Federal Paid Sick Leave Mandate with Employer Tax Credits
Yesterday, the U.S. House of Representatives approved the Families First Coronavirus Response Act (H.R. 6201). The bill includes two new paid leave mandates on employers with less than 500 employees that will have significant impacts on employers’ ability to maintain or resume operations. If passed:
- Businesses with less than 500 employees will be required to offer Family Medical Leave Act (FMLA) leave benefits to all employees. Eligible employees must have been on the employer’s payroll for 30 days.
- Employers will receive a 100% refundable tax credit from the federal government for qualified family leave wages paid by an employer for each calendar quarter, but this is capped at $200 per day and $10,000 for all calendar quarters.
- Businesses with less than 500 employees will be required to offer full-time employees 10 days (80 hours) and part-time employees a two-week hourly average of paid sick leave, on top of any other existing paid leave program, to quarantine or seek a diagnosis or preventive care for COVID-19.
- Employers will receive a 100% tax credit for all wages that are paid, but capped at $511 per day, and $7,156 altogether for each employee.
for an issue brief on the legislation from the National Restaurant Association.
The bill now heads to the Senate for consideration. It is expected the Senate will vote to pass a version of this legislation as soon as Tuesday.