What the New Coronavirus Law Means for Dealers

Automotive Training Network -

On Wednesday, President Trump signed the $100 billion Families First Coronavirus Response Act into law. Here’s what that means for dealerships.

 

Emergency Family and Medical Leave Expansion Act

What is it?

An amendment to the Family and Medical Leave Act, this act requires eligible employers offer paid FMLA leave under certain conditions through December 31, 2020. As with existing FMLA leave, the term of the leave is a maximum of 12 weeks. The first 10 working days of the leave can be unpaid, but employees can use existing paid time off during this period at their discretion.

Eligibility

Employees

To be eligible, employees must have been employed for at least 30 days and have one of the following reasons for leave:

  1. Recommendation/order from a public official or health care provider to quarantine
  2. To care for a family member that had a recommendation/order from a public official or health care provider to quarantine
  3. To care for a child under 18 years old if the school or place of care has been closed or is unavailable
Businesses
  • All businesses with fewer than 500 employees
  • Businesses with fewer than 50 employees are exempt from these requirements if such requirements would jeopardize the viability of the business as a going concern
  • Businesses with fewer than 25 employees may not be obligated to return the employee to the same or equivalent position following leave if all of the following are met:
    • The position no longer exists due to economic conditions
    • The employer makes reasonable efforts to restore the employee to the same or equivalent position
    • The employer makes reasonable efforts to contact the employee if an equivalent position becomes available for a certain period following leave

Emergency Paid Sick Leave Act

What is it?

This act requires eligible employers to provide eligible employees paid sick leave through December 31, 2020. This is in addition to existing policies, meaning any paid sick time offered through this program is added to the paid sick time the employee is already eligible to receive. Full-time employees are entitled to 80 hours and part-time employees are entitled to a number of hours equal to the number of hours that the employee works on a 2 week average.

Eligibility

Employees

All employees are eligible regardless of length of employment if they meet one of the following conditions:

  1. Under quarantine due to being diagnosed with coronavirus 
  2. To obtain a diagnosis if they are experiencing symptoms
  3. Public official or health care provider recommendation to quarantine due to potential exposure or symptoms of coronavirus
  4. To care for or assist a family member who has any of the first three conditions
  5. To care for a child under 18 years old if the school or place of care has been closed or is unavailable
Businesses
  • All businesses with fewer than 500 employees

 

Tax Credits for Paid Sick and Paid Family and Medical Leave

Employers will receive a payroll credit for eligible wages paid under this act. 100% of the wages paid under both acts will be eligible for payroll credit up to $200 per worker per day. That number climbs to $511 per day for sick leave paid for employees that were diagnosed with coronavirus, under quarantine recommended by a health care or public official, or those who had symptoms and sought testing. This credit will apply for 10 days of sick leave (up to 80 hours) and for up to $10,000 for paid family and medical leave (50 days at $200 per day). The credit will be applied each calendar quarter to the employer portion of eligible federal taxes. Any remaining credit will be treated as an overpayment and be reimbursed to the employer.