Coronavirus Emergency Relief Act for Employers and Families March 20, 2020 The Families First Coronavirus Response Act (H.R. 6201), enacted on Wednesday, March 18, 2020, provides a comprehensive financial aid package. This is the second package from Congress dealing with the Coronavirus outbreak. Congress and the Administration are now working on “phase three” to further stem the impact of the outbreak on families and the economy. The legislation guarantees the following: Free coronavirus testing Paid sick, family and medical leave Enhanced unemployment insurance Expanded food security initiatives Increased Federal Medicaid funding WHAT THIS MEANS FOR YOU: Now that the bill is signed into law, here are some key provisions set to take effect by April 2nd. Tax Credits To help employers pay for these requirements, the law provides: A refundable payroll tax credit for 100 percent of qualified paid sick leave wages paid by an employer, which is permitted against the employer portion of Social Security taxes. A refundable tax credit for 100 percent of qualified family leave wages paid by an employer, which is allowed against the employer portion of Social Security taxes. For the self-employed, the law provides: A refundable tax credit for 100 percent of qualified sick leave wages for individuals in quarantine for coronavirus, or for 67 percent of qualified wages when caring for a quarantined family member or child whose school or place of care was closed because of coronavirus. This tax credit is allowed against income taxes. A refundable tax credit for family leave for self-employed individuals equal to 100 percent of qualified family leave wages. Emergency Paid Sick Leave Act (EPSLA) Employers with 500 or fewer employees and government employers are required to provide Emergency Paid Sick Leave to employees due to any of the following reasons: To quarantine because the employee is diagnosed with coronavirus; To seek a diagnosis or preventive care for coronavirus; To comply with a recommendation or order by a public official with jurisdiction or healthcare provider on the basis that the physical presence of the employee would jeopardize the health of others due to exposure of the employee to coronavirus or exhibition of symptoms by the employee; or To care for a family member for such purposes or to care for a child whose school has closed, or child care provider is unavailable, due to the coronavirus. Full-time employees are entitled to 10 days of sick leave and part-time employees are entitled to the typical number of hours that they work in a typical two-week period, paid at two-thirds of the employee’s regular rate. The sick leave amount is calculated based on the employee’s “required compensation” (i.e., the largest of (i) regular rate of pay, (ii) federal minimum wage, or (iii) local minimum wage) multiplied by the number of hours normally scheduled to work, but capped at (i) $511 per day ($5,110 in total) for those described above in items 1-3; and (ii) $200 per day ($2,000 in total) for other employees Emergency Family and Medical Leave Expansion Act (EFMLEA) EFMLEA affects employers with fewer than 500 employees. Eligible employees are full- and part-time employees that have been with the company for at least 30 days. Note that the qualifying length of time is much faster than traditional FMLA. Eligible employees may take EFMLEA for up to 12 weeks if they have a qualifying need related to a public health emergency. A qualifying need is limited to situations where an employee is unable to work (either at a physical location or telecommute) because they are needed to care for a child whose school or place of care has been closed due to a public health emergency. Similar to FMLA, the first 10 days of EFMLEA can be unpaid or can be covered by some other type of leave, including the emergency paid sick leave discussed above, accrued PTO, or some other type of compensated leave. The successive days off can be paid out at two-thirds the employee’s regular rate at the number of hours usually worked by that employee. The amount of pay is capped at $200/day or a total maximum of $10,000 for the full 10 weeks. Similar to traditional FMLA, job protection applies for the employee. This means that employers must restore the returning employee to their same position, or an equivalent position, prior to taking EFMLEA. Further, all other facets of traditional FMLA apply. This legislation will impact businesses and individuals differently. For now, it is highly recommended to maintain detailed documentation of the time spent by employees for virus testing, medical care, school closures, and relevant information of affected family members, while also protecting the privacy of your employees. It is recommended that employers develop an internal mechanism via intranet, separate email, or a time–keeping system to track the time employees are absent for reasons related to coronavirus. If you have questions or concerns on how this may impact your situation, please contact your KatzAbosch representative, or contact us by clicking here. About KatzAbosch: Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. As an accounting firm, our mission is to provide the highest quality accounting, tax, financial and management consulting services to our regional clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. KatzAbosch is consistently named a Best Accounting Firm to Work For in Accounting Today and has been named a Top 200 Accounting Firms in the Nation by Inside Public Accounting. Our firm is also ranked among the Top 15 Largest Accounting Firms in the Baltimore Area by the Baltimore Business Journal and a Top Workplace four times by The Baltimore Sun.