COVID-19: Emergency Paid Sick Leave and Emergency Family and Medical Leave

The Families First Coronavirus Response Act requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s Wage and Hour Division administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.

 Emergency Paid Sick Leave ActEmergency Family and Medical Leave
Worker EligibilityFull-time and part-time employees, regardless of time worked for employerEmployee who has been employed for at least 30 calendar days by the employer
Applicable EmployersPrivate entity employers with fewer than 500 employees (includes self-employed individuals)Employers with fewer than 500 employees
Benefit to Employees§ Full-time salaried: 80 hours of paid sick leave

§ Part-time/hourly: days off equal to # of hours employee works on average over 2-week period.

Total of 12 workweeks in 12-month period paid leave. First ten days are unpaid.
Uses of Leave Employee is unable to work due to:

a)  Federal, State, or local quarantine/isolation orders related to COVID 19;

b) advice from health care provider to self-quarantine due to concerns related to COVID 19;

c)  experiencing symptoms of COVID 19 and seeking diagnosis;

d) caring for someone subject to order (a), or received advice per (b);

e)  caring for child at home since school is closed or child care provider is unavailable due to COVID 19 precautions;

f)  any other substantially similar conditions.

Employee is unable to work or telework as a result of public health emergency (COVID 19), only due to need to care for child under 18 if school or place of care has been closed, or child care provider is unavailable, due to a public health emergency.
Calculation of PaymentCalculation:

§ For Uses of Leave (a), (b), and (c): Required Compensation multiplied by # of hours employee would normally be scheduled to work

§ For (d), (e), and (f): Two-thirds of Required Compensation multiplied by # of hours employee would normally be scheduled to work**

 

“Required Compensation” is the greater of –

1.  Regular rate of pay of employee

2.  Minimum wage under Fair Labor Standards Act or

3.  Minimum wage rate for employee in applicable State or locality.

 

Limits: Maximum Paid Sick Time

§ For Uses of Leave (a), (b), and (c): $511 per day and $5,110 in aggregate

§ For (d), (e), and (f): $200 per day and $2,000 in aggregate

Calculation:

Two-thirds of employee’s regular rate of pay at the number of hours employee would otherwise normally be scheduled to work**

 

Limits: Maximum Paid Family Leave

$200 per day, $10,000 in aggregate.

 

 

 

 

 

 

 

 

**Varying schedule calculation available.

Other Relevant Provisions§ Paid sick time does not carry over from 1 year to the next

§ Employer may not require employee to search for replacement to cover hours when using paid sick time.

§ Employer may not require employee to use other paid leave provided by employer before employee uses paid sick time

§ Discrimination against employee for using paid sick time is prohibited.

§ Secretary of Labor will issue calculation guidelines.

§ Employer must post notice to employees of this paid sick time. Secretary of Labor will make model notice available.

§ Secretary of Labor may issue regulations for good cause to exempt small businesses with fewer than 50 employees from the requirements of section (e) above (childcare) when imposition of such requirements would jeopardize the viability of business.

§ Employee may substitute accrued vacation, personal, medical, or sick leave during first ten unpaid days.

§ Employees entitled, upon return from leave, to be restored to the position of employment held when leave commenced; or to be restored to equivalent position with equivalent benefits, pay, and other benefits. However, employer with fewer than 25 employees need not restore employee to position if position does not exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency during leave period. Employer must prove reasonable efforts to restore employee to equivalent position.

Tax Credits

  • Employers who pay emergency paid sick leave or emergency family and medical leave are entitled to refundable tax credits for the qualified leave wages.
  • Employers can claim credits on their federal employment tax returns (e.g., Form 941, Employer’s Quarterly Federal Tax Return), but can benefit more quickly from the credits by reducing their federal employment tax deposits.
  • If there are insufficient federal employment taxes to cover the amount of the credits, an Eligible Employer may request an advance payment of the credits from the IRS by submitting Form 7200.
  • Self-employed persons are entitled to similar credits.
  • The CARES Act provides that these credits may be advanced to the employer in accordance with forms and instructions to be provided by the Secretary pursuant to the legislation. Any penalties for failure to deposit the tax are waived if such failure is due to the anticipation of the credits.
  • Claim credits for eligible leave taken between April 1 and Dec 31, 2020.
  • Retain adequate records and documentation related to leave.

FAQs

  1. Can employees get both unemployment insurance and paid sick leave? No, it’s one or the other.
  2. If someone is only working part-time due to taking care of a child, can FMLA be paid out intermittently? Yes
  3. Do you need to have a doctor’s note? No. Employer does not have permission to ask for a doctor’s note. We would suggest to only ask whether employee has called doctor; a health care provider just needs to advise employee to stay home. Send an email to employee to document discussion, the reason for leave, how leave is calculated, and generally keep track leave taken.
  4. Could employees get unemployment insurance during a furlough? Yes.
  5. Are paid sick leave and emergency family and medical leave retroactive? No. Both these only start on April 1, 2020. Prior to April 1, 2020, employees should use accrued PTO.
  6. How does paid sick and family medical leave overlap? It can only overlap in one type of circumstance, and that is if someone stays at home to care for a child.
  7. Which leave goes first? Employers can’t force employees to choose PTO. However, remember that emergency paid sick and family leave only comes into effect on April 1, 2020
  8. What happens with employees’ benefits during a furlough? ‘Furlough’ is not a termination of employment, but rather a temporary, mandatory suspension of work without pay.  In general, the impact of a furlough on employees’ health, retirement, and disability benefits depends on the structure of the benefit plans. Be clear that the reason for furlough is COVID-19. This affects the employees’ ability to receive unemployment benefits. Health plans: Employers often offer health coverage to full-time employees, determined based on the number of hours worked in a prior period. Employers should firs review plan documents. If employees are required to work a minimum number of hours to stay eligible for benefits and if they will not meet those requirements during a furlough, employers could either 1) keep the employees on the plan by amending the plan; or 2) treat the furlough as a COBRA qualifying event (and consider offering COBRA coverage to the employee).
    • If employers choose to amend the plan to include employees during furlough), employers should consider the following:
      • If employees are not paid during the furlough, think about how to handle the employee portion of the premium (usually a payroll deduction under normal circumstances). Options include employer covers employee portion, or employee pay their portion by check every month, or employee pays once work is back in full swing.
      • Determination of who is eligible could cease to align with the definition of “full-time employee” under the Affordable Care Act (ACA). In terms of the ACA, coverage must be made available to 95% of the full-time employees, and if this is not met, employers may face penalties.
      • Depending on the duration of the furlough, consider how a furlough in 2020 may affect the determination of full-time employee status for health coverage in the 2021 plan year.
      • Coordinate any expansion with plan’s insurer, third-party administrator, or stop loss carrier.
    • If employers choose to treat the furlough as a COBRA qualifying event, employers should consider the following:
      • The employer must issue COBRA notices to employees in order for them to allow them to receive COBRA coverage.
      • Although many employers subsidize COBRA, this is not required. An employer can require an electing employee to pay up to 102% of the cost of the medical coverage in order to continue coverage under COBRA. The 102% represents the total premium (employee’s share plus the employer’s share) plus a 2% administrative fee.
      • The CARES Act is not providing subsidies for COBRA.
      • Note that an increase in the employee’s share of the group health plan premium due to unpaid leave or a reduction in hours is also considered to be a COBRA qualifying event.

      For employees: Affordable Care Act enrollment has reopened in many states. Also, consider state health insurance exchange, Medicaid, or CHIP.

      Employees can get unemployment benefits during a fulough.

 

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