There are two provisions providing paid leave to employees forced to miss work because of the COVID-19 outbreak: an emergency expansion of the Family Medical Leave Act (FMLA) and a new federal paid sick leave provision.
Qualifying for coverage
The bill covers all companies with up to 500 employees. There is no 50 person minimum with the typical Family Medical Leave Act, and self-employed people can see some benefits. However, the law states that the DOL may exempt small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business.
There are six qualifying reasons for coverage under this bill.
- The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis;
- The employee is caring for an individual who is subject to a federal, state or local quarantine order, or the individual has been advised to self-quarantine due to concerns related to COVID-19;
- The employee is caring for the employee’s son or daughter, if the child’s school or child care facility has been closed or the child’s care provider is unavailable due to COVID-19 precautions; or
- The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and the Department of Labor.
Benefits for Employees
- Normal FMLA is unpaid, but under the FFCRA, employees who are on sick leave because they are sick can receive their full pay, up to $511 per day, or $5110 total.
- Leave taken to care for children whose schools or daycares have closed is paid at two-thirds the employee’s regular rate of pay, with a maximum of $200 per day or $10,000 total.
- Employers cannot force you to use up your vacation or other sick time before receiving this benefit.
- There is a ten-day waiting period before this benefit applies. Employees can use existing sick or vacation time to cover these days.
Benefits for Employers
- Employers receive tax credits for 100 percent of what they pay out to employees, with the above-noted limits.
- For employers with 50 or fewer employees, the Secretary of Labor can exempt the business from these requirements.
- Employers with fewer than 25 employees do not have to restore employees to their previous positions.
There is a short period of only 15 days between when President Trump signs it (as he is expected to do) and when it becomes law. Make sure your business understands the ramifications and how it applies to your business. It’s essential to carry out the new law correctly. We expect additional guidance to come from the IRS regarding the specifics of how to claim the tax credits for the employers.