At the federal level, Congress is moving quickly to limit the financial consequences this crisis is bound to have on American workers. On Saturday, March 14th the U.S. House of Representatives passed the Families First Coronavirus Response Act, after negotiations with the White House. President Trump has indicated his support for the bill, and if it is approved by the Senate, it would grant employees two weeks of COVID-19 related paid sick leave at 100% of the employee’s normal pay, up to a $511 per day cap. It would also provide up to 12 weeks of COVID-19 related paid family and medical leave at 67% of the employee’s normal pay, up to a $200 per day cap. In its current version, the bill makes such paid leave benefits available to all workers, regardless of full=time or part-time status, who are either infected with COVID-19, caring for someone with the virus, quarantined (including those who are self-quarantined and those unable to work because their employers have temporarily ceased operations due to COVID-19), or tasked with caring for children whose schools or daycares are closed due to the outbreak. The bill explicitly exempts benefits paid under this program from gross income under the Internal Revenue Code.
Employees would apply for the family and medical leave benefit directly through the Social Security Administration, so no action would be required by the employer and there would be no liability to the employer. However, employers with under 50 employees would be able to apply for a waiver from the leave under certain circumstances. Any paid leave period provided by the employer would run concurrently with this family and medical leave benefit such that the total leave period would not exceed 12 weeks. It will likely take time for the Social Security Administration to transmit leave benefits to workers, and advancing the payment to employees with the written understanding that they will reimburse you once they receive the funds may be a good option for those employers with non-highly compensated employees who want to maintain goodwill and morale.
On the other hand, the paid sick leave provision of the bill does require action on the part of employers, who would be required to provide 14 days of sick leave directly to workers who meet the COVID-19 related requirements specified above. While the legislation requires employers to pay employees for this leave, employers with less than 50 employees can apply for reimbursement via the U.S. Department of the Treasury. None of the above is set in stone of course, as the Senate may demand further modifications to the bill before its passage.
This is just an overview and our guidance will change as this fluid situation unfolds. As we have all seen over the past week, this is a rapidly moving crisis and our nation’s response will be constantly evolving. Rest assured we are keeping abreast of changes to law and policy and will provide you timely updates. Should you have additional questions or concerns, we are always available via mobile phone to counsel you through this unprecedented emergency.
Ann K. Sullivan