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March 30, 2020

Additional Information On Labor Provisions In Second COVID-19 Stimulus Bill

As a reminder, the Families First Coronavirus Response Act, the second stimulus bill designed to address the COVID-19 pandemic will go into effect on April 1, 2020. This legislation institutes free coronavirus testing, establishes paid leave policies, enhances federal unemployment insurance, expands food security initiatives, and increases federal Medicaid funding.  The U.S. House of Representatives has provided a detailed summary of the paid leave provisions in the bill. This summary also includes an FAQ that MSCI encourages all members to review. It is available at this link. The following employees are eligible for leave:

  • Employees at companies with fewer than 500 employee;
  • Employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan; and
  • Local, state, and federal government employees.

They are eligible for:

  • Eligible full-time employees are entitled to two weeks (80 hours) of fully paid time off (up to $511 per day) to self-quarantine, seek a diagnosis or preventive care, or receive treatment for COVID-19.
  • Eligible part-time employees are entitled to fully paid time off (up to $511 per day) for the typical number of hours that they work in a typical two-week period to self-quarantine to seek a diagnosis or preventive care, or receive treatment for COVID-19.
  • Eligible full-time employees are entitled to two weeks (80 hours) paid time off at two-thirds of their regular pay (up to $200 per day) to care for a family member or to care for a child whose school has closed, or if their child care provider is unavailable due to COVID-19.
  • Eligible part-time employees are also entitled to the typical number of hours that they work in a typical two-week period at two-thirds of their typical pay (up to $200 per day) to care for a child whose school has closed, or if their child care provider is unavailable, due to COVID- 19.

Employers initially front the cost of emergency paid sick leave but will be fully reimbursed by the federal government within three months. The reimbursement will cover both the wages paid and the employer’s contribution to employee health insurance premiums during the period of leave. Employers will be reimbursed through a refundable tax credit that counts against employers’ payroll tax, which all employers pay regardless of non-profit/for-profit status. Employers will submit emergency paid sick leave expenses as part of their estimated quarterly tax payments. If employer’s costs more than offset their tax liability, they will get a refund from the IRS. Click here for more information about how these provisions will work. Click here for a helpful fact sheet from Bloomberg that explains how the tax credits will work.

The. U.S. Department of Labor’s Wage and Hour Division (WHD) has announced how these paid leave mandates will work. They have also shared fact sheets for how this will affect employees, how it will affect employers and a helpful FAQ sheet for employers. The DOL has also requested that the public submit questions, concerns and recommendations for the implementation of the FFCRA. Interested parties can find more information and provide input at the WHD’s online submission here. The new guidance includes two new posters, one for federal workers and one for all other employees, that will fulfill notice requirements for employers obligated to inform employees about their rights under this new law. It also includes a Field Assistance Bulletin describing WHD’s 30-day non-enforcement policy. The new guidance addresses critical issues such as whether employers may post required notice electronically, whether employers must provide notice of this law to recently laid-off individuals, when FFCRA applies to federal workers and when enforcement of the new rules will begin.

Before Congress passed this legislation, MSCI and dozens of other organizations had sent a letter regarding the family and medical leave provisions. That letter is here.

On March 30, the S-Corp Association held a webinar explaining the small business provisions included in the COVID-19 related stimulus packages passed by the U.S. Congress. The slide deck from the presentation is available here and a recording is here. MSCI is grateful to the S-Corp Association for allowing us to share this resource with our members. The webinar addresses:

  • Mandated Leave Details
  • Delayed Tax Filing & Payment
  • Delayed Payroll Tax Payments & Other Tax Provisions
  • New Small Business Loan Program

The contents of the presentation are not legal advice or opinions and are intended to convey general information only. An attorney should be contacted for advice on specific legal issues.