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What The Families First Coronavirus Response Act Means For Your Business

March 21st, 2020 | Written by

What The Families First Coronavirus Response Act Means For Your Business

On Wednesday, March 18th, the Families First Coronavirus Response Act was signed into law. The bill aims to provide employees with additional leave if they are forced to stay home due to the coronavirus.

What the bill provides

The bill grants two weeks paid sick leave at 100% of an employees normal salary, up to $511 per day. It also provides up to 12 weeks of paid family and medical leave at 67% of an employees normal salary, up to $200 per day. These benefits will be in place for the next 12 months.

Who is covered?

  • Small (49 or fewer employees) or midsize businesses (50-499 employees) are required to provide these benefits for employees impacted by coronavirus.
  • The labor department can exempt small businesses with fewer than 50 employees if having to pay these benefits “would jeopardize the viability of the business”.
  • Employees must have worked at the company for at least a month to qualify.
  • Self-employed individuals and gig workers can get these benefits in the form of a tax credit applied to their income taxes. These people must show that they have complied with the self-isolation recommendation or that they had to care for a child whose school has closed due to coronavirus.

How will the costs be recuperated?

The bill provides a tax credit that will be applied to what your business normally pays for each employee’s Social Security. If the sick or medical leave ends up costing more than the employee’s Social Security bill, the U.S. government will issue the employer a check to cover the remaining costs.

Do employees have to have coronavirus to receive this benefit?

No. The two weeks of paid sick leave will apply to anyone told to quarantine, showing symptoms, exposed to the virus, or trying to get a test or preventive care. To qualify for the family leave benefit, an employee must be taking care of a child whose school or child-care facility is closed due to coronavirus.

Other questions?

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    This information is not intended to be used as the only bases for investment decisions, nor should it be constructed as advice designed to meet your particular needs. You are advised to seek the advice of your financial advisor prior to making any decision based on any specific information contained herein.
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