The “Families First Act” requires virtually all small employers
to extend sick leave to affected employees, but a tax credit will help small
business and not-for-profit organization employers pay for it.
Following are the most critical provisions, we believe, for small employers:
· 1. Public Health Emergency Leave (Division C of the
Act effective April 2, 2020) – Small employers who have “employees
who are unable to work (including telework) due to a need to care for a child under
age 18 if school or child care is unavailable due to a public health emergency”
are required to:
o Provide paid leave “if needed by any employee
who has been employed at least 30 calendar days,”
o
Pay them “at a rate no less than two-thirds of
the regular rate of pay” for public health emergencies declared by a federal,
state or local authority that extend beyond 10 days (“employees may be required
to use existing accrued leave during the first 10 days”).
·
2. Paid Sick Leave (Division E of the Act effective April 2, 2020) – Small employers
are required to pay immediate paid leave (no 10-day waiting period as under Division
C cited above):
o
For full-time employees, 80 hours, and for
part-time employees, two weeks based on average hours worked.
o
Triggered if an employee is unable to work (or
telework) due to:
1. Self-care leave for federal, state or
local quarantine or isolation order related to COVID-19, advice of a health
care provider, or to obtain a medical diagnosis if the employee has COVID-19 symptoms
(at employee’s regular rate of pay up to $511 per day), or
2. Family-care leave in order to care for
someone needing the first two “self-care” categories, or care for a son or
daughter if the school or place of care has been closed due to COVID-19
(exemptions may be available for businesses less than 50 employees whose “viability”
could be jeopardized) (at two-thirds employee’s regular rate of pay up to $200
per day).
· 3. Federal funding for small employers
o
The wages paid under the Families First Act”
would not be subject to the employer portion of social security tax
(6.2% of gross wages).
o
A refundable credit against payroll taxes for wages
paid to employees for paid leave under Division C or E. Similar benefits are available
to self-employed people but beyond the scope of this post at this time.
· 4. Employers may also be able to reimburse
employees for additional costs they incur due to the COVID-19 emergency without
reporting those reimbursements as employee wages (“qualifying disaster relief
payments”).
This summary (honestly) is brief, but represents our best
attempt to quickly share some important information with small employers.
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