The Families First Coronavirus Response Act (H.R. 6201) passed Congress and was signed into law by President Trump.
- Summary of H.R. 6201 from House Appropriations Committee
On March 20, the U.S. Treasury Department, Internal Revenue Service, and Department of Labor announced the creation of two new refundable tax credits that will be available to businesses and tax-exempt organizations with fewer than 500 employees. These measures are designed to immediately and fully reimburse those employers dollar-for-dollar for the cost of providing coronavirus-related leave to their employees.
Employees will receive up to 80 hours of paid sick leave at 100 percent of normal pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.
The Act also provides expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable. (Employers with fewer than 50 employees may seek an exemption from the child care provision if the viability of business would be threatened.)
Employers will receive 100 percent reimbursement for paid leave pursuant to the Act, including health insurance costs, with no payroll tax liability.
Direct Payments to Workers
The CARES Act includes provisions for direct payments to Americans. Those who are making up to $75,000 (individual) or $150,000 (married) would receive $1,200 in cash payments with an additional $500 per child under age 17; those making over these amounts would see a decreased payment. Payments will be made automatically using the payment or address information on file with the Internal Revenue Service for tax returns submitted in 2018 or 2019. Those who are not required to file a tax return will still be eligible, but may need to take additional steps to receive their payment.
The CARES Act includes a temporary Federal Pandemic Unemployment Compensation (FPUC) of $600 per week for any worker eligible for state or Federal unemployment compensation benefits through July 31, 2020. The FPUC is in addition to and at the same time as regular state or Federal unemployment compensation. The Act also provides some coverage to those who would not normally be eligible for benefits—such as self-employed individuals and independent contractors—as long as their unemployment was connected to the COVID-19 pandemic.
The Federal government is providing full funding for states with Short-Time compensation or “work sharing” programs, in which employers voluntarily make an agreement with the state
unemployment office to prevent layoffs by reducing employee hours; states usually bear the full cost of these arrangements. The CARES Act also enables states to provide an additional 13 weeks of emergency unemployment compensation for workers who exhaust regular benefits.
Nonprofit organizations that self-insure rather than pay state unemployment taxes (SUTA) may only be eligible to receive half of the costs of benefits provided to their laid-off employees. In addition, employees of very small nonprofits that are exempt from unemployment laws (generally those with fewer than four employees) are also not included, except in the event of a declared “major disaster,” which has only been announced for selected states. (See additional information from the National Council of Nonprofits.)
- Provisions Related to Unemployment Compensation Fact Sheet and FAQ from House Ways and Means Committee