 14, the House of Representatives passed the H.R. 6201: The Families First Coronavirus Response Act by a vote of 363 to 40. President Trump voiced support for the bill. The Senate approved H.R. 6201 on March 18 by a vote of 90-8, sending the bill to the White House for signature. President Trump signed the bill on March 18.
This legislation follows Congressional approval and President Trump’s signature of an $8.3 billion stimulus package from March 6 to fund the development of a COVID-19 vaccine and support state and local governments. A third phase of response is expected soon.
The Families First Coronavirus Response Act is highly relevant to the business community and will have a direct impact on employers in greater Louisville. It focuses heavily on addressing access to COVID-19 testing and the problem of individuals being unable to work due to direct and indirect causes associated with the pandemic.
GLI will be continually updating members as the bill progresses through the legislative process.
Here are the key highlights from The Families First Coronavirus Response Act most relevant to the business community. A full and official 10-page of the bill is available here.
Paid Sick Leave and Paid Leave
- The bill would require businesses with 500 employees or less to provide two weeks of paid sick leave at the employee’s full wages and 10 weeks of paid leave at 2/3 of the employee’s full wages in addition to two weeks of unpaid leave.
- The following caps are applied to paid sick leave: $200 per day and $2,000 total per employee for individuals caring for a child or family member; $511 per day and a total of $5,110 total for individuals caring for themselves.
- Paid leave is capped at $200 per day and $10,000 in total.
- Leave would apply to any absences that occur between April 2, 2020 and December 31, 2020 – which is the sunset date for this section of the bill.
- These provision would apply to employees who have been with their company for at least 30 days.
- Part-time employees are covered under the paid sick leave provisions, but they are to be paid in relation to the average number of hours they generally work in a week.
- Workers eligible for paid sick leave or paid leave under this bill must have been affected by Covid-19 (for example, if they test positive for the virus; are required to be in quarantine; or have children out of school because their school or daycare was closed).
- For employers who already offer paid sick leave and paid leave benefits, the provisions under this legislation will be in addition to those preexisting benefits.
- Exemptions: T he legislation includes an exemption possibility from providing 10 weeks of paid leave and paid sick leave for businesses with less than 50 employees. The businesses would need to petition the Labor Department. Businesses with less than 25 employees are exempt from paid leave if the position is eliminated as a result of the economic conditions brought on by the pandemic.
- How the bill is paid for: The bill provides for refundable tax credits intended to cover the costs of providing sick leave and paid leave by employers. The credit would be applied against the employer’s portion of an employee’s Social Security taxes.
- The bill provides tax credits against income taxes for self-employed individuals who are required to self-quarantine or care for a family member or child.
- Businesses should begin preparing to implement these sections of the bill quickly. These provisions go into effect on April 2, 2020.
- The bill establishes $1 billion in emergency grants to states to assist in paying unemployment benefits. To receive some of these grants, states will need to ease eligibility requirements such as work search requirements or waiting periods.
- The bill would seek to ensure that COVID-19 testing would come at no cost to individuals. Employers in the health care sector are strongly encouraged to review sections 6001 through 6010 of the bill – see pages 6-7 of the official summary.