The Families First Coronavirus Response Act
Legislation signed into law by President Trump extends sick leave benefits for workers who are stricken by the coronavirus. The legislation also provides additional weeks of time off under the Family Medical Leave Act, which guarantees employees are able to return to their jobs afterwards.
Employers need to pay extra attention to the added paid sick leave and FMLA provisions of this new law, the Families First Coronavirus Response Act. Expansion of the Family Medical Leave Act The FMLA portion of the law grants 10 additional weeks of FMLA leave, but only for those who must stay home to care for a child whose school is closed, or their childcare provider is unavailable due to COVID-19- related issues.
These 10 weeks will be paid at two-thirds the employee’s regular rate of pay, up to $200 per day with a cap of $10,000. They will also receive 12 weeks of leave with job protection. Unlike traditional FMLA (which is unpaid), the new law enacts paid leaves after the first 10 days. Employees may elect to substitute accrued vacation, personal leave, or sick leave for the initial 10 days – the employer may not require such substitution. The new law applies to employers with fewer than 500 workers and employees who have been working for more than 30 days are eligible.
Paid sick leave
The new law also includes the Emergency Paid Sick Leave Act which permits employees to use sick leave related to COVID-19. The new law applies to employers with fewer than 500 employees and may exclude employers with fewer than 50 employees where a hardship exemption applies.
Full-time employees (subject to limited exemptions) are entitled to take 80 hours of paid sick leave immediately, while part-time employees get a pro-rated amount. These new sick leave amounts are in addition to, and not in lieu of, other paid sick leave benefits provided to the employee. Employers must permit workers to use COVID19-related sick leave before other sick leave. Employees can use this sick leave when they cannot work or telecommute because:
- They are subject to a government quarantine or isolation order related to COVID-19.
- They have been advised by a health care provider to self-quarantine due to COVID-19.
- They have symptoms of COVID-19 and are seeking a medical diagnosis.
- They are caring for an individual subject to quarantine due to COVID-19.
- They need to care for a child whose school or place of care is closed or whose childcare provider is unavailable due to coronavirus.
Employers are required to pay an employee at his or her regular rate of pay (with a cap of $511 per day and $5,110 in the aggregate) for sick leave use under reasons 1-3 above, and at two-thirds their regular rate of pay (capped at $200 per day and $2,000 in the aggregate) for sick leave use under reasons 4 and 5.
Employer tax credit for leave benefits
The federal government plans to reimburse employers via a refundable tax credit equal to 100% of qualified paid leave benefits paid by an employer, subject to certain caps and offset against social security taxes paid by the employer
Government Funded COVID-19 Relief Loans
SBA Disaster Relief Loan
The Small Business Administration is a federal agency that provides educational and financial resources for small businesses. During disasters the SBA provides Disaster Relief Loans for impacted businesses in amounts ranging between $5,000 and $2 million. The SBA is providing Disaster Relief Loans to small businesses experiencing a temporary decrease in revenue due to COVID-19.
California Disaster Assistance Loan Guarantee
For businesses that do not qualify for the SBA loan, California’s Small Business Finance Center partners with privately held financial institutions when the governor declares a state of emergency. The partnership guarantees small business loans (maximum of 750 employees) to assist in mitigating losses caused by disasters such as the COVID-19 pandemic.
Paycheck Protection Program (PPP)
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. If small businesses maintain payroll through this economic crisis, some of the borrowed money through the PPP can be forgiven – the funds will be available through June 30, 2020.
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