The Families First Coronavirus Response Act was passed last week with an effective date of April 2. The situation remains fluid; the provisions are coming at us quickly and can be confusing. We are providing this summary to help you understand the general provisions of the Act. If you have specific questions about whether and how the Act applies to you, please do not hesitate to reach out for more information.
1) FMLA Expansion
The Act expands the Family Medical Leave Act by providing up to twelve weeks of job-protected leave – applicable to employers with fewer than 500 employees – for employees who have been employed for at least 30 calendar days. The leave now applies to employees caring for a child under 18 years old if the child’s school or place of care is unavailable due to the coronavirus. Employers are not required to pay for the first ten days of leave, and thereafter must pay 2/3 of the employee’s regular pay, capped at $200/day and $10,000 total. Like current law, it is the employee’s choice whether to use accrued paid leave.
2) Paid Sick Leave
The Act provides for mandatory paid sick leave for the following purposes related to COVID-19: when the employee is (a) subject to a quarantine order; (b) advised by a health care provider to self-quarantine (for COVID-19); (c) experiencing symptoms and seeking a medical diagnosis; (d) caring for an individual doing undergoing (a) or (b); (e) caring for a child whose school or place of care is closed due to COVID-19; or (f) experiencing any other substantially similar condition. The leave must be up 80 hours of paid sick leave, at the regular rate of pay if used for (a), (b), or (c) above, capped at $511/day and $5,110 total OR at 2/3 of regular pay if for (d), (e), or (f) above, capped at $200/day and $2,000 total.
3) Health Plan Benefit Mandate
All insured and self-funded medical plans must cover diagnostic testing services for COVID-19 at 100 percent without any deductibles or co-pays. This mandate does not apply to treatment.
4) Payroll Tax Credit
The Act includes a payroll tax credit for employers for both the emergency FMLA expansion and the paid sick leave. This is a dollar-for-dollar credit against the employer portion of Social Security taxes. A refund is possible for amounts that exceed what is available as a credit.
Fournier Legal Services has been a customer-service oriented, technology-based, paperless law firm from the day we opened, and we are uniquely positioned to help our clients navigate the current environment. For any questions related to Business Law or Estate Planning, please contact us by calling 860.670.3535 or emailing email@example.com.
Joseph E. Fournier is an Attorney and a CPA who has more than twenty years of experience in a variety of business legal matters, including start-ups and company formations, drafting shareholder and operating agreements, contracts, employment law, commercial litigation, tax planning and audit defense, and mergers and acquisitions (M&A). He also handles estate planning matters, such as business succession planning, wills, trusts, and probate.