With all the constant, fast-breaking news pertaining to COVID-19, you may not have heard that yesterday, President Trump signed the “phase two” stimulus legislation. The Families First Coronavirus Response Act (FFCRA) provides paid leave for certain workers, enhances unemployment insurance, and ensures free testing for infection by the Coronavirus. Unemployment eligibility requirements have been eased by waiving the work search requirements as well as the waiting week before benefits can be claimed. This measure also helps take care of small businesses (those with fewer than 500 employees) by providing reimbursement through tax credits for offering the qualified paid leaves.
Following his a very high overview of the paid leave benefits. For additional, detailed information, we encourage you to refer to the H.R. 6201 Act passed by Congress.
Paid Sick Leave
Employers must offer two weeks (i.e. 10 days) of paid sick leave for COVID-19-related reasons. The employer cannot require an employee to use accrued leave under an employer policy first. If the sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all of the employee’s wages up to a maximum benefit of $511 per day. If an employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day. The tax credit to the employer is 100% of the costs for providing the mandated leave and it taken against the employer’s portion of Social Security taxes.
Emergency Family and Medical Leave Act (FMLA)
Eligible employees (i.e. employees who have been on the employer payroll for a minimum of 30 calendar days) are entitled to take up to 12 weeks of FMLA leave for “a qualifying need related to a public health emergency.” This “qualifying need” is defined as situations in which an employee is unable to work (or telework) to care for a minor child if the child’s school or place of childcare has been closed or is unavailable due to a public health emergency. The first 10 days are unpaid, but the paid sick leave benefit can be applied. After the first 10 days, the benefit must replace at least two-thirds of the employee’s wages to a maximum of $200 per day. Like the Paid Sick Leave benefits, the tax credit to the employer is 100% of the costs for providing the mandated leave and is taken against the employer portion of Social Security taxes.
We just want to remind you that People Savvy HCM has the capability and flexibility to administer emergency time-off policies like these in addition to your regular time-off types, FMLA tracking, and necessary tax adjustments. Please let us know how our HCM software knowledge and experience can support you and your organization. In the meantime, as Congress works on a third relief package, we will continue to keep you updated.
Our thoughts remain with you and your families during this unprecedented time. Stay well and take care.