Washington, D.C.—Congress passed the second piece of legislation in response to the coronavirus on March 18. In addition to offering free testing for COVID-19, it also includes:

• Emergency paid sick leave: Small businesses will be required to provide two weeks of paid sick leave to an employee that:
  • Has a current diagnosis of COVID–19, or is under quarantine at the instruction of a health care provider, employer, or a local, State, or Federal official.
  • Is engaged in caregiving for an individual who has a current diagnosis of COVID–19 or is under quarantine.
  • Is engaged in caregiving, because of the COVID–19-related closing of a school or other care facility or care program, for a child or other individual unable to provide self-care.
  • This does not apply to businesses with over 500 people and small businesses with under 50 employees may avoid the requirements if they “would jeopardize the viability of the business as a going concern”. Treasury has yet to clarify how these exemptions will be made.
  • These provisions would expire at the end of calendar year 2020.
• Family medical leave: The bill expands the Family and Medical Leave Act to include leave needed to care for an employee’s child whose school or care provider is closed due to COVID-19. This leave can be used by employees who have been employed by their current employer for at least 30 days. This applies to any private sector employers under 500 employees.
  • The first 10 days of FMLA leave may be unpaid — beyond that time employers must compensate employees for the remainder of FMLA-leave taken (up to 10 work weeks) at 2/3 of their regular rate of pay.
  • FMLA paid leave is capped at $200 per day and $10,000 per employee total.
• Tax credits for paid family and medical leave: The legislation has a refundable tax credit equal to 100% of paid family or medical leave wages paid by the small business each quarter. The credit can be used against the employer’s social security taxes and applies to amounts paid to employees who are sick or quarantined. A smaller credit applies to amounts paid to employees caring for a family member or for a child whose school or place of care has been closed. Individuals who are self-employed also qualify for refundable credits. The tax credits would offset not just the 6.2% Social Security portion of payroll taxes on affected wages, but also the separate 1.45% Medicare tax. Limits apply.
• Emergency unemployment stabilization
  • Provides $1 billion for emergency grants to states for activities related to processing and paying unemployment insurance benefits.
  • $500 million would be used to provide immediate additional funding to all states for staffing, technology, systems, and other administrative costs, so long as they met basic requirements about ensuring access to earned benefits for eligible workers. Those requirements are:
    • Require employers to provide notification of potential unemployment insurance eligibility to laid-off workers.
    • Ensure that workers have at least two ways (for example, online and phone) to apply for benefits.
    • Notify applicants when an application is received and being processed and if the application cannot be processed, provide information to the applicant about how to ensure successful processing.
  • $500 million would be reserved for emergency grants to states which experienced at least a 10% increase in unemployment.
  • States that experience an increase of 10% or more in their unemployment rate (over the previous year) and comply with all the beneficiary access provisions will qualify for 100% funding for Extended Benefits.
  • Extended benefits are triggered when unemployment is high in a state and provide up to an additional 26 weeks after regular unemployment insurance benefits exhausted. This section also suspends the financial penalty for states that waive the usual one-week waiting period for benefits.