Coronavirus Response Act Requires Businesses to Pay Sick Leave for Covid-19

Families First Coronavirus Response Act

The Families First Coronavirus Response Act affects all employers with 1-500 employees. And it also includes protections for those who are self-employed. President Donald Trump signed the Act March 18. And it will become law in 15 days.

The act spells out the requirements. Employers pay sick leave for those affected by COVID-19. But fortunately they receive a refundable tax credit equal to 100 percent of the family leave wages that were paid. The Act expires December 31, 2020. As a result, it sunsets after that date.

Families First Coronavirus Response Act

Check out these key components of the Families First Coronavirus Response Act you need to know:

How Employees Qualify

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 medical diagnosis.
4. The employee is caring for the employee’s son or daughter, if the child’s school or childcare facility has been closed or the child’s care provider is unavailable due to Covid-19 precautions.

How Much Does the Employer Pay?

There is a 10-day waiting period before the benefit begins. Employees can use existing sick, personal or vacation days to cover this period, but the employer can’t force employees to apply those days. Only those who have been employed for 30 calendar days qualify.

Some employees take leave to care for children whose schools or childcare facilities close. They receive 2/3s of their regular rate of pay. And see a maximum or $200 per day, and no more than $10,000 total. The adjusted hourly compensation can’t be less than the minimum wage rate.

Full-time employees who feel ill receive 80 hours paid sick leave. But this only applies if they are under a quarantine or isolation order. Though it also applies to those experiencing symptoms, or caring for someone who is under a quarantine or isolation order. Part-time employees receive paid sick leave weekly. Officials base the amount of pay on the average number of hours they work over a two-week period.

Employers Will Get Tax Credits

Tax credits for employers come out to 100 percent of what was paid. As a result, employers receive a refundable tax credit. It equals 100 percent of family leave wages that were paid.

What If You’re Self-Employed?

So you regularly carry on a trade or business as a self-employed individual. This entitles you to receive paid leave. As a result, the new law treats you just as if you were an employee of an employer.

How can you be paid? In the case of an eligible self-employed individual, you will get credit against the self-employment tax which is imposed by the IRS. The credit amount would be an amount equal to the qualified sick leave.

What Happens After Corona Virus Response Act Ends?

Your may find your business struggling financially after the Corona Virus Response Act ends. Must you rehire your employees — no matter what? Employers with fewer than 25 employees need not restore employees to their previous positions. But those with more than 25 employees must reinstate employees.

Keep Accurate Records

Document everything. An employer must provide thorough documentation of the process. Otherwise forget about receiving credit for dispersing sick pay without .

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Lisa Price Lisa Price is a freelance writer living in Barnesville, Pennsylvania. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She has worked as a trucking company dock supervisor, newspaper circulation district manager, radio station commercial writer, assistant manager of a veterinary pharmaceutical warehouse and newspaper reporter.

4 Reactions
  1. Good legislation. Great that the parties were able to work together in a timely manner for something good for the whole country.

  2. Employees need the peace of mind that they can stay at home without any worries of losing their job. It is an important time for choosing to care instead of giving in to the fear.

  3. As a small business owner, this does not offer much.

    We instituted work from home before the city required because I wanted to keep my employees healthy. But as the pandemic has worsened, the business has dried up. Our sales are down 70% from last month, and that last 30% thats left is in large part carryover sales from the previous month. I fully expect April to be only a small smattering, maybe about 5% of our normal sales. I have staff that I don’t want to lay off, but I neither have enough money coming in to pay them, nor is there enough work for them given that the business has dried up. I have one employee who is starting to show symptoms of COVID at home and also has a sick family member. I don’t want her to be working when she needs to take care of family at home and is not feeling well herself. Originally she might be eligible for Paid Family leave to give her income when she takes time off where insurance company can cut her some checks, which would give the business some relief and maybe allow me to keep more of my other staff. Now, with this bill, the insurance company is cut out of the picture, and instead, I have to foot the bill when I’m already struggling to make ends meet. Sure, I’ll get a tax credit from the government, but a year later in tax time, so essentially, the government is asking struggling small businesses to foot the bill for them for a year, while they get to be a hero that saved the day for the workers. I technically can qualify for an exemption because I am a very small business well under 50 employees, but 1) the onus is on my to exempt my business when I’m already trying to keep my business from crumbling, and 2) if I do exempt myself, what happens to my employee who’s sick? At least before she qualified for the Paid Family Leave payments while she’s out – what does she get now?

  4. I own a bakery with two employees, I cannot afford to pay two weeks because I need to hire someone who may cover for the employee in sick leave. We micro business leave with the money day by day.