Emergency Paid Sick Leave and Emergency Family and Medical Leave (May Cover Eligible Employees and Independent Contractors):

H.R. 6201, the Families First Coronavirus Response Act, was the second coronavirus relief stimulus package and was enacted into law on March 18, 2020. The package includes provisions to aid American adults, including nutrition waivers, expansion of emergency family and medical leave, emergency paid sick leave, tax credits for paid sick and paid family medical leave, among other provisions.

Provision: Division C—Emergency Family and Medical Leave Expansion Act

Purpose: Provides families with critical protections to ensure that workers can care for their children.

Individuals Eligible for Relief:

  • Employees at companies with fewer than 500 employees.
  • State and local government employees.
  • Certain federal government employees.
  • Employees who work under a multiemployer collective agreement, whose employers pay into the multiemployer plan.

Description of the Relief:

  • Eligible full-time and part-time employees are entitled to 12 weeks of job-protected leave to care for their children in the event of their child’s school closure or if their childcare provider is unavailable due to COVID-19. The 12 weeks of job-protected leave include two weeks of unpaid leave, followed by 10 weeks of paid leave.
  • Eligible full-time or part-time employees may either elect or be required to overlap the two weeks of unpaid leave with other paid leave that they may have available.
  • The paid leave benefit to be paid by employers must not be less than two-thirds of the employee’s usual pay.
Relief Providers:
  • Employers initially front the cost of emergency paid sick leave but will be fully reimbursed — which covers both wages paid and the employer’s contribution to employee health insurance premiums during leave — by the federal government within three months.
  • The employer reimbursement will be in the form of a refundable tax credit, which will count against the employers’ payroll tax.
  • To receive the reimbursement, employers must submit emergency paid leave expenses as part of their estimated quarterly tax payments. If the employer’s costs more than offsets their tax liability, they will receive a tax refund from the IRS.

 

Provision: Division E — Emergency Paid Sick Leave Act

Purpose: Expands Emergency Paid Sick Leave to as many as 87 million U.S. workers, many of whom currently do not have paid leave.

Individuals Eligible for Relief:

  • Employees at companies with fewer than 500 employees.
  • Local, state, and federal government employees.
  • Employees who work under multiemployer collective agreement and whose employers pay into a multiemployer plan.

Description of Relief (for eligible employees):

  • Eligible full-time employees are entitled to two weeks or 80 hours of fully paid time off (maximum of $511 per day) to: (1) self-quarantine, (2) seek diagnosis or preventative care, or (3) receive treatment for COVID-19.
  • Eligible part-time employees are entitled to fully paid time off(maximum of $511 per day) for typical number of hours that they work in a typical two-week period to: (1) self-quarantine, (2) seek diagnosis or preventative care, or (3) received treatment for COVID-19.
  • Such paid leave is capped at $511 per day and $5,110 total per employee.

Description of Relief (for family members of eligible employee):

  • Eligible full-time employees are entitled to two weeks or 80 hours of fully paid time off at two-thirds of their regular pay (maximum of $200 per day) to: (1) care for a family member, (2) to care for a child whose school has closed, or (3) care for a child whose childcare provider is unavailable due to COVID-19.
  • Eligible part-time employees are entitled to fully paid time off at two-thirds of their regular pay (maximum of $200 per day) for typical number of hours that they work in a typical two-week period to: (1) care for a family member, (2) to care for a child whose school has closed, or (3) care for a child who’s childcare provider is unavailable due to COVID-19.
  • Such paid leave is capped at $200 per day and $2,000 total per employee.

 

Provision: Division G — Tax Credits for Paid Sick and Paid Family and Medical Leave

Purpose: Provides a credit against payroll taxes for 100 percent of the employer-paid qualified sick leave and/or employer-paid qualified family leave wages paid by such employer each calendar quarter, subject to specified limitation.

Individuals Eligible for Relief:

  • Employers.
  • Self-employed individuals (must maintain documentation of leave taken in order to be eligible for this credit).

Description of the Relief:

  • The amount of sick leave wages taken into account for purposes of the credit may not exceed $200 for any employee ($511 per day employees as defined under the Emergency Paid Sick Leave Act) and the aggregate number of days taken into account is limited to 10.
  • Self-employed individuals may receive a refundable income tax credit for 100 percent of sick leave amounts under the Emergency Paid Sick Leave Act. For other employees, the credit percentage is 67 percent.
  • The amount of qualified family leave wages considered for purposes of the credit is limited to $200 per day for each employee and $10,000 for all calendar quarters.
  • Self-employed individuals may receive a refundable income tax credit for 100 percent of family leave amounts.

Additional Information on Emergency Paid Sick Leave and Emergency Family and Medical Leave Provisions:

 

**Please note that the information provided includes condensed summarizations, descriptions, or opinions about recently enacted statutes. The information is not intended, nor should it be construed, to be legal advice. Members with needs or questions concerning the specific issues mentioned should seek the guidance of competent counsel or should contact the appropriate federal agency.