Paid Sick and Family Leave under the Family First Coronavirus Response Act

The Families First Coronavirus Response Act (Act) provides paid sick leave and expands family and medical leave for COVID-19 related reasons and creates the refundable paid sick leave credit and the paid childcare leave credit for eligible employers.

Eligible employers are businesses with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim credits based on the qualifying leave they provide between the April 1 and Dec. 31, 2020.

Qualifying Reasons for Leave:

Under the Act, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

2. has been advised by a health care provider to self-quarantine related to COVID-19;

3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;

4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);

5. is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or

6. is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Duration of Leave:

For reasons (1)-(4) and (6): A full-time employee is eligible for up to 80 hours of paid leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

For reason (5): A full-time employee is eligible for up to 12 weeks of paid leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

Calculation of Pay:

For leave reasons (1), (2), or (3): employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day (over a 2-week period).

For leave reasons (4) or (6): employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day (over a 2-week period).

For leave reason (5): employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave).

Tax Credit for Qualified Sick Leave

The total payroll tax credit is limited to 10 days of wages per employee.

Tax Credit for Qualified Family Leave

A separate refundable payroll tax credit applies for family leave wages paid by an employer under the Coronavirus Response Act. The credit is 100 percent of the amount of qualified family leave wages limited to $200 per day per employee, up to an aggregate of $10,000.

Wages, for purposes of both credits, include a portion of health plan expenses properly allocable to the qualified sick and family leave wages. The paid sick and family leave requirements and the related employer tax credits are temporary. They expire on December 31, 2020.

The IRS is expected to provide additional guidance on these credits soon.

Prompt Payment for the Cost of Providing Leave

Under IRS guidance, eligible employers who pay qualifying sick or childcare leave will be able to offset an amount of the payroll taxes equal to the amount of qualifying sick and childcare leave that they paid, rather than pay them with the IRS.

The payroll taxes that are available for offset include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and childcare leave paid, employers will be able file a request for an accelerated payment from the IRS.

**This offset program is only available to employers that pay the above leave, to the extent of available credits and participating employees.**

Small Business Exemption

Small businesses with fewer than 50 employees may be eligible for an exemption from the leave requirements where the requirements would jeopardize the ability of the business to continue.  A small business may claim this exemption if an authorized officer of the business has determined that:

1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  

2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  

3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

Enforcement

The U.S. Department of Labor will provide a period of time for employers to come into compliance with the Act.  All eligible employers must be in compliance on or before April 17, 2020.

Additional Information

· Employers may not discharge, discipline or discriminate against any employee who takes leave under this act.

· Oregon requires all employees that are able to telework to do so.

· If the business is closed for operation on or before April 1, 2020 this act does not apply.

· Employees must be allowed to return to work to any open position for the period of at least one year.

· Sick leave benefits under this act require the employee to be employed as of the date of leave with no minimum service requirement.

· Family leave benefits under this act require the employee have a minimum of 30 days of service.

· Benefits under this act cannot be combined with Unemployment Benefits.

· Benefits under this act are not available to employees working or teleworking.

· Employer cannot require employees to use any accrued leave before benefits under this act.

· Essential employees may not be subject to this act. *Please contact the Bureau of Labor

**This information is subject to change.  Contract the US Department of Labor or the Oregon Bureau of Labor for more information.

Cherina DK Hart, CPA