Earlier today, the Senate passed H.R. 6201, the Families First Coronavirus Response Act by a vote of 90-8. Late this evening, the President signed it into law. In addition to addressing immediate public health issues, the legislation includes key provisions impacting employers. We summarize below critical provisions relating to paid sick leave, family medical leave and unemployment insurance. Our summary is based on the version of bill passed by the House over the weekend, as the Senate version has yet to be published. We will keep you updated on any developments.
The emergency leave provisions only apply to employers with fewer than 500 employees. The bill does not exempt small businesses with fewer than 50 employees. Businesses with fewer than 50 employees can only qualify for a narrow exemption if the Department of Labor determines that providing these benefits would jeopardize the viability of the business. Local, state and, in certain instances, federal government employees are also covered. Employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are also covered.
Employers initially front the cost of emergency paid sick leave and family medical leave but will be fully reimbursed through a refundable tax credit that counts against employers’ payroll tax.
The legislation provides $1 billion in emergency unemployment insurance (UI) relief to the states: $500 million for costs associated with increased administration of each state’s UI program and $500 million held in reserve to assist states with a 10 percent increase in unemployment. Besides the necessary increase in unemployment, in order to receive a portion of this grant money, states must temporarily relax certain UI eligibility requirements, such as waiting periods and work search requirements.
Governor Pritzker announced preliminary plans for assistance for those who will need unemployment benefits. See information through the link HERE.
The new federal legislation will go into effect 15 days after the date of enactment and expire on December 31, 2020.