Paid Sick Leave and Family Medical Leave Act for Small Business

The Families First Coronavirus Response Act was passed on march 18, 2020 and will go into effect April 1, 2020. There are two components to this bill: Emergency Paid Sick Leave for when one of your employees are sick or caring for someone who is sick or in quarantine, and Paid Family And Medical Leave for when one of your employees is unable to work or telework while caring for a child under age 18. The legislation also would fund an increase in state unemployment insurance programs, provide more than $1 billion in nutrition aid, allow closed schools to continue providing free and reduced-cost meals to eligible students, add flexibility for the food stamp program, increase the portion of Medicaid spending paid by the federal government (as opposed to the states), and guarantee free coronavirus testing to anyone whose doctor has said needs a test. This law goes into effect April 1, 2020.

Paid Sick Leave

• Applies to employers with fewer than 500 employees, with possible exemptions for certain health care providers and first responders and businesses with fewer than 50 employees.
• Up to 10 days of paid sick leave covering 100% of the employee’s wages during that time (at regular rate of pay up to $511 per day). For full-time employees, the employer must pay 80 hours worth of time. Part-time employees are entitled to sick time based on their average hours worked over a 2-week period.
• Employees covered:
  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID– 19.
  3. The employee is experiencing symptoms of COVID– 19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
  5. The employee is caring for an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID– 19.
  6. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
  7. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

• Payroll tax credits help cover the costs for the employer.
  • For employees in categories 1-3 above, the maximum compensation that will be covered through payroll tax credits is $511 per day.
  • Employees caring for an individual in categories 1-3 or caring for individuals in 4-7, the maximum payroll tax credit is two-thirds of their regular rate with a maximum of $200 per day.
  • The Act also allows a tax credit to cover health insurance while the employee is on leave.
  • The tax credit is taken against future payroll tax liabilities. If the credit is larger than the payroll taxes, you will get a refund.

Paid Family Medical Leave

• Applies to employers with less than 500 employees. This applies to (1) a private entity or individual which employs fewer than 500 employees and (2) a public agency (g., government) and any other entity that is not a private entity or individual with more than one employee.
• The Secretary of Labor can exempt businesses with fewer than 50 employees if requirements would jeopardize the viability of the business as a going concern
• Up to 3 months of paid family leave covering 2/3 of the employee’s wages
• Employees covered:
  • Must have been employed for 30 days
  • The employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a “public health emergency” defined as an emergency with respect to COVID–19 declared by a Federal, State, or local authority.
• The first 10 days of leave may be unpaid and then paid leave is required under this Act. The Employee can elect to use accrued paid vacation, personal or sick leave for this unpaid leave. The employer can require the employee use the accumulated time during this 10-day period.
• Paid leave is calculated based on an amount not less than two-thirds of an employee’s regular rate of pay and the number of hours the employee would otherwise be scheduled to work.
• Payroll tax credits up to $200 per day with a maximum of $10,000 per employee.
  • The Act also allows a tax credit to cover health insurance while the employee is on leave.
  • The tax credit is taken against future payroll tax liabilities. If the credit is  larger than the payroll taxes, you will get a refund.