Families First Coronavirus Act – Payroll Guidance – What You Need to Know


On March 18, 2020 President Trump signed the Families First Coronavirus Act into law and employers are required to implement these changes by April 2, 2020.

This serves as an amendment to the original Family Medical Leave Act (FMLA) and puts in place a new law for emergency paid sick leave.

The full Families First Coronavirus Act can be viewed at https://www.congress.gov/bill/116th-congress/house-bill/6201/text.

IRS News Release: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

Which employers are required to abide by the new laws?

All public and private employers with up to 500 employees must notify employees with a Notice of their rights within 7 days of enactment.

*This Notice will likely be provided by the government and is not yet released.

Emergency Paid Sick Leave (EPSL)

Which employees are eligible for the Emergency Paid Sick Leave (EPSL)?

Regardless of length of employment, employees are entitled to the paid sick leave if they are unable to work or telework for the following reasons:

What sick leave is available?

Full-time employees: eligible for up to 2 weeks (80 hours) of paid sick leave at 100% of the employee’s pay for the reasons 1-3 & 6. Employees are eligible for up to 2 weeks (80 hours) of paid sick leave at 2/3 the employee’s pay for reasons 4&5.

Part-time employees: eligible for the number of hours equal to the average number of hours they work over a 2-week period.

What if the employee’s hours vary?
Use the last 6 months of payroll information to determine an average.

Is there a benefit to employers?

Yes, there is a tax credit that is available for employers. Employers can receive a tax credit up to a maximum of $511 per day for payment to an employee with illness, $200 per day if the employee is on leave to care for a family member, and a tax credit of up to $200 per day or $10,0000 aggregate for paid Emergency FMLA to employees. Eligible employers are entitled to additional credit based on costs for health insurance for the eligible employees during the leave period.

Can I make my employees use other leave prior to providing EPSL?

Short answer? No. However, this does not have to be paid out on termination of employment.

What if an employer doesn’t comply?

Employers who retain their staff and are found in non-compliance are subject to penalties similar to noncompliance in paying minimum wage.

Emergency Family Medical Leave Expansion Act (FMLA)

The Emergency expansion of the FMLA provides 12 weeks of job-protected leave for employee’s due to certain conditions detailed below (ending December 31, 2020). For employers, the first 10 days of the Emergency FMLA can be unpaid, however employees can choose to use any accrued paid time off. After the first 10 days, the remainder of the leave period must be paid.

For additional information, please visit https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave.

Unemployment Claims

We have had numerous inquiries on if employees can claim unemployment during this time. While we are answering your questions as they come in, we urge you to continue checking the states unemployment website as they are updating their terms and verbiage frequently. We have noticed quite a few changes this past week and want to make sure everyone continues to refer to the website for the most up to date information for their staff.

Per the address on 3/23/2020, the Maryland Secretary of Labor stated that those that are not terminated but employers are closed due to Covid-19 can seek unemployment benefits.

Work Sharing (An Alternative to Layoffs)

For information on Maryland’s Work Sharing Unemployment Insurance Program please visit http://www.labor.maryland.gov/employment/worksharing/.

COVID-19 Layoff Aversion Fund 

This award can minimize the need for layoffs with an award up to $50,000 per applicant. Please visit http://www.labor.maryland.gov/employment/covidlafund.shtml for additional information and application.

For assistance in applying, please contact your client representative.

Liability Insurance

Just a friendly reminder that if you have changed your business model, you may need to adjust your liability insurance to ensure you are covered under your new business operations.

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About Us:

Faragalla and Associates is a full-service public accounting firm in Frederick Maryland specializing in caring about our clients.  We look for both preexisting and new legislation that can benefit our clients while maintaining a local firm culture.

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