Consider this before laying off employees and terminating benefits during COVID-19 pandemic
Families First Coronavirus Response Act (FFCRA) passed into Law
On Wednesday March 18, 2020 the United States Senate passed the FFCRA and President Trump signed the bill into law Wednesday evening. The FFCRA includes several provisions to protect American workers and assist employers in providing emergency paid sick leave, as well as paid family leave in the case of school closures, for working families impacted by the Coronavirus pandemic and is to remain in effect until December 31, 2020.
The FFCRA requires employers with fewer than 500 employees to provide paid sick leave and paid family leave. The FFCRA may provide the employer with a refundable payroll tax credit to cover 100% of the cost of wages paid to their employees. Employers with fewer than 50 employees must apply for a hardship exemption in order to qualify for the refundable payroll tax credit.
Paid Sick Leave
Employers are required to offer 10 days of paid sick leave for Coronavirus-related reasons (existing leave offered can count toward the 10 days). If the paid sick leave is for an employee who is sick or seeking a diagnosis, the benefit must replace all of the employee's wages up to a maximum benefit of $511 per day. 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. The paid sick leave credit for employers offsets 100% of the employer costs for providing mandated paid sick leave. The credit also offsets the employer contribution for health insurance premiums for the employee for the period of the paid sick leave.
Paid Family Leave
Employers are required to offer 12 weeks of paid family leave for employees who have been employed for at least 30 days with a minor child in the event of the closure of the child's school or place of care. The first 10 days are unpaid, but the employee can overlap this with the 10 days of paid sick leave noted above. This benefit must replace at least two-thirds of the employee's wages up to a maximum of $200 per day. The paid family leave credit for employers offsets 100% of employer costs for providing mandated paid family leave. The credit also offsets the employer contribution for health insurance premiums for the employee for the period of the paid family leave.
This action taken by Congress follows several pieces of emergency guidance released by the Trump Administration. We are expecting more action from Congress and the Trump Administration to address other aspects of the Coronavirus pandemic.
Our membership colleagues at NAHU are continuing to monitor the Coronavirus pandemic and informing us of any implications to our valued clients. Our team at Eureka Insurance Solutions will continue to provide you with timely updates as they become available.