It’s been about a week since the Families First Coronavirus Response Act was passed. I have read the act itself, as well as recent press releases on the Act from the IRS and from the Department of Labor.
Still, because the Act was written very quickly and amends existing law, I have not yet been able to find a quick and easy reference for small business owners regarding how the law applies to them. So, I made one.
Please feel free to use and share my Coronavirus Paid Sick Leave Cheat Sheet as a reference for employers with under 500 employees. I hope that it is helpful to all of you during these crazy times.
Now that I have had some time to analyze the law, here are my key takeaways:
- Most small businesses are going to have to make some payments under this law (so, you need to understand it.)
- Small businesses that make payments under this law will get the money back around the time of the next quarterly payroll tax filing. If your business cannot afford to wait to be reimbursed by the federal government through payroll tax and you have less than 50 employees, you can apply to be exempt from paid sick leave.
- The law is effective starting on April 2. However, the IRS has said that they are going to allow for a 30 day non-enforcement period. (It is not clear if the 30-day period begins on April 2, or if it has already begun when the law was passed.)
- Due to a weird quirk of the law, if you have an employee who has to miss work to care for their child because school or daycare is closed, they would be eligible for two weeks of paid sick leave at their regular pay rate AND would be eligible for another ten weeks of paid leave at 2/3 of their regular rate, for a total of up to twelve weeks of paid leave.
- If you are an employee and you are feeling sick, there is a big difference between “having Covid-19 symptoms and seeking medical diagnosis” versus “experiencing similar symptoms”. The former pays the employee their full pay rate for two weeks, while the latter pays the employee only 2/3 of their pay rate for two weeks.