The Internal Revenue Service has announced implementation of paid sick leave and child care leave provisions of the Families First Coronavirus Response Act. Employees of employers with fewer than 500 employees can receive two weeks (up to 80 hours) of paid sick leave at 100% of their pay when the employee is unable to work because the employee is quarantined and/or experiencing COVID-19 symptoms, and is seeking a medical diagnosis. An employee who is unable to work because of the need to care for an individual subject to quarantine, or to care for a child whose school is closed or child care is unavailable because of COVID-19 can receive two weeks (up to 80 hours) of paid sick leave at 2/3 of the employees pay.
An employee who is unable to work because of the need to care for a child whose school is closed or child care is unavailable because of COVID-19 can receive up to an additional ten weeks of paid family and medical leave at 2/3 of the employees pay. Businesses with fewer than 50 employees are exempt from this provision if the leave would jeopardize the ability of the business to continue.
The leave will be paid for by a payroll tax credit deducted from payroll tax payments. The child care leave provision will be paid for by an income tax credit that covers both the payment to the employee and the cost to maintain health insurance. Self-employed individuals are entitled to equivalent credits. (IR 2020-57, March 20, 2020.)