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President Signs Families First Act– What You Need to Know

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On March 14, 2020, the House passed the “Families First Coronavirus Response Act” by a vote of 363 – 40. The Senate followed by a vote of 90 – 8. The bill was then signed into law by the President. We are tracking multiple proposals being floated for a third stimulus bill.

Summary of the H.R. 6201 Bill:

Sick and Family Leave

For employers with less than 500 employees and government workers, the bill mandates two weeks of sick leave at 100% of normal salary, capped at $511 per day for employees quarantined, showing symptoms or seeking care and $200 per day for employees caring for a child whose school or day care facility is closed because of the virus. The IRS and Department of Labor as issued guidance and FAQ on how to determine the 500 employees. We encourage our clients to review this guidance to understand when a business is affiliated with a related business.

For employers with less than 500 employees and government workers, the bill mandates 12 weeks of Family Medical Leave at 67% of normal salary capped at $200 per day. Self-employed individuals and “gig” workers are eligible to get the benefits in the form of a refundable tax credit. Employers also claim a refundable tax credit for sick and family leave time paid.

Sick Leave Specifics

An employee does not have to have the coronavirus to claim benefits. Sick leave applies if the employee is diagnosed with or quarantined due to COVID-19; is seeking care; is ordered by a public official or health care provider to self-isolate because of exposure to the virus or experiencing symptoms. Full-time employees are entitled to 10 days of such leave. Part-time employees are entitled to time equal to the number of hours they work on average over a two-week period.

Family Leave Specifics

This applies to employees caring for a child under the age of 19 whose school or childcare facility is unavailable due to a public health emergency. The first 10 days consist of unpaid leave. Each day thereafter is paid leave. This results in a cap of $10,000 in the aggregate: 10 days unpaid and 50 days paid at $200 per day.

Additional Details

Funding for Nutrition Programs

Provides emergency funding for WIC, SNAP and other nutrition programs. Waives certain requirements for child nutrition programs. Waives work requirement for SNAP.

Funding for Testing

Funds were allocated to Medicare, Medicaid and other federal programs and private health plans to fully fund testing. Includes high-deductible plans and allows participants of such plans to continue to make contributions to Health Savings Accounts.

Unemployment Assistance

Grants to states for Unemployment Insurance benefits in the form of grants. Funds are targeted to help states with staffing and technology to deal with increased claims. Additional emergency grants are earmarked for states that experience an increase of greater than 10% in unemployment claims. Also provides for interest-free loans to pay regular UEI benefits.

Effective Date

April 1, 2020

COVID-19 Business Resources

 

Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law. 

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