You have likely heard about, and may be following, the economic stimulus bill that the U.S. House of Representatives passed last week and that was endorsed by President Trump. At this time, the bill has not moved through the Senate and to the President’s desk. Given this, the information below is likely to change.
Since we are receiving many questions on this topic, we want to highlight the current form of the bill for you. As this evolves and further information is available, we will continue to update you and be available to assist you with planning for these considerations. Please find below a summary of key provisions:
- Coronavirus Emergency Leave: This will create an emergency paid leave program. Private sector employers with fewer than 500 workers will be required to provide 2 weeks of paid sick leave for the general employee base. In addition to this as an extension to Family Medical Leave Act (FMLA), an additional 10 weeks of paid leave limited to workers caring for children whose school or daycare has been closed as a result of the coronavirus.
- Small businesses with less than 50 employees are exempt from the paid sick leave provisions.
- Employer Tax Credits: This measure will provide payroll tax credits to employers to cover wages paid to employees while they are taking time off under the bill’s sick leave and family leave programs.
- The payroll tax, which funds Social Security, is a 6.2% levy on wages imposed on both employers and employees. The employer’s share would be provided relief while the employees’ share would not be affected.
- The sick leave credit for each employee would apply to wages of as much as $511 per day while the employee is receiving paid sick leave to care for themselves or $200 if the sick leave is to care for a family member or child if their school is closed. The limit would be the excess of 10 days over the aggregate number of days taken into account for all preceding calendar quarters.
- The FMLA credit for each employee would apply to wages of as much as $200 per day while the employee is receiving paid leave or an aggregate of $10,000.
- The credit would be refundable if it exceeded the amount the employer owed in payroll tax.
- There are also provisions for unemployment benefits to help workers terminated because of the coronavirus.