Sick and Family Leave and Your Business, the First Coronavirus Bill

President Trump signed the Families First Coronavirus Response Act (H.R. 6201) to provide immediate and fast relief to individuals and employers affected by the Corona Virus on On March 18, 2020. There has been a great deal of misinformation put out lately, but we read the text (unlike most of our members of Congress) to make sure you not only stay in compliance with the new law, but also maximize your benefits. This article will provide a summary of the major employer paid sick leave and family leave benefits, and what tax credits were created to offset this cost for business.

Do you Remember the TCJA, and all the confusion left in its wake? This is time congress rushed the bill through congress, and despite passing the bill, it still has a lot that we will need to see what implementation looks like. Here are a few key takeaways.

• While the legislation states that the effective date will be no later than April 3, 2020, it is still unclear if employers may have to pay benefits for covered events prior to that date.
• The Secretary of Labor has the right to exempt small businesses with fewer than 50 employees, as well as certain health care providers and emergency responders. Unfortunately, no information on whether this will happen, how to count employees, or how employers will get the exemption have been released as of time of publishing.

Paid Sick Time Under the Families First Coronavirus Response Act

Beginning on or before April 3, 2020, and continuing until December 31, 2020, employers (including government employers) with fewer than 500 employees must provide paid sick leave to any employees who are unable to work (or telecommute). Based on the language provided in the new legislation, 2 weeks of Paid sick leave must be paid as a result of a leave because of any of the following reasons:

• The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
• The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
• The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
• The employee is caring for an individual who is subject to governmental quarantine or isolation order or has been advised by a health care provider to self-quarantine.
• The employee is caring for his or her child, or if the child’s school or place of care has been closed or the child care provider is unavailable due to COVID-19 precautions.
• The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Paid Family Leave under Families First Coronavirus Response Act

Under the new congressional Act employers with fewer than 500 employees (including government employees) must provide up to 12 weeks of employer-paid family leave for any employee who has worked more than 30 days for that employer. An employee only qualifies if he or she is unable to work (or telework) because he or she needs to take care of his or her child, under 18 years of age, due to school or child care closures related to a COVID-19 emergency declared by a governmental authority.

This provision will allow employees to take time to take care of loved ones who are sick and minor children who are unable to go to school. However, this creates a large tax burden on the clients.

Credits for employers and the self-employed under Families First Coronavirus Response Act.

Employers paying paid sick leave, or paid family leave benefits, may claim a refundable credit against their FICA taxes for the gross amount of paid sick leave benefits and paid family leave benefits discussed above. It is indicated the credit will be taken on the quarterly return filed by business owners, Form 941, “Employer’s Quarterly Federal Tax Return”.

Similarly, those who are self-employed assistance is available as a credit against self-employment tax. This amount could be a huge help to small businesses owners who are now forced to not just work from home, but also need to care for a child or other loved one.

You can review the full text of the Families First Coronavirus Response Act. Which can be found here, www.congress.gov/bill/116th-congress/house-bill/6201

Here at The Weil Law Group, PA our mission is to help make our small business use the law to build a better business and reduce your tax burden. If you have any questions or need any help call 954-603-7603 or send an Email to CALLS@TheWeilLawGroup.com. And remember, The Weil Law Group is “Here to Help”

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