Coronavirus Relief Legislation Targets Family & Sick Leave: Stimulus Package in Progress
Late Wednesday night, President Trump signed into law a coronavirus relief package with provisions targeting paid sick leave and paid family leave. The Families First Coronavirus Relief Act expands the federal Family and Medical Leave Act to include paid leave for certain COVID-19 related absences and mandatory paid sick time.
The Act provides workers at companies with 500 or fewer employees with up to two weeks of paid sick leave if they are being tested or treated for coronavirus or have been diagnosed with it. Employees would also be eligible for sick leave if they have been told by a doctor or government official to stay home because of exposure or symptoms. The Act also extends coverage for paid family leave to situations where an employee must care for a family member who is being treated for or has been exposed to the Coronavirus, including children under 18 years of age if the child’s school or place of care has been closed, or their child care provider is unavailable, due to a public health emergency. Further, the Act provides tax credits to businesses whose employees have coronavirus-related absences. The credit is limited to $511 per day in paid sick leave for the employee or $200 per day in paid sick leave with respect an event involving the employee’s family member.
For employers considering reducing employee hours, furloughing employees, or layoffs, the Act also directs the Secretary of Labor to “assist States in establishing, implementing, and improving the employer awareness of short-time compensation programs (as defined in section 3306(v) of the Internal Revenue Code of 1986) to help avert layoffs, including by providing technical assistance and guidance.” Short-Time Compensation (STC) programs allow employers to reduce employee hours, while enabling the employee to seek partial unemployment benefits for those lost hours. STC programs are overseen by the U.S. Department of Labor (DOL) and are administered by state Unemployment Insurance (UI) agencies.
Employees adversely impacted by the reduction in their hours receive a partial STC benefit proportional to the percentage of reduction from their usual hours of work. As of this writing, 27 states have STC programs that meet the federal definition. Use of STC programs may assist businesses in making personnel decisions as this fluid situation continues to unfold.
With the economic toll of this public health crisis rising, the Senate is racing to pass another relief package. President Trump’s proposal included $500 billion for two waves of direct payments to taxpayers and an additional $500 billion in loans for businesses. A draft of this legislation is expected later Thursday, March 19.