HR 6201 Families First Coronavirus Response Act
On March 18 th , President Trump signed the Families First Coronavirus Response Act (“Act”) , which applies to employers with 500 or fewer employees. The Act provides a tax credit for employers to offset the costs of paying their employees sick leave under the Emergency Sick Leave Act (“Sick Leave Act”) and leave to care for a child under the Emergency Family and Medical Leave Expansion Act (“Family Leave Act”).   The benefits provided for under this act apply only to wages paid with respect to the period beginning on a date SELECTED by the Secretary of Treasury, which is during the 15-day period beginning on March 18, 2020 and ending on December 31, 2020. Therefore, this act takes effect NO LATER than April 2, 2020 and expires December 31, 2020.

Tax Credits for Sick Leave Act and Family Leave Act
There will be a refundable credit against the employer portion of social security taxes for the amount that the employer pays employees under the Sick Leave Act and the Family Leave Act equal to 100 percent of wages paid, subject to the wage caps listed in the acts below. Once the credit has eliminated social security tax for the quarter, the employer will be refunded the excess amount. The credits are also increased by the “qualified health plan expenses” (to be defined by the final regulations) that are allocated to qualified sick leave wages or medical leave wages. Certain self-employed individuals will also be eligible for this credit. There are no provisions in the Act that exclude certain employees, therefore unless the final regulations exclude certain employees, then ALL employees (including officers and owners) are eligible in accordance with the provisions of either Act.

Emergency Paid Sick Leave Act
If an employee has COVID-19 or is having symptoms of COVID-19, the Sick Leave Act will apply. Th e Act provides up to 80 hours of sick time for eligible employees if they are eligible to leave work for one of the six reasons below.  
 
The employer MAY NOT require an employee to use other paid leave provided by the employer to the employee before the employee uses this paid sick time.
 
The employer CANNOT discharge or discipline an employee for their use of paid sick leave under the Act.
 
The employer will be required to post a notice in the workplace, which is to be developed and provided by the Secretary of Labor.
 
There is no minimum employment time for this provision. All employees are eligible.
 
Businesses with fewer than 500 employees are subject to this act. The Secretary of Labor shall have the authority to issue regulations to exclude certain healthcare providers and emergency responders. They will also provide procedures to exempt small businesses with 50 or fewer employees when the imposition of such requirements would jeopardize the viability of the business as a going concern. (The requirements and procedures for this exemption has not been published yet.)
 
An employee is eligible if they need to leave work for the following reasons:
 
  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
 
A full time employee will be paid up to 80 hours of sick time, a part time employee will be paid the average number of hours that they work over a two week period, there is an alternate calculation if the hours vary wildly. If the reason for sick pay is 1-3 above, the employee will receive full pay which cannot exceed $511/day or $5,110 in the aggregate. If the reason for sick pay is 4-6 above, the employee can be paid no less than 2/3 of their pay which cannot exceed $200/day or $2,000 in the aggregate.
Emergency Family and Medical Leave Expansion Act
This act applies to employees that are unable to work or telework because they have to care for their family members, as defined by the Act.
 
Businesses with fewer than 500 employees are subject to this act. The Secretary of Labor shall have the authority to issue regulations to exclude certain healthcare providers and emergency responders, they will also provide procedures to exempt small businesses with 50 or fewer employees when the imposition of such requirements would jeopardize the viability of the business as a going concern. (the requirements and procedures for this exemption has not been published yet)
 
An eligible employee is one that has been employed for at least 30 calendar days.
 
An employee is eligible for paid leave if they are unable to work or telework to care for a child whose school has been closed, or the child care provider is unavailable due to a public health emergency as well as family members as defined by the Act.
 
The first ten days of leave under this act is unpaid, the employee may use any sick or vacation time for this time period.
 
After the first ten days, the employee is paid no less than 2/3 of the regular rate of pay for the number of hours they would normally be scheduled to work or if the work schedule varies, the average number of hours they worked over the last six month period. The paid leave cannot exceed $200/day or $10,000 per employee in the aggregate.
 
The employer is required to restore the employee to their position at the end of their leave, the earlier of the date the qualifying need concludes, or twelve weeks after the employee’s leave commences. There are exceptions for employers with fewer than 25 employees.


About Shelton & Company, CPAs, P.C.

Shelton & Company, CPAs, P.C. is a CPA firm specializing in the accounting needs of construction contractors and their related companies. If you have any questions about the information provided here or for more information about our firm, please contact us at 1-800-446-2534 or visit us on the web at www.ConstructionCPAs.com