Backgrounder

Families First Coronavirus Response Act

Tags:

Coronavirus, Democrat bill, Paid time off

LAST UPDATED: March 18, 2020

Summary: The Families First Coronavirus Response Act, H.R. 6201, would require employers with fewer than 500 employees to provide employees with up to 12 weeks of paid leave for medical or family care situations related to the coronavirus public health emergency. The first two weeks (80 hours) of paid leave would be at full pay under the new Emergency Paid Sick Leave Act, with the following 10 weeks paid at two-thirds of regular pay under the expanded terms of the Family and Medical Leave Act (FMLA) as updated by the Emergency Family and Medical Leave Expansion Act. Federal tax credits would be available to employers for both categories of paid leave. Below is a summary of these changes to federal paid leave policy and related tax credits.

Requirements in the bill:

DIVISION C—Emergency Family and Medical Leave Expansion Act

This section expands the Family and Medical Leave Act (FMLA) to a new usage for response to the public health emergency related to the coronavirus, for a period of one year. This change would require employers with fewer than 500 employees to grant employees up to 12 weeks of leave for medical needs, or quarantine of the employee, or when the employee is unable to work or telework due to a need to care for a child if the school or daycare provider has been closed or is unavailable. The first 14 days would be categorized as unpaid leave under FMLA, though the new Emergency Paid Sick Leave Act [in Division E] would require the employer to provide paid leave during these two weeks, reimbursed via a tax credit at a different rate. For each day of leave an employee takes after the initial 14 days, an employer must provide paid leave under the amended FMLA.

FMLA paid leave must be an amount that is not less than two-thirds of an employee’s regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work.  For employees with varied schedules, the employer shall use a number equal to the average number of hours that the employee was scheduled per day over the six-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type. If the employee did not work over such period, the employer shall use the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

DIVISION E—Emergency Paid Sick Leave Act

The Emergency Paid Sick Leave Act requires employers with fewer than 500 employees to provide two weeks of paid sick leave at the employee’s regular rate of pay.  This two-week window could cover the initial 14 days under the expanded FMLA policies in Division C.

An employer shall provide 80 hours of paid sick leave to each employee for any of the following uses:

  • To self-isolate because the employee is diagnosed with coronavirus
  • To obtain medical diagnosis if employee is experiencing the symptoms of coronavirus
  • To obtain preventative care for coronavirus
  • To comply with recommendations of public health officials

An employee would receive paid leave at two-thirds the regular rate of pay when using this leave time to care for a family member or care for a child whose school or childcare provider has closed due to the coronavirus.

The amount of paid sick time to which an employee is entitled shall be as follows:

  • Full time employees: 80 hours
  • Part-time employees: a number of hours equal to the number of hours that such employee works, on average, over a two-week period.

For employees with varied schedules, the employer shall use a number equal to the average number of hours that the employee was scheduled per day over the six-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type. If the employee did not work over such period, the employer shall use the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work.

This paid sick leave does not carry over from one year to the next. The employer may not require the employee to search for or find a replacement employee to cover hours during which the employee is using paid sick time. The employer shall post and keep posted notices informing employees of this benefit.

For employers with existing paid sick leave policies, the paid sick time under this act shall be made available to employees in addition to previously existing paid leave and the employer may not change its paid sick leave policies to avoid this application.

This act expires one year after enactment.

DIVISION G—Tax Credits for Paid Sick and Paid Family and Medical Leave

Employers shall be allowed a tax credit equal to 100 percent of the qualified sick leave wages paid to employees under the Emergency Paid Sick Leave Act (Division E), which applies to employers with fewer than 500 employees. The amount of qualified sick leave wages taken into account with respect to any individual shall not exceed $511 for any day for which the employee is paid qualified sick leave, or $200 per day when caring for a family member.  Excess tax credits for an employer shall be treated as an overpayment that shall be refunded. The same benefit is available for self-employed individuals.

Employers shall be allowed a tax credit equal to 100 percent of the qualified family leave wages paid to employees under the Emergency Family and Medical Leave Expansion Act (Division C). The amount of qualified sick leave wages taken into account with respect to an individual shall not exceed $200 for any day for which the employee is paid qualified family leave wages, and the aggregate of $10,000 per calendar quarter. Excess tax credits for an employer shall be treated as an overpayment that shall be refunded. The same benefit is available for self-employed individuals.

Any wages paid by reason of the Emergency Paid Sick Leave Act (Division E) and the Emergency Family and Medical Leave Expansion Act (Division C) shall not be considered wages for tax purposes.

Click here to read the bill language. 

Click here to download the Families First Coronavirus Response Act Backgrounder. 

Click here to read our backgrounder on the PAID Leave Act. 

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Additional Resources

Op-ed: Paid sick leave is a failed cure
March 11, 2020, Wall Street Journal
Aaron Yelowitz and Michael Saltsman
https://www.wsj.com/articles/paid-sick-leave-is-a-failed-cure-11583964836?mod=e2two 

I4AW Backgrounder: PAID Leave Act. 

I4AW Backgrounder: A Closer Look at the Coronavirus Bills: A breakdown of Democrat labor proposals

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