The US Federal government has passed a Bill to help address the financial challenges Americans are experiencing as a result of COVID-19. The Bill, which applies to employers with fewer than 500 employees, has gone through several iterations as it was passed from House to Senate. It addresses the need for temporary paid employee sick and family leave, as well as other support programs to help individuals and families cope with COVID-19 disruptions.
On March 18th, the Families First Coronavirus Response Act passed the US Senate. The bill will go into effect within 15 days of its enactment.
How does the bill work?
As it stands now, the bill gives some relief to workers and their families by creating emergency paid sick leave and paid family leave in the case of school closures. The bill requires employers with up to 500 employees to provide paid sick leave and paid family leave to their employees. To cover the costs of the leave, the government will give employers a refundable payroll tax credit as well as a refundable income tax credit for self-employed individuals.
Under this bill, employers must offer:
- Two weeks (10 days) of paid sick leave for COVID-19-related reasons for eligible full-time employees. 100% of employer costs are offset for providing this mandated paid sick leave. Under the paid sick leave provision, employees who are unable to work (or telework) may take leave if they:
- are subject to a Federal, State, or local quarantine or isolation order related to COVID-19 (100% of pay capped at $511 per day);
- have been advised by a health care provider to self-quarantine due to concerns related to COVID-19 (100% of pay capped at $511 per day);
- are experiencing symptoms of COVID-19 and seeking a medical diagnosis (100% of pay capped at $511 per day);
- are caring for an individual who is subject to a quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 (2/3 pay capped at $200 per day);
- are caring for a son or daughter if the school or place of care for the child has been closed, or childcare provider is unavailable due to COVID-19 precautions (2/3 pay capped at $200 per day); or
- are experiencing any other substantially similar condition as specified by the Secretary of Health and Human Services (2/3 pay capped at $200 per day).
Under the sick leave provision, individuals who are working part time or hourly are also eligible for paid sick leave which is to equal the number of hours the employee works on average over a two-week period.
- Ten weeks of paid family leave (12 weeks total) for an employee with a minor child who is unable to work (or telework) in the event of the closure of the child’s school or place of care due to COVID-19 precautions. 100% of employer costs are offset for providing this mandated paid family leave. Under the expanded paid family leave provision, the benefits are as follows:
- The first 10 days are unpaid, but the employee can use the 10 days of paid sick leave during this time.
- The benefit must replace at least two-thirds of the employee’s wages up to a maximum of $200 per day (and $10,000 in aggregate) and reflect the number of hours an employee would otherwise be normally scheduled to work.
- This 12 week period does not extend any time under the FMLA act, it simply adds another reason for leave and specifies payment.
- The Act allows an employer of an employee who is a health care provider or an emergency responder to elect out of providing paid family leave to these employees.
- The Labor Department will have the authority to exempt from the paid family leave requirement small businesses with fewer than 50 employees if the requirement to provide leave would jeopardize the viability of the business.
Who is eligible?
To be eligible the employee must have worked at least thirty calendar days for the employer before they were impacted by COVID-19.
When do the Paid Family Leave and Emergency Sick Leave provisions expire?
Both provisions expire on December 31, 2020.
90 days delay on tax payment deadline
On March 17th, the US Federal Government has announced that Individuals and businesses will have an extra 90 days to pay the IRS if they owe additional income tax for 2019.
Normally, taxpayers owe the amount due by April 15. But as part of the Government’s response to the coronavirus, individual and small business filers will be able to defer payments of up to $1 million and corporations can defer up to $10 million without incurring interest or penalties.
In any case, taxpayers should still file their federal returns by April 15. Taxpayers can still request a six-month extension to file returns, like they could in any other year
Furthermore, the US Government has confirmed that they will be sending checks to citizens in the next 2 weeks. The amount has not been confirmed neither who will qualify for the additional stimulus money.
The Coronavirus crisis is presenting important challenges for all companies and in this context information is essential. At Auxadi we are experts in providing value added services in accounting, tax compliance and international payroll management. If you need more information, please do not hesitate to contact us.
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Head of International Payroll Management Dept. Head of US CRM Hub
All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.