Update on the Families First Coronavirus Response Act
Congress passed the Families First Coronavirus Response Act (H.R.6201) on March 18, 2020. The bill provides paid sick leave and free coronavirus testing, expands food assistance and unemployment benefits.
The sick leave portion of the bill likely will have the most impact on small business owners. Specifically, it requires employers to provide two weeks' worth of paid sick leave if employees are unable to work because they're subject to quarantine or isolation, are experiencing symptoms of COVID–19, are caring for someone who is in quarantine or isolation and/or have children in schools that have closed. It is limited to $511 per day for up to 10 days (up to $5,110 in total) for an eligible employee in coronavirus quarantine or seeking a coronavirus diagnosis. An employee can also receive emergency paid sick leave of up to $200 per day for up to 10 days (up to $2,000 in total) to care for a quarantined family member or a child whose school or child-care location has been closed due to the pandemic.
For those who are self-employed, there will be a tax credit comparable to the sick leave amount.
The legislation also gives up to three months of family and medical leave, equivalent to no less than two-thirds of the person's pay up to a maximum of $200 per day, subject to an overall per-employee maximum of $10,000 in total family-leave payments.
The legislation applies to employers with fewer than 500 employees. Employers who are required to provide paid time off will need to bear the costs of paying their employee, but the federal government would provide payroll tax credits to cover those costs.
DISCLAIMER: This article does not constitute professional tax advice or legal advice. Consult with a tax adviser or legal professional if you have specific questions about the Families First Coronavirus Response Act or any other aspect of employment benefits or small business taxes.