A new federal law passed in response to the COVID-19 (Coronavirus) crisis requires employers to provide paid leave to their employees starting on April 2, 2020.
While the new law applies to all businesses in the United States, not all employees will be eligible for paid leave and employers don’t have to pay employees for any leave taken prior to April 2, 2020. Both types of leave currently expire on December 31, 2020.
Which employers are required to provide this leave?
This new law applies to all employers with fewer than 500 employees. While the federal government can make exceptions for small businesses if they can’t afford to pay for this leave, no exceptions have been granted and right now there is no information about how to apply for one. We hope to learn more about exceptions for small businesses, and we will let you know as soon as we have more details.
What kind of leave do I have to provide?
There are two kinds of leave that employers must provide:
Emergency Paid Sick Leave, which must be given for 10 days and will be available to most employees.
Emergency Family Medical Leave, which is available for 12 weeks, but only in very limited circumstances that are listed below.
Which employees are eligible for paid leave?
Emergency Paid Sick Leave: All employees, regardless of how many hours they normally work or how long they have worked for you.
Emergency Family Medical Leave: Employees who have worked for you at least 30 days.
Which employees qualify for paid leave?
Emergency Paid Sick Leave: An employee who is unable to work either at your place of business or remotely due to one of the following 6 reasons qualifies for emergency paid sick leave:
- The employee is under an official quarantine or isolation order related to COVID-19.
- The employee has been advised by a healthcare provider to self-quarantine related to COVID-19.
- The employee is experiencing COVID-19 symptoms and seeking a medical diagnosis.
- The employee is caring for an individual who is under an official quarantine or isolation order or who has been advised by a health care provider to self-quarantine related to COVID-19.
- The employee is caring for a child under 18 years old if the child’s school or daycare has been closed, or childcare provider is unavailable, due to COVID-19 precautions.
- The employee is experiencing substantially similar conditions to those listed above.
If your employee does not meet one of the 6 criteria above, they are not eligible for emergency paid sick leave.
Emergency Family Medical Leave: This kind of paid leave is available only to employees who have worked for you at least 30 days and who are unable to work either at your business or remotely because they need to care for their child under 18 years old because the child’s school or daycare has been closed, or if their childcare provider is unavailable due to COVID-19. An employee is entitled to this leave only when the school/daycare/childcare has closed or is unavailable due to an officially declared COVID-19 public health emergency.
[Employers with 50 or more employees: Please note that you are still required to give traditional leave required under the Family & Medical Leave Act: up to 12 weeks (unpaid) leave for employees who have worked for you for at least a year and who need leave to care for themselves, a child or parent due to illness.]
How many paid days leave do I have to give employees?
Emergency Paid Sick Leave: Employees can take up to 10 days of emergency paid sick leave. For a full-time employee, this means 80 hours. For a part-time employee, it is the average of hours worked over a two-week period.
This paid sick leave is in addition to any paid leave policies your business currently has for your employees, and this new law prevents you from changing your leave policy to avoid providing additional leave to your employees. You cannot require an employee to use other paid leave before using this new paid sick leave. You also can’t require an employee to find a replacement to cover the time they take for sick leave.
Emergency Family Medical Leave: Employees can take up to 12 weeks of emergency family medical leave. The first two weeks (i.e., 10 days) of this type of leave don’t have to be paid, but the employee will most likely need to be paid for the first two weeks because they will qualify for 10 paid days of emergency paid sick leave. Employers who have existing Paid Time Off (PTO) policies that give employees paid leave may also require employees to use their accrued PTO and be paid for some or all of the initial 10-day period.
How much do I have to pay employees while they’re on leave?
Emergency Paid Sick Leave: Employees taking emergency paid sick leave to care for themselves (reasons 1–3 above) must be paid 100% of their regular rate of pay multiplied by the number of hours the employee would normally be scheduled to work. Pay is capped at $511 per day and $5,110 total.
Employees taking emergency paid sick leave to care for others or for other reasons (reasons 4–6 above) must be paid two-thirds of their regular rate of pay multiplied by the number of hours. Pay is capped at $200 per day and $2,000 total.
Emergency Family Medical Leave: After an employee’s 10 days of paid sick leave run out, employees qualifying for emergency family leave must be paid two-thirds of their regular rate of pay multiplied by the number of hours the employee would normally be scheduled to work. Pay is capped at $200 per day and $10,000 total. If you have fewer than 25 employees, you are not required to reinstate employees to their same job at the end of their leave.
Tax Implications: Employers do not have to pay the usual 6.2% Social Security payroll tax on pay for this leave (although employees will still be required to pay their 6.2% tax on it). Also, employers may be entitled to a payroll tax credit of up to $511 per day for wages paid to employees on emergency paid sick leave and up to $200 per day for wages paid to employees taking emergency family medical leave. Because these tax credits and exemptions only apply to wages paid employees for these two new types of leave, employers should document the reasons why their employees are absent from work. These exemptions and credits do not apply to paid leave provided in excess of what the two new types of leave require.
There is a new poster that employers will have to post explaining the new Emergency Paid Sick Leave to employees. We will be providing this poster to all FUBA members free of charge as soon as it is available.