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The federal Families First Coronavirus Response Act (the "Coronavirus Response Act") passed by Congress is effective April 2, 2020 through December 31, 2020. The Coronavirus Response Act will require the following for employers with fewer than 500 employees:
- Paid Sick Leave ("PSL"):
- Up to 2 weeks of PSL to full-time employees if, related to COVID-19, the employee is: (1) required to quarantine; (2) advised to self-quarantine by a health care provider; (3) experiencing symptoms and seeking a medical diagnosis; (4) caring for an individual required to quarantine or advised to self-quarantine by a health care provider; (5) caring for a child due to school closure or unavailability of the child care provider; or (6) a substantially similar condition specified by the Secretary of HHS.
- PSL is available to all employees regardless of tenure. Employees who work part-time are entitled to paid time based on the average number of hours that the employee works over a 2-week period.
- Paid at 100% of the employee's regular rate capped per employee at $511 per day or $5,110 in the aggregate) if for reasons (1), (2) and (3) OR paid at 67% of regular rate if for reasons (4), (5) or (6) capped per employee at $200 per day or $2,000 in the aggregate.
- Paid Family Leave ("PFL"):
- Up to 12 additional weeks of job-protected leave to allow an employee, who cannot work or telework, to care for the employee's child if the school or place of child care, or the childcare provider, is unavailable due to the COVID-19 emergency. The first 10 days of PFL is unpaid (but an employee may elect to use accrued paid time-off or PSL for the first 10 days).
- Covers all employers with fewer than 500 employees (as opposed to requiring 50 employees within 75 miles under FMLA), and all employees who worked for such covered employers for at least 30 days (as opposed to 12 months under FMLA).
- Paid at 67% of the employee's regular rate (capped per employee at $200 per day and $10,000 in the aggregate).
- Employers with 25 or more employees remain subject to the same job protection requirements as under the FMLA, but employers with less than 25 employees are not subject to job protection requirements if an employee's position no longer exists due to economic conditions or other changes in operating conditions of the employer caused by the COVID-19 emergency and affecting employment (subject to the employer making reasonable attempts to return the employee to an equivalent position, including for up to one year following the leave).
- The Secretary of Labor can exclude certain healthcare providers and emergency responders and can exempt ERs with less than 50 EEs if the imposition of the requirements would jeopardize the viability of their business.
- Example: Employees who are eligible for and elect to take both PSL and PFL could get 2 weeks of PSL (which would run concurrently with the first 2 weeks of unpaid PFL) followed by 10 weeks of PFL, with pay in each case at 67% of the employee's regular rate, capped at $200 per day or $12,000 in the aggregate per employee.
- Payroll Tax Credit: Provides for an offsetting payroll tax credit against an employer's portion of payroll tax obligations.
- Payroll tax credit for employers ("Payroll Tax Credit") equal to (i) 100% of qualified PSL and PFL wages (subject to the above caps) that are paid by an employer for each calendar quarter, plus (ii) the costs to maintain health insurance coverage for the eligible employee during the leave period.
- Employers may retain the full amount of the Payroll Tax Credit from the payroll taxes that the employers are otherwise required to withhold and/or pay to the IRS—i.e., withheld federal income taxes, employee share of Social Security and Medicare taxes, and employer share of Social Security and Medicare taxes, in each case, with respect to all employees. If there are not sufficient payroll taxes to cover the Payroll Tax Credit, employers will be able file a request for an accelerated payment from the IRS for the difference. The IRS expects to process these requests in two (2) weeks or less.
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