Coronavirus Family Leave Act Expansion – The Families First Coronavirus Response Act

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The Families First Coronavirus Response Act
The coronavirus pandemic has brought unprecedented challenges to the United States and the rest of the world. To help combat many of the financial challenges facing our country, Congress passed the Families First Coronavirus Response Act, to help people make it through these difficult times. The bill goes into effect on April 2, 2020, and…

The coronavirus pandemic has brought unprecedented challenges to the United States and the rest of the world. To help combat many of the financial challenges facing our country, Congress passed the Families First Coronavirus Response Act, to help people make it through these difficult times.

The bill goes into effect on April 2, 2020, and expires on December 31, 2020, unless extended.

The coronavirus pandemic is causing the largest economic disruption since the Great Recession that started in 2008-2009. We can’t predict what will happen going forward. The government has been discussing additional help for the public, including a delay for the tax filing deadline, possible tax breaks, stimulus checks, mortgage payment deferments, deferments for student loan payments, and more.

And of course, it’s possible there may be changes or extensions to this bill going forward. We will be sure to update this page as needed.

Let’s take a look at what is covered under this aid package.

The Families First Coronavirus Response Act

Families First Coronavirus Response Act

Here are some of the benefits that were passed under the Families First Coronavirus Response Act.

The bill works to expand The Family and Medical Leave Act (FMLA), a federal law that requires certain employers to provide time off for employees.

The Families First Coronavirus Response Act adds two primary provisions to the FMLA:

  1. It extends the FMLA to allow employees to take up to 12 weeks of job-protected leave if they are unable to work or telework due to taking care of children whose school or childcare facility has closed due to the coronavirus, and
  2. The bill requires employers with fewer than 500 employees to provide paid sick leave for up to two weeks

Let’s look at these more closely.

Emergency Family Medical Leave Extension

The Family and Medical Leave Act requires employers with more than 50 employees and fewer than 500 employees to provide employees with up to 12 weeks of family leave.

What does the leave extension program cover?

The Families First Coronavirus Response Act requires employers to give caregivers for children under the age of 18 who are not able to attend school or childcare due to closures related to the coronavirus up to 12 weeks of job-protected leave.

How much money do workers get paid on Family Leave?

The first 10 days of the leave may be in an unpaid capacity. However, employers must pay their employees for each subsequent day of emergency leave.

Family members who are caring for a child or sick family member would earn no less than two-thirds of their average pay, with a daily limit of $200, and an aggregate limit of $10,000.

Exemptions for the emergency FMLA program

Small businesses with fewer than 25 employees may be exempted from this law under certain conditions, including if the employee’s job is eliminated due to the economic impact of the public health emergency.

Small businesses with fewer than 50 employees may also be exempt if the Secretary of Labor deems that this exemption could impact the viability of the business going forward.

Where will the money to pay for the sick leave come from?

The government is offering businesses and non-profit organizations a payroll tax credit that should be reimbursed within 3 months of filing for the credit. The credit is also fully refundable.

Paid Sick Leave – Up to 2 Weeks Off with Pay

The 2020 coronavirus outbreak has pushed the U.S. government to do something that it has never done before – offer a widespread, federally mandated paid sick leave program.

However, the paid leave program doesn’t cover all workers, and it is not indefinite. There are some exceptions to this program and the program is currently slated to sunset on December 31, 2020, unless extended.

That said, it does offer relief for some those who are ill and cannot afford to miss work.

What does the paid sick leave program cover?

The new law requires employers with fewer than 500 employees to offer up to two weeks (80 hours) of paid time off for sick leave. Part-time employees are eligible for an amount of time off that is equivalent to the average amount of time they normally work over a two-week period.

The bill covers qualified workers for two weeks of paid sick leave if they are ill, quarantined with or seeking a diagnosis for the coronavirus, or if they are caring for family members who are ill. It also covers a parent who is caring for a child due to a school or childcare closure due to the coronavirus outbreak.

Who qualifies for the paid sick leave program?

The paid sick leave program covers most employees at small and midsize companies, as well as federal employees who have been employed for at least 30 days.

Part-time employees, self-employed business owners, and gig economy workers are also eligible under this program.

Part-time would be paid up to the amount they would normally earn during the two-week period.

Self-employed business owners and gig economy workers would calculate their average daily self-employment income for the year. They would later file a claim as a tax credit when they file their taxes next year. Immediate relief can be had by reducing estimated taxes by the amount they will claim. More info below.

Who doesn’t qualify for the paid sick leave program?

Unfortunately, the plan excludes employees of companies that employ 500 or more people (this excludes roughly 48% of the American workforce).

The majority of large companies already offer paid sick leave, though not all companies offer two weeks.

There are additional exemptions that cover employees of small businesses and those in the medical community and first responders.

Small businesses with fewer than 50 employees are included in the sick leave plan. However, these small businesses can receive an exemption from the Labor Department if offering paid sick leave would put the company at risk of going out of business. Approximately 27% of the American workforce works in businesses of this size.

How much money do workers get paid on sick leave?

The sick leave plan calls for employees to be paid their normal wage (or average wage), up to a daily limit of $511 per day. Workers who take sick leave for other reasons man only earn two-thirds of their normal wage, up to $200 per day.

Where will the money to pay for the sick leave come from?

The government is offering businesses and non-profit organizations a payroll tax credit that should be reimbursed within 3 months of filing for the credit. The credit is also fully refundable.

Provisions for the Self-Employed & Gig Workers

The Families First Coronavirus Response Act provides self-employed individuals with refundable tax credits based on the number of hours or days they cannot work due to the coronavirus pandemic.

Here is how the two different types of leave impact the self-employed and gig workers:

Family Leave: Self-employed and gig workers can take up to 50 days away from work for the same qualifying reasons as the Family Leave listed above.

Sick Leave: Self-employed and gig workers can take up to 10 days off from their business or work for the same qualifying reasons as the sick leave mentioned above.

Both types of leave are given as refundable tax credits based on the worker’s average daily self-employment income and the reason they missed work.

Further Questions & Commentary

This act was just announced and there are many big changes happening right now. So consider this a synopsis of the bill. You can read the full text here.

Keep in mind, there are some exemptions for certain businesses. And your business may have its own policies that may work in addition to this new act. Work with your Human Resources department to work through any specific issues you have.

If you are a self-employed business owner or a gig worker, then you may have to work with a tax professional to determine how the tax credits will work. There are a lot of unknowns at the moment, so be patient with this process.



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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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