New Paid Sick and Medical Leave Laws Under Covid-19 Response Act
To topObjective:
- For employers to understand how to stay compliant with new sick and medical leave laws for 2020 as well as how they can be reimbursed for the associated expenses.
Entities:
- Any business that employees between one and five hundred (500) workers, including (but not limited to) LLCs, corporations, non-profits, sole proprietorships, and partnerships.
Additional Information:
- In an attempt to protect workers from losing their livelihoods during the COVID-19 pandemic, the United States government has passed the Families First Coronavirus Response Act, which requires some employers to offer emergency paid sick leave while further bolstering the Family Medical Leave Act already on the books. Both laws went into effect on April 2 and will last until December 31st of this year (2020).
Emergency Paid Sick Leave (ESPL)
To topUnder the EPSL, eligible employees can get up to two weeks of income in advance, which your business will be reimbursed for by the federal government. The employee will not have to use any of their paid leave before receiving funds from the ESPL. However, this paid leave does not carry into 2021, nor does it need to be paid out upon termination. If your company has fewer than 50 employees, it may be able to get an exemption from the ESPL from the Department of Labor if its requirements would threaten your business’s survival in these already difficult times.
ESPL Worker Eligibility
To topTo qualify, the employee must not be able to work (remotely or in-office) as the result of:
- Federal, state, or local quarantine, isolation, or stay-at-home orders.
- A health care provider’s direction to self-quarantine.
- COVID-19 symptoms.
- Caring for an individual (not limited to family relations) who is in quarantine or isolation.
- Looking after minor children whose school or place of care has closed – or whose babysitters are otherwise unavailable – to slow the spread of COVID-19.
- Any other reason as decided on by a joint decision between the Secretary of Health and Human Services, the Secretary of the Treasury, and the Secretary of Labor.
ESPL Pay Differences for Full-Time and Part-Time Workers
To topFull-time employees are now entitled to 80 hours of Emergency Paid Sick Leave relating to COVID-19. Part-time workers, on the other hand, are entitled to time equal to their hours worked over an average 2-week period. Both must be paid at their regular rate. There’s a daily limit of $511.00 for sick employees and $200 for those taking care of minor children.
Expansions to the Family Medical Leave Act (FMLA)
To topAs of April 2, 2020, the FMLA now offers up to 12 weeks of paid leave. Ideally, this time is to be used to care for family members afflicted by COVID-19. Just like with the ESPL, businesses with 50 employees or fewer can ask for FMLA exemptions from the Department of Labor. Workers must have been with the company for at least 30 days to qualify, and they cannot be terminated for using this time off. The first 10 working days are unpaid unless the employee wants to use the ESPL or any preexisting paid leave available. After those ten days, the employer must provide at least two-thirds of their regular pay for the remaining 20 days, with a daily cap of $200.00 for a total of $10,000.00.
Employer Reimbursements
To topEmployers will report the above paid sick leave wages and related credits each quarter using Form 941, the Employer’s Quarterly Tax Return. This is the same form used to report tax withholdings and the employer’s share of social security and Medicare taxes. Businesses that do not have enough set aside to cover paid leave can obtain a credit advance from the IRS using Form 7200, Advance Payment of Employer Credits Due to Covid-19. For a more detailed walk–through, visit the IRS’s FAQ on Covid-19 Tax Credits.
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