The Families First Coronavirus Response Act provides family and medical leave, as well as sick leave, to qualifying employees and tax credits to employers and the self-employed providing the leave.
- Read the Act
- IRS page
- Required posting for businesses with non-federal employees
- FAQs on the required posting
Below is a general overview of the two acts for leave, along with the accompanying tax credits for employers and the self-employed. For complete details or questions on how this might impact your business specifically, contact us.
Provides family and medical leave, as well as sick leave, to employees.
Emergency Family and Medical Leave Expansion Act (EFMLA):
- Applies to employers with fewer than 500 employees, through Dec. 31, 2020.
- Leave is generally available for employees who have been employed for at least 30 days and are unable to work or telework due to needing to care for a son or daughter under 18 because a school or place of care has been closed or a childcare provider is unavailable due to an emergency with respect to COVID-19 that is declared by a federal, state, or local authority.
- The first 10 days of leave may be unpaid and then paid leave is required, calculated based on an amount not less than two-thirds of an employee's regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work, not to exceed $200 per day and $10,000 in total.
Emergency Paid Sick Leave Act (EPSLA):
- Applies to private employers with fewer than 500 employees, and public employers of any size, and takes effect not later than 15 days after March 18, 2020, and expires December 31, 2020.
- Employees can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee's pay up to a maximum of $511 a day or $5,110 in total where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.
- An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at two-thirds the employee's pay up to a maximum of $200 a day or $2,000 in total.
- An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at two-thirds the employee's pay up to a maximum of $200 a day or $10,000 in total.
Provides tax credits to employers and the self-employed providing the leave.
The Act provides tax credits to employers to cover wages paid to employees while they are taking time off under the EPSLA and EFMLA.
- Applies to businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act, with claims between April 1 and December 31, 2020. Equivalent credits are available to self-employed individuals based in similar circumstances.
- Specific to the emergency paid sick leave provision, for an employee who is under a Federal, State, or local quarantine or isolation order related to COVID-19; or been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or is experiencing symptoms of COVID-19 and seeking a medical diagnosis; eligible employers may claim a credit for the employee's regular rate of pay, or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to $511 per day and $5,110 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit based on costs to maintain health insurance coverage for the eligible employee during the leave period.
- Specific to the emergency FMLA, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to COVID-19, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee's regular pay, capped at $200 per day or $10,000 in total. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit.
Comparable credits for those who are self-employed:
- It covers 100% of a self-employed individual's sick-leave equivalent amount, or 67% of the individual's sick-leave equivalent amount if they are taking care of a sick family member, or taking care of a child following the child's school closing for up to 10 days. The sick-leave equivalent amount is the lesser of average daily self-employment income or either (1) $511/day to care for the self-employed individual or (2) $200/day to care for a sick family member or child following a school closing, paid under the EPSLA.
- Self-employed individuals can also receive a credit for as many as 50 days multiplied by the lesser of $200 or 67% of their average self-employment income paid under the EFMLA.
- Self-employed individuals who also receive qualified sick leave wages from an employer will need to reduce the qualified sick leave equivalent amount by the excess of the combined qualified sick leave wages and sick leave equivalent over the maximum allowable credit ($511 per day or $200 per day). If the individual is already receiving the maximum sick pay amounts from an employer then there is no additional credit.
- Self-employed individuals will receive the credit when they file their 2020 Individual Tax Return (1040). In order to receive some relief sooner self-employed individuals can reduce their quarterly estimates for 2020.