Recent federal legislation provides paid leave options for employees of some businesses. Those businesses are now required to provide certain benefits for COVID-19-related absences. Below are several frequently asked questions surrounding the new law.
What is the Families First Coronavirus Response Act?
The act was signed into law March 18, 2020, and, among other things, provides emergency paid sick leave and emergency family medical leave expansion. The act is effective April 1, 2020, and applies to leave taken between April 1, 2020, and December 31, 2020.
Who does the act apply to?
Generally, if you employ fewer than 500 employees, you are an employer that must provide paid sick leave and expanded family and medical leave. Private employers with 500 or more employees are exempt from the act. Certain employers with fewer than 50 employees may be exempt from the act’s requirements to provide certain paid sick leave and expanded family and medical leave, which is discussed in more detail below.
What does the act provide?
With few exceptions, if you employ fewer than 500 employees, you are an employer that must comply with the law. The act provides two types of leave: emergency sick leave and extended family medical leave.
Emergency Sick Leave
All employees are immediately eligible to take up to 10 days of emergency sick leave if the employee is unable to work for any of the following reasons:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
- The employee is caring for an individual who is subject to a federal, state, or local quarantine order, or the individual has been advised to self-quarantine due to concerns related to COVID-19
- The employee is caring for the employee’s son or daughter if the child’s school or childcare facility has been closed or the child’s care provider is unavailable due to COVID-19 precautions
- The employee is experiencing any other substantially similar condition specified by the Department of Health and Human Services.
Employees taking leave for self-care (described in numbers 1-3 above) are eligible to be paid at their regular rate up to $511 daily and $5,110 total. Employees taking leave for the care of others (described in numbers 4-6 above) are eligible to be paid at two-thirds their regular rate up to $200 daily and $2,000 total.
Additionally, employees who have been employed for at least 30 days may request 12 weeks of extended family medical leave if the employee is caring for a son or daughter if the child’s school or daycare provider is closed or unavailable due to COVID-19 precautions (similar to number 5 above). The first two weeks of extended leave are unpaid. The employee may, however, use any paid time off, including emergency sick leave, to cover the two-week period. After the initial two-week period, the employee is paid at two-thirds the employee’s regular rate for the remaining 10 weeks.
Do we have to tell our employees about the new leave?
Each covered employer must post in a conspicuous place on its premises a notice of the act’s requirements. For employees that work remotely, sending notice by email, posting on an employee information website, or sending by regular mail is sufficient. Here is a copy of the required posting.
I have fewer than 50 employees. Am I exempt?
Employers may be exempt from certain paid sick leave and expanded family and medical leave requirements if the employer meets the following criteria:
- Employer has fewer than 50 employees;
- Leave is requested because the child’s school or place of care is closed, or childcare provider is unavailable, due to COVID-19-related reasons; and
- An authorized officer of the business has determined that at least one of the following three conditions are met:
- The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity
- The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
Will the government repay me for any of this?
Employers are eligible for a refundable tax credit equal to 100% of qualified emergency sick leave or extended family leave wages paid. Employers can claim this credit on their quarterly employment tax returns. To assist with cash flow, employers can fund the family leave pay by accessing employment taxes that have been withheld and set aside for deposit with the IRS.
Additional guidance can be found at the U.S. Department of Labor website in addition to speaking with your local business attorney or tax professional.