On March 18, the U.S. Congress passed legislation that created a federal paid sick leave component for corona virus related needs and expanded the Family and Medical Leave Act to include a paid leave component for employees caring for children whose schools or child care facilities were closed because of the virus outbreak.
The Families First Coronavirus Response Act (H.R. 6201) was passed signed March 18th by the President. The act is effective as of April 1, 2020.
The components of the Act that you must understand for your business are:
1) National Paid Sick Leave related to COVID-19. Private sector employees with fewer than 500 employees and public sector employers must provide employees with paid sick leave if any of the following six situations prevent the employee from being at the workplace in person or teleworking:
- a federal, state, or local quarantine or isolation order related to COVID-19 has limited the employee’s ability to travel;
- a health-care provider advised the employee to self-quarantine because of concerns regarding COVID-19;
- the employee is experiencing symptoms associated with COVID-19 and is in the process of determining whether he or she has contracted the virus;
- the employee is caring for someone who is subject to a governmental quarantine or isolation order for COVID-19 or whose health-care provider advised that person to self-quarantine because of COVID-19;
- the employee needs to care for his or her child because of the closure of the child’s school or child-care facility, or the unavailability of a child-care provider, because of COVID-19 considerations (although this is separate from similar leave available via an extension to the Family and Medical Leave Act, discussed later in this article); o
- the employee is experiencing a situation that was specified by the Department of Health and Human Services as substantially similar to any of the five aforementioned situations.
The amount of per diem sick leave, the time you are required to pay sick leave and the caps on what you must pay varies depending on which of the above is preventing the employee from being at the work place.
Beginning on April 1, 2020 you are required as an employer to post notice of the availability of the leave. The notices have been prepared by the Department of Labor and can be found on their website at:
You are required to post these notices in a conspicuous place, however in light of the impracticality of that procedure with so many employees working at home, it is recommended that these notices be sent out electronically.
2) FMLA Expansion, Paid Leave Component. The Family Medical Leave Act (FMLA) has been expanded to require employers to provide unpaid leave to any employee who needs to care for children younger than 18 whose school or child-care facility is closed because of the virus or whose child care provider is unavailable because of the outbreak. The requirement to provide payment begins after the first 10 days of leave. The paid leave is provided after the National Paid Sick Leave and provides and additional 10 work weeks and requires payment of no less than 2/3s normal salary with a total cap of $10,000. Employers with less than 50 employees may be exempt from this requirement if they can establish that payment of this leave would jeopardize their business viability. Unlike the FMLA generally, for this paid leave component, employees qualify if they have worked for the employer for 30 or more days.
3) Payroll Tax Credits. To offset some of the hardship to employers, the new Act allows an employer to reduce the employer portion of the Medicare tax by the amount of paid sick leave related to COVID-19. The mount of the credit is limited to the amount of payments for ten days of this leave subtracted by the payments for the number of days of such paid leave taken in previous quarters. There are other limitations that your tax advisor can explain to you.
You can find detailed information about this new legislation at the Department of Labor Website.
Our attorneys at GN are here to assist you in any way we can with regards to any issues your business has concerning the COVID-19.
We will continue to provide you with new information as it develops.
~ Dave Gianelli, Partner, Gianelli | Nielsen