As you may be aware, on Wednesday evening, the President signed a coronavirus relief package into law that addresses employee wages in light of implications caused by COVID-19. While this provides a framework of benefits employers will provide, it does not provide a complete picture leaving key questions unanswered. The Department of Labor has 15 days to create regulations, meaning that it may be April 2nd before we have additional information. From a high-level standpoint, the bill addresses two points – paid sick leave and FMLA expansion – which outline employer responsibilities.
Paid Sick Leave:
The relief package states an employer must provide an employee with 80 hours of paid sick leave at 100% of the employees pay (up to a maximum of $511 per day) if they meet one of the following criteria:
1. To self-isolate because they have been diagnosed with the coronavirus
2. To seek diagnosis or preventative care because they are exhibiting symptoms
3. To comply with recommendation or order by public official or healthcare provider on the basis that their physical presence on the job would jeopardize the health of others
Additionally, the relief package states an employer must provide an employee with 80 hours of paid sick leave at 66.67% of the employees pay (up to a maximum of $200 per day) if they meet one of the following criteria:
1. To care for a family member who is quarantining due to diagnosis, exhibiting symptoms or needs to seek medical care
2. To care for their own children whose school or childcare provider is unavailable due to the coronavirus.
Family & Medical Leave (FMLA) Expansion:
The relief package states an employer must provide an employee with paid leave at 66.67% of the employee’s rate for 10 weeks, up to a maximum of $200 per day, not to exceed $10,000 in total if they meet the following criteria:
1. To care for their own children whose school or childcare provider is unavailable due to the coronavirus.
Fine Print:
1. These policies are in addition to any sick leave policies already in place. An employer cannot change its current paid leave policy.
2. Part time employees are to be paid based upon the average number of hours they worked per week for the 6 months prior to leave. If they have not been employed for 6 months, the employer must consider a reasonable number of hours that was expected upon hiring.
3. There is a “hardship” clause in the bill which could apply to employers with less than 50 employees if the payment of wages would jeopardize the business. At this time, we do not know the definition of “jeopardize” or how this would be implemented. In the past similar clauses were “opt out” meaning you did not have to take action to qualify. It appears that this may be “opt in” meaning you will have to take specific actions to prove you qualify. We are still waiting on further guidance.
Good News - Tax Credits:
In order to offset 100% of employer expenses related to sick leave, tax credits will be available to employers who are required to provide sick leave to their employees. This will be available in the form of payroll tax credits and will be provided within the next 3 months.
Our thoughts are with you, your families, and your employees during this time as we navigate uncharted territories. We will continue to monitor information as it becomes available.
Legal Disclaimer: As a certified public accounting firm, this post does not provide specific legal advice. Since this is a highly technical topic which will apply to all practices differently depending upon unique situations, if you have specific questions it is advised that you speak to an employment law attorney.