Important Update for Agents: Families First Coronavirus Response Act

On March 18, the federal government passed the Families First Coronavirus Response Act (H.R. 6201), an emergency bill releasing $250 billion for direct payments to Americans on April 6 and May 18.

Along with the payments, the bill also requires mandatory paid sick leave for employees, expands unemployment insurance, provides free coronavirus testing, enhanced food assistance programs, additional protections for health care workers, and a small business interruption loan program.

Under the new law, employers are required to offer 10 days (80 hours) of emergency sick leave for reasons relating to COVID-19.  If the sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all the employee’s wages up to a maximum of $511 per day ($5,110 in aggregate).  If an employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day ($2,000 in aggregate).

The Act also requires that small-business employees be given the right to take up to 12 weeks of job-protected family leave if the employee or family member is in coronavirus quarantine or if the school or child-care location of the employee’s child is closed due to coronavirus. In this situation, the employer must pay at least two-thirds of the employee’s usual pay, up to a maximum of $200 per day ($10,000 limit). The first 10 days may be unpaid (employee can use existing paid leave).

Payroll tax credits will be provided to employers with up to 500 employees to cover 100% of the cost of the paid sick leave for absences related to COVID-19.  Tax credits will be offered to offset the employer contribution for health insurance premiums for the employee for the period of leave.  Self-employed individuals will also be eligible for tax credits.

Employers with fewer than 50 employees may apply for a hardship exemption from the Secretary of Labor if they can show that the paid sick leave would jeopardize their business.

In addition to the federal emergency aid, individual states have announced various new legislation, resources, and assistance for impacted business and workers.  Check your state’s Department of Labor, Department of Revenue, unemployment division, insurance division and other commerce-related websites for information specific to your state.

Many businesses are concerned about how they will survive and will want to fully understand the effect of this legislation to make payments and to seek reimbursement from the government.  Note that employees that have been furloughed are still employees and qualify for payments, while employees terminated before the act comes into force will not.

All businesses must post a copy of the FFCRA requirements in a conspicuous place – the DoL will issue a model notice no later than March 25th.

Click either of the links below for more resources:

If you have any questions about this communication, please feel free to reach out to either Katie Miller or Nick Forside on LeClair Group’s Employee Benefits team.