On March 18, 2020, President Trump signed into law H.R. Bill 6201, titled Families First – Coronavirus Response Act (the “Act”), making it the second Coronavirus emergency aid package following the emergency funding bill, which allocated about $8 billion for Coronavirus prevention, preparation, and response efforts. The Act was passed in response to the growing health and economic crisis and will address several impacts of the COVID-19 pandemic including paid sick leave, free testing, and expanded unemployment benefits as well as provisions to expand food security initiatives and temporarily increase federal Medicaid funding.
Paid Sick/Family Leave
The Act provides a federal emergency paid-leave benefit that requires employers with fewer than 500 employees to provide two weeks of paid sick leave to employees due to any of the following reasons:
The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
The employee is caring for an individual who is subject to a quarantine or isolation or has been advised to self-quarantine by a health care provider.
The employee is caring for a child whose school or place of care has been closed, or the child care provider is unavailable, due to COVID-19 precautions.
The employee is experiencing any other condition substantially similar to COVID-19, as specified by the Secretary of Health and Human Services.
For self-employed persons falling under one of the criteria above, there will be a tax credit equivalent to the sick leave amount. The sick leave amount will be calculated based on an amount not less than 2/3 of the employee’s regular rate of pay multiplied by the number of hours the employee would normally work within a two week period, however, the amount paid cannot exceed $200 per day and $10,000 in total for an employee. Employers will receive a refundable credit against payroll taxes for the qualified sick leave wages it pays pursuant to the Act.
The Act also issues state grants to cover processing and paying unemployment insurance and raises the amount of assistance to states with a high unemployment and who have already exhausted its benefits.
The Act provides for additional funding for programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”) in order to improve food security. An emergency food assistance program is also receiving funding and will be available through September 30, 2021. Additionally, help will be given to households with a child whose school has been closed for at least five consecutive days.
In an attempt to make COVID-19 testing free for all, the Act includes several waivers so that testing costs are covered by either insurance or government programs. Through the Act, $1 billion will be given to the National Disaster Medical System for reimbursing testing costs for those without health insurance. Moreover, $60 million will go to the Department of Veterans Affairs and $64 million to the Indian Health Services. Additionally, the Children’s Health Insurance Program, will include coverage of diagnostic products and there will be a temporary 6.2 increase in federal payments to Medicaid for states.
The COVID-19 pandemic has affected humanity and businesses worldwide. Legislation like the Act provides much-needed aid to employers, employees and individuals in an effort to alleviate the global impact of this pandemic. MDO Partners is doing its part to help by working remotely, exercising social distancing and supporting our clients and friends with updated information, legal resources and guidance on COVID-19. We encourage companies and individuals to do the same and to contact us with any compliance questions or concerns on applicable laws and regulations.
About MDO Partners
MDO Partners is a boutique law firm that focuses on Corporate, International, and Real Estate Law, as well as Global Compliance and Business Ethics. The firm is comprised of a solid team of attorneys and advisors with more than 100 years of combined experience who are committed to the business goals and best interests of their clients. The firm delivers value-added services of the highest caliber and serves as a trusted advisor to its clients with a practical and business-savvy approach. For more information on MDO Partners, please visit www.mdopartners.com.