Coronavirus: Families First Response Act (Clayton & McKervey)

March 20, 2020 - Clayton & McKervey PC

PrimeGlobal continues to monitor and assess new developments pertaining to the Novel Coronavirus. Keeping our members up to date on the latest information and approach to help reduce risk is a priority. You can find more information on PrimeGlobal's dedicated page HERE> PrimeGlobal member firm Clayton & McKervey discusses the Families First Coronavirus Response Act. 

Coronavirus has affected almost all facets of life.  The stock market has plummeted, schools have closed, church services have been canceled or are being live-streamed, sporting events and concerts are canceled, travel is restricted, and toilet paper has become a scarce commodity.  The virus has changed almost every element of American life!  In response to this, the House of Representatives has passed the Families First Coronavirus Response Act.  The Senate is currently negotiating certain aspects of the bill, but we expect something will be passed relatively soon.

Major provisions of the bill (as currently drafted) that have the biggest impact on business owners include:

  • Employers with 50 or more employees are required to provide two weeks of paid emergency sick leave at 100% of regular pay for issues related to coronavirus.
  • Employers with 50 or more employees are also required to provide 90 days of family and medical leave at not less than 2/3 of regular pay. Regular pay is determined based on hours the employee would otherwise normally work.  The bill includes specific provisions for employees whose hours vary from week to week.  There have been some expanded definitions around who qualifies compared to standard FMLA rules.
  • To help offset the cost of emergency paid sick leave, a payroll tax credit is available to employers equal to 100% of qualified emergency sick leave wages paid. The credit cannot exceed $511 per day for each employee emergency sick leave applies to.  Credits generated in excess of employer payroll taxes are refundable.

Other provisions of the bill, which may benefit your workforce, include:

  • Enhanced unemployment insurance for employees who lose their jobs or are laid off due to the coronavirus outbreak.
  • Funding and waivers to allow schools to continue to provide meals to students while schools are closed due to the outbreak. In addition, there have been enhancements to SNAP and support for food banks.
  • Requires private health plans to provide coverage for coronavirus diagnostic testing at no cost to the consumer and increases funding for Medicaid programs.

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Clayton & McKervey PC

Headquartered near the international border of the U.S. and Canada, Clayton & McKervey is a Detroit-based, full-service accounting and business advisory firm focused on global business. The firm’s clientele includes closely held, middle-market, growth-oriented companies. Since 1953, Clayton & McKervey has created a strong reputation, both domestically and internationally, with four types of clients, U.S. entities with operations in other countries, foreign entities expanding to the U.S., businesses with international growth plans and clients in need of transfer pricing service.

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