The FAMILIES FIRST CORONAVIRUS RESPONSE ACT (The Act) requires employers with fewer than 500 employees to provide both paid and unpaid leave (Small businesses with fewer than 50 employees may request an exemption from the requirement to make Family Leave payments, if making such payments would jeopardize the employer’s ability to remain in business.) See the Department of Labor for more details.
The leave generally is available when an employee must take off to care for the employee’s child under age 18 because of a COVID-19 emergency declared by a federal, state, or local authority that either (1) closes a school or childcare place or (2) makes a childcare provider unavailable. Generally, the first 10 days of leave can be unpaid and then paid leave is required, pegged to the employee’s pay rate and pay hours. However, the paid leave cannot exceed $200 per day and $10,000 in the aggregate per employee.
Observation! As discussed in our previous posts, the Act requires an employer to pay “Sick Leave” payments to an employee who is unable to work because the employee is caring for their son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider is unavailable due to COVID-19 precautions.
However, these payments are not required after a full-time employee has been paid 80 hours of Sick Leave. (Typically, 10 days at 8 hours/day) By contrast, “Family Leave” payments are not required during the first 10 days of Family Leave, but are required for up to 10 weeks following the first 10 days of Family Leave. Thus, it appears that a full-time employee who is unable to work or telework due to the need for leave to care for a son or daughter under age 18, for reasons mentioned above, would be
entitled to: 1) “Sick Leave” payments for up to 80 hours and 2) “Family Leave” payments following that 10-day period up to an additional 10 weeks.
The Act provides a credit equal to 100% of the Qualified “Family Leave” paid by an employer. Eligible employers who pay qualifying family leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying family leave that they paid, rather than deposit them with the IRS.
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. If there are not enough payroll taxes to cover the cost of qualified family leave paid, employers will be able to file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. Use the New Form 7200 to make your payment request.