President Trump is Expected to Sign the Bill
This afternoon the Senate gave final approval to emergency legislation that would, among other things, guarantee sick and family leave for certain workers directly affected by the coronavirus. President Trump has promised to quickly sign the bill into law.
The Families First Coronavirus Response Act (H.R.6201) was introduced in the U.S. House of Representatives late last week and swiftly approved by a vote of 363-40 early Saturday morning. Despite concerns from some members, the Senate passed the bill today by an overwhelming vote of 90-8.
The bill requires businesses with fewer than 500 employees to provide two weeks (or 80 hours) of paid sick leave to employees that have been on the job for at least 30 days. Leave would be prorated for part-time workers. This leave must be for coronavirus-related reasons such as quarantine or necessary medical evaluations. It may also be taken at two-thirds an employee's pay to care for a sick family member or a child whose school has closed, or when a childcare provider is unavailable, due to the coronavirus.
The Family Medical Leave Act (FMLA) is also expanded to provide a total of three months (or 12 weeks) of job-protected family medical leave related to the coronavirus. The first two weeks (14 days) may be unpaid, or employees may use other available leave to cover it. The remaining leave is provided at two-thirds of an employee's pay.
Businesses with 500 or more employees are exempt from the sick and family medical leave requirements. Very small businesses with 50 or fewer employees may seek a hardship waiver from the federal government. To help soften the impact, the bill would allow affected businesses to take a quarterly tax credit against payroll taxes up to an amount that does not exceed the business's total tax liability for that quarter.
These requirements would go into effect 15 days after enactment and expire on December 31, 2020. Note that the bill includes other provisions related to unemployment insurance, free coronavirus testing, and other matters (see links to bill text and summary documents at the end of this email).
There are many unanswered questions on how these new leave requirements and other provisions will be implemented. During Congress' swift consideration of this legislation, several lawmakers raised concerns regarding the specifics as well. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell felt it was urgent to get something into law immediately. They have promised to address outstanding concerns in the next coronavirus bill.
Work now begins on this much larger measure, which is shaping up to be a $1 trillion economic stimulus and relief package. Senate Republicans are taking a lead role in drafting this bill, with input from the Trump administration. NEFI will continue to keep members and supporters up-to-date.
Click here for bill text.
Click here for the official legislative summary.
Please note: This is a summary of pending legislation. It is not intended as tax guidance or legal advice. We recommend that you consult with a qualified tax or legal professional regarding how this legislation might impact your business and employees.