Whether you’re a small business owner, a W2 employee, or a self-employed freelancer, it’s important to understand the benefits available in the event that you, one of your family members, or one of your employees contracts COVID-19. The Families First Coronavirus Response Act was signed into law on March 18, 2020, and addresses the paid sick leave, insurance coverage of coronavirus testing, nutrition assistance, and unemployment benefits. This Act is the second major legislative initiative to address COVID-19, after the first was signed on March 6 to provide emergency funding relief for domestic and global efforts. The main impacts on small businesses and employees include the following.
- Under the Families First Coronavirus Response Act employees of businesses with fewer than 500 employees, will be given paid sick leave for two to 12 weeks. Employers will be fully reimbursed by the federal government within three months via 100% tax credits.
- Single household workers are eligible for 80 hours of sick leave with full pay, capped at $511 per day, or a collective $5,110 per worker, if they are unable to come into work or work remotely due to self-quarantine, Covid-19 medical treatment, are at risk for shedding viral debris, or are mandated to remain quarantined by the government. Part-time workers will receive a proportionate share of the benefits above.
- If you are currently staying home to care for someone who has been infected by the coronavirus or is suspected of having it, or for a child whose school or daycare is closed, the two weeks of sick pay will be two-thirds of compensation and capped at $200 a day or an aggregate $2,000 per worker.
- Sick-leave and family-leave payments mandated by the Act are exempt from the 6.2% Social Security tax component of the employer’s federal payroll tax that normally applies to wages. Employers must pay the 1.45% Medicare tax component of the federal payroll tax, but they can claim a credit for that outlay.
To get a better idea of how the Families First Coronavirus Response Act will impact small businesses owners and self-employed people, read this article by MarketWatch.
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