Covid-19 Business Update II
Donald J. Sauder, CPA | CVA
The Families First Coronavirus Response (FFCRA) legislated on March 18th, 2020, provides revisions to employment laws for employers who employ fewer than 500 employees, including both full-time and part-time positions. It takes effect on April 2, 2020.
The revised employment laws provide both sick pay with the Emergency Paid Sick Leave Act and paid leave to employees under the Emergency Family and Medical Leave Expansion. Employers are provided an employment tax credit to compensate for the costs of both the paid leave and sick pay.
Benefits of Families First Coronavirus Response include:
- Free coronavirus testing;
- Nutrition waivers, to allow students who receive meals at school;
- Emergency paid sick pay;
- Emergency unemployment insurance stabilization;
Families First Coronavirus Response does not apply if employees are furloughed or with the lay-off of employees before April 2, 2020.
State and local laws may have separate implications. Contact a labor attorney before making any decisions that could subject to employment law risks.
Emergency Paid Sick Leave Act
Emergency Paid Sick Leave requires employers with fewer than 500 employees to provide paid sick leave. Businesses with fewer than 50 employees may claim an exemption from the paid sick leave requirements if it would jeopardize the business. This definition is yet to finalized for what qualifies an employer for the exception.
Except for health care providers and first responders, all employees are eligible to take paid sick leave under the FFCRA regardless of their duration of employment.
Full-time employees are entitled to take up to 80 hours of paid sick leave. Part-time employees also qualify for pay based on the average hours of equal to hours worked over two weeks.
Qualifying reasons for employees to be entitled to paid sick leave include:
- Advised by a health care provider to self-quarantine due to concerns related to Covid-19;
- They are subject of a federal, state, or local quarantine or isolation, i.e., business shut-down;
- Experiencing symptoms of Covid-19 and are seeking medical diagnosis;
- Caring for an individual who is subject to an isolation order or is quarantined;
- Caring for a child if the child care provider is unavailable due to a Covid-19 precaution, or the school or place of child care is closed;
- They are experiencing any other substantially similar conditions outline by the Secretary of Health and Human Services;
Paid sick leave will be paid at the employee’s regular compensation rate capped at 100% of wages up to $511 per day, or a total sum of $5,110 for employee’s subject to reasons one, two, and three above. Then for employees in categories four, five, and six, the wages are up to $200 per day or a total sum of $2,000.
This sick pay is added to any existing sick leave the employer provides. Employers may not require employees to use other sick before the newly legislated Emergency Paid Sick Leave.
Employers will be entitled to a tax credit for the amount of paid sick leave paid
The Emergency Family and Medical Leave Expansion Act
The Emergency Family and Medical Leave Expansion Act require employers with fewer than 500 employees, and exclusions may yet be issued for small businesses with fewer than 50 employers when it would jeopardize the viability of the company.
With this Act Employees are entitled to take up to twelve weeks of job-protected leave.
Reasons employees can take job-protected leave include caring for a child under 18 if the child’s school or place of care is closed or the child care provider is unavailable.
The first ten days of this job-protected leave can be unpaid. An employee can elect, but not be required to use accrued vacation, personal, medical, or sick leave for those days. Paid leave is subject to a limit of $200 per day, and up to a total amount of $10,000.
Today is today, and after all, tomorrow is another day. With the rapidly speeding changes in the business landscape, please talk with a labor attorney before making a labor decision in the current business climate.
DISCLAIMER: The above text does not constitute legal advice and has been prepared for informational purposes only. Please contact your legal advisor with questions about how this relates to your specific situation.