Families First Sick Leave Summary

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Families First Sick Leave Summary

Families First – Sick Leave

The White House and Congress have been busy the last couple of weeks trying to find ways to mitigate the COVID-19 crisis for everyone. On March 18, the Families First Coronavirus Response Act was signed into law. This law is designed to help companies keep workers employed, even when they are sick or needing to care for a child due to school closures. (Note: This is not the same as the law signed on March 27, which provides for direct payments to individuals and loans to companies, among other things.)

COMPANIES ARE COVERED UNDER FAMILIES FIRST ACT IF…

If an employee cannot work for the following reasons:

  • Employee subject to a federal, state, or local quarantine or isolation order related to COVID-19,
  • Been advised by health care provider to self-quarantine due to COVID-19, or
  • Experiencing COVID-19 symptoms AND seeking medical diagnosis.

Then the employing company is entitled to seek repayment from the government for the full amount of sick pay paid to the employee, up to a maximum of $511 per day for 10 days.

If an employee cannot work for the following reasons:

  • Caring for individual who is quarantined due to isolation order from government or on advice of health care provider, or
  • Caring for child whose school closed related to COVID-19

Then the employing company is entitled to seek repayment from the government for 2/3 of the amount of sick pay paid to the employee, up to a maximum of $200 per day for 10 days.

SICK LEAVE FOR CHILD CARE

Expanded Family and Medical Leave Act (FMLA) can be taken for employees whose children are home due to school closures related to the COVID-19 crisis. In these cases, an additional 10 weeks of sick pay may be taken, reimbursable to the employer at 2/3 of the amount of sick pay paid to the employee, capped at $200 per day and $10,000 in aggregate per employee.

HEALTH INSURANCE PREMIUMS INCLUDED

Note that amounts that employers pay for health insurance is also entitled to reimbursement.

HOW TO GET REIMBURSED / PAID

The repayment amounts are first taken by reducing the amount of your payroll tax deposits. If there are still additional amounts to recover, a claim form will be available to get an expedited refund.

The sick leave requirements under this Act are effective for sick leave taken from April 1, 2020 – December 31, 2020.

Businesses with fewer than 50 employees may be eligible for an exemption from the FMLA leave requirements as they relate to school closings. The companies must be able to show that complying with these requirements would jeopardize the ability of the business to continue.

DOCUMENTATION TO CLAIM REIMBURSEMENT

The IRS will be providing instructions for procedures that must be followed to claim a tax credit, and documents you will need to retain to support the credits. Examples to support credit may include:

  • Sick Leave – FMLA Medical Certification Form
  • Childcare – Notice provided by the school or day care or published in a newspaper.

There are still several details that have not been clarified by the IRS. We expect them to be clarified within the next few days. Please give us a call or email us if you have specific questions and we will do our best to help you through the new rules.