Redpath Insights

Families First Coronavirus Response Act Highlights

by John Kammerer, CPA

This article was updated with new information on March 20, 2020 at 8:45 a.m. Also, you can see an FAQ about the Act by clicking here.

On Wednesday, March 18, 2020, hours after passage by the Senate, the President signed legislation providing relief to those impacted by the Coronavirus.  The bill promotes paid sick leave, increased food and unemployment benefits as well as other provisions.  Some of the key provisions of the bill are highlighted below.  Additional relief is expected in the coming days following the recently released Notice 2020-17 providing for the deferral of certain tax payments previously due April 15, 2020 until July 15, 2020. 


If you have questions about the Families First Act, you can email 
familiesfirstact@redpathcpas.com

Emergency Paid Sick Leave

Effective April 2nd, in addition to the pay required under the expanded FMLA (see below), employers with less than 500 employees are required to provide 80 hours of paid leave for full time employees and the average number of hours worked over a 2 week period for part time employees for the following situations:

  • The employee is subject to quarantine or isolation related to COVID-19
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  • The employee is caring for an individual who is subject to an order for the subparagraphs 1 and 2 above.
  • To care for the child of such employee if the school or place or care has been closed due to COVID-19.
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

For employees qualifying under condition 1, 2 or 3 above the required paid sick time is their normal pay up to $511 per day for 10 days. For employees qualifying under condition 4, 5 or 6 above, the required paid sick time is 2/3rd of their regular pay up to $200 per day for 10 days.

Employers shall be entitled to a credit against payroll taxes equal to 100% of qualified sick leave paid by such employer, limited to the actual amount paid.

The overall limitation on the number of days taken into account under the above paragraph for any quarter shall not exceed the excess of 10 over the aggregate number of days taken into account for all preceding calendar quarters.

Emergency Family and Medical Leave

The  Family and Medical Leave Act of 1993 is amended to include language expanding relief to to those with a qualifying need as a result of a public health emergency.  A qualifying need is described as a leave where the employee is unable to work (or telework) due to a need to care for a son or daughter under 18 years of age as a result of the closure of school or place of child care as a result of COVID-19.  The expansion applies as of April 2nd to employers with fewer than 500 employees and requires the following for those with a qualifying leave as a result of the coronavirus:

  • The first 10 days for which an employee takes leave can consist of unpaid leave (This may be covered under the Emergency Paid Sick Leave previously mentioned)
  • Subsequent to the 10 days, an employer is required to provide up to an additional 10 weeks of paid leave. The pay for such leave is calculated as follows:
    • 2/3rd of the employeesโ€™ regular rate of pay (maximum $200 per day)
    • For employees with varying schedules from week to week, employers should use the average over the preceding 6 month period or the reasonable expectation at the time of hiring if the employee did not work over that period.
  • In the case of an employer, there shall be a credit against tax for qualified family leave wages paid by such employer. With respect to any individual, the credit shall not exceed $200 for any day and $10,000 in aggregate.

Unemployment Benefits

There are one billion dollars provided to states to expand unemployment benefits for those who have been laid off in response to strains imposed by the virus.

The bill contains a number of provisions and requirements impacting employers and employees.  Certain businesses with less than 50 employees will be exempt from certain requirements if such requirements would jeopardize the businesses ability to operate on a go forward basis.  The bill has tremendous implications to employers so businesses need to work closely with their human resource advisors. 


If you have questions about the Families First Act, you can email 
familiesfirstact@redpathcpas.com

COVID-19 CARES Act

John Kammerer, CPA

John Kammerer, CPA

John Kammerer is a partner at Redpath and Company and holds a seat on the firmโ€™s board of directors. He leads the firmโ€™s business tax and M&A service areas, assisting clients with tax planning and preparation, research, entity structuring, and M&A transactions. John works with a variety of clients in industries such as manufacturing, construction, real estate, and professional services. He is a frequent presenter on topics of business taxation and entity structuring. John is also a member of the S Corp Association advisory board and is actively involved with the group to promote and support tax policies that positively impact S Corporations and privately-held businesses. John graduated from Winona State University with a Bachelor of Science degree in Accounting. He is a member of the American Institute of Certified Public Accountants (AICPA) and the Minnesota Society of Certified Public Accountants (MNCPA). He has provided public accounting services at Redpath and Company since 2004.

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