Employers across the nation are feeling the pressure to keep their businesses up and running and profitable during the current COVID-19 pandemic. Whether you’re concerned about hunting down alternate suppliers or keeping employees and customers safe from contamination, there’s a lot on business owners’ plates at the moment. We know staying on top of the information about the pandemic is important to your business, so here’s the latest on sick leave policies during the coronavirus crisis.
Before COVID-19
State by state the country is grappling with trying to stop the spread of the coronavirus by asking people to stay at home and nonessential businesses to close their doors to walk-in customers. Although businesses are experimenting with creative solutions, such as no-contact deliveries and shortened business hours, many business owners are still having to cut down on staff—the Labor Department recently reported the largest number of unemployment claims ever recorded in U.S. history.
For business owners unfortunate enough to have employees come in contact with COVID-19, by either becoming infected themselves or having someone they provide care for become infected, managing the obligations of sick leave makes operating the business even harder.
Prior to the pandemic, there was no federal law mandating paid sick leave for private businesses, except for federal contractors procuring work from the government. Offering paid sick leave was only required by 11 states, Washington, D.C. and another 30 cities and counties. Under federal law, the Family and Medical Leave Act (FMLA) did require employers with more than 50 employees (working within 75 miles of the business location), to provide up to 12 weeks of unpaid leave for medical reasons attributable to the employee or a member of the employee’s immediate family.
Current Changes to Sick Leave Laws
To accommodate the growing number of people having to quarantine themselves or someone in their care, the federal government has enacted the H.R.6201 Families First Coronavirus Response Act. Effective April 2, 2020 through December 31, 2020, The Response Act expands on FMLA benefits and provides businesses with reimbursement for paid sick leave. The new law applies to employers nationwide with fewer than 500 employees.
Here are the specifics as they stand today.
Emergency Paid Sick Leave
Eligible employees (those who have worked for the employer for at least 30 calendar days) are able to receive two weeks of paid sick leave. Part-time and hourly workers are also eligible for paid sick leave and the amount is calculated by the average number of hours the employee works over a two-week period.
Employees can take paid sick leave for the following reasons:
- The employee is subject to a federal, state, or local quarantine or isolation due to the coronavirus.
- A health care provider advises the employee to self-quarantine due to concerns related to the coronavirus (self-imposed quarantine without medical advice does not qualify under the Act).
- The employee is experiencing symptoms of the coronavirus and is waiting on a medical diagnosis.
- The employee is caring for an individual (not limited to family members) who is either subject to a federal, state, or local quarantine or isolation due to the coronavirus or has been advised to self-quarantine.
- The employee is caring for the employee’s child whose school has been closed or place of care is unavailable due to the coronavirus.
Payments are capped at $511 per day for those who are sick with the virus or seeking care, and $200 a day for those caring for a sick family member or children. Also, under the Act, this new leave time is in addition to other paid leave provided by the employer. Employers are also required to post the law’s requirements where employees can view them. You can download and print the Families First Coronavirus Response Act Sick Leave poster from the Department of Labor’s website.
In addition, the Act extends the previous FMLA eligibility to include more employers. Now all employers with less than 500 employees must provide eligible employees with 12-week FMLA leave, up to 10 weeks of which must be paid.
In return, for businesses the Families First Act provides dollar-for-dollar reimbursement through tax credits for all qualifying wages paid—meaning those wages paid to an employee on sick leave for the qualifying coronavirus reasons. According to the Department of Labor, applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.
The Department of Labor has also promised:
- Employers will face no payroll tax liability.
- Self-employed individuals will receive an equivalent credit.
- Reimbursements will be quick and easy to obtain.
- And, where a refund is owed, the IRS will send the refund as quickly as possible.
Employers are prohibited from firing, disciplining or discriminating against any employee who takes paid sick leave under the Family First Act. Employers in violation of any part or parts of the Families First Act could be subject to fines or imprisonment.
Small Business Exemption
Still under discussion is the Act’s provision giving the Labor Department the authority to allow small businesses with fewer than 50 workers to choose not to provide sick leave payments “in cases where the viability of the business is threatened.” Because experts estimate that loophole could leave 12.8 million small business workers without sick leave, changes to the exemptions and requirements could be adapted.
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