Coronavirus Response Act Becomes Law for Small Businesses

On March 18, 2020, the Families First Coronavirus Response Act became a law addressing how the U.S. government will address certain matters related to Coronavirus/COVID-19 Pandemic. The Families First Coronavirus Response Act has a number of provisions regarding assistance; however, this Act does not include check payments to individuals that has been discussed as part of a relief law.

The Families First Coronavirus Response Act will specifically address actions that certain small businesses must take throughout the United States, targeting small businesses with between 50 and 500 employees. As a law, the Act only addressed companies with less than 500 employees, but the Department of Labor can (and is expected to) exempt businesses with less than 50 employees from the small business provisions described below. Currently the Families First Coronavirus Response Act requires business with less than 500 employees (and more than 50, if exempted) to immediately expand emergency paid sick leave and family medical leave.

The Act does provide for free diagnosis testing for Coronavirus/COVID-19.

Paid Sick Leave Required Under The Families First Coronavirus Response Act

The Families First Coronavirus Response Act, sick leave requirements will require all employers with less than 500 employees (and more than 50, if exempted) to provide 80 hours of sick leave pay to all full-time employees that could miss work due to an illness or the care of a family member with an illness resulting from the Coronavirus/COVID-19 virus. This Coronavirus Response paid sick leave is in addition to any other paid sick leave already be offered by each small business. Essentially, these employees will be eligible for 2 weeks of sick leave at their regular pay rate to either quarantine, or to seek a COVID-19 diagnosis or preventive care for themselves.

Family Medical Required Leave The Families First Coronavirus Response Act

The Family Medical Leave, under Families First Coronavirus Response Act, requires employers with between 50 and 500 employees to provide PAID FMLA leave to employees who are sick or caring for a family member who is sick as a result from the COVID-19 pandemic. This Coronavirus Response leave must be provided to all employees who have been with the employer for 30 days. The first 14 days of the Coronavirus Response FMLA leave may be unpaid, but after those days pay shall continue for the employee at a rate of 2/3rds of the employee’s regular rate of pay.  with 10 weeks of emergency paid leave to care for children whose schools or daycare facilities were closed. Specifically, however, quarantined employees, or those who were caring for afflicted family members, will not be eligible under the law. Under the law, healthcare providers and other first responders can also be excluded. After 10 days of unpaid leave, qualified small businesses must pay employees no less than 2/3rds of their usual pay—up to $200 per day, and $10,000 in total.

Qualified small businesses will be permitted to apply for (and could receive) tax credits for the payments under this law made with regards to the paid sick leave and FMLA as it relates to this Coronavirus/COVID-19 Pandemic. The Families First Coronavirus Response Act contains specific definitions  in order for qualified small businesses to qualify. In addition, the law provides specific limitations with regards to the tax credit that employers can receive.

Longman & Van Grack will continue to monitor the federal and state laws, and update our website with any changes for businesses and employees.

Adam Van Grack and Robb Longman and the other business law attorneys at our firm practice in all areas of business law and tax law in Maryland and Washington DC. Contact our attorneys (all still working during this pandemic) at (301) 291-5027 to discuss your business, company, tax, or coronavirus concerns one of our business law attorneys at one of our Offices in Rockville, Maryland, Bethesda, Maryland, or Washington DC.