Paid Sick Leave – COVID19
The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.
Generally, the Act provides that employees of covered employers are eligible for:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
- Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. (Exemption for employers of under 50 employees)
Calculating sick leave: Maximum: $511 per day, or $5,110 total over the entire period of paid sick leave. A full-time employee is entitled to 80 hours of paid sick leave, and a part-time employee is entitled to the “number of hours that such employee works, on average, over a 2-week period.” If the part-time employee’s schedule varies from week to week, employers must first calculate the average number of hours the employee was scheduled per day over the six months immediately prior to the date the employee begins taking paid sick leave.
Those who work less than 40 hours per week are classified as part-time employees. For employees whose schedules vary, the DOL again instructs employers to use a six-month average using the period immediately before the leave begins. If the employee has worked less than six months, one would calculate the average over the entire period of employment.
Exemption: Small businesses are only exempted from providing leave requests due to school closures and child care unavailability. They are not exempt from providing leave for any of the other types of leave requests under the Family First Coronavirus Relief Act.
Exemption Documentation: While the DOL stated that employers that elect the exemption “should document why [their] business, with fewer than 50 employees, meets the criteria set forth by the Department”, they should not send any materials to the Department at this time. Regulations regarding the exemption are forthcoming.
Documentation needed: The DOL suggests that employee-signed documentation includes:
- The name of your employee requesting leave;
- The dates for which leave is requested;
- The reason for leave; and
- A statement from the employee that he or she is unable to work because of the reason.
If the employee requests leave because he or she is subject to a quarantine or isolation order or to care for an individual subject to such an order, they should additionally document the name of the government entity that issued the order. If the employee requests leave to self-quarantine based on the advice of a healthcare provider or to care for an individual who is self-quarantining based on such advice, they should additionally document the name of the healthcare provider who gave advice.
If your employee requests leave to care for his or her child whose school or place of care is closed, or if a childcare provider is unavailable, you must also document:
- The name of the child being cared for;
- The name of the school, place of care, or childcare provider that has closed or become unavailable; and
- A statement from the employee that no other suitable person is available to care for the child.
Tax Credit — Employers will report their total qualified leave wages and the related credits for each quarter on their federal employment tax returns, usually Form 941. The IRS states “In anticipation of receiving the credits, Eligible Employers can fund qualified leave wages (and allocable qualified health plan expenses and the Eligible Employer’s share of Medicare tax on the qualified leave wages) by accessing federal employment taxes, including withheld taxes, that are required to be deposited with the IRS or by requesting an advance from the IRS”.
Because quarterly returns are not filed until after qualified leave wages are required to be paid, some Eligible Employers may not have sufficient federal employment taxes set aside for deposit to the IRS to fund their required qualified leave wages. The IRS has a procedure for obtaining an advance. See here.
Morgan R. Johnson