Insights

Employer Obligations under the New COVID-19 Paid Sick Leave and FMLA Benefits

On April 1, 2020, employers with less than 500 employees will be subject to the provisions of the Families First Coronavirus Response Act (the Act), which includes the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act (FMLA).

The Department of Labor (DOL) issued guidance in the form of Questions and Answers to clarify employer obligations and employee rights under the Act. Answers to some of the most commonly asked questions our Human Resources Consulting professionals are hearing from our clients are outlined below.

What types of leave does the Act cover?

The Emergency Paid Sick Leave Act requires employers to pay employees their regular rate of pay up to 80 hours over a two-week period if they are unable to work or telework due to a need for leave because they: (1) are subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) have been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) are experiencing symptoms of COVID-19 and are seeking medical diagnosis.

The Emergency FMLA requires employers to pay employees 2/3 of their regular rate of pay if they are unable to work or telework due to a need for leave because they: (1) caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (2) caring for your child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; or (3) experiencing any other substantially-similar condition that may arise, as specified by the Secretary of Health and Human Services.

How do I know if my business is required to comply?

To calculate whether your business meets the “less than 500 employees” threshold for both the Emergency Paid Sick Leave and Emergency FMLA requirements, the DOL provided the following guidelines:
 
  • Use the number of full-time and part-time U.S. employees on the date the employee's leave is to be taken.
  • The number should include employees on leave, temporary employees who are jointly employed by you and another employer, and day laborers supplied by a temp agency.
  • Do not include independent contractors in the total.

Are there any exemptions from the Act?

All private and public employers with 500 employees or more are exempt from the Emergency Paid Sick Leave and Emergency FMLA requirements. In addition, businesses with fewer than 50 employees can elect a small business exemption if they can document that providing these expanded benefits would jeopardize the viability of the business as a going concern. (Criteria for this exemption is forthcoming from the DOL.)

How do I calculate payments for full-time employees?

Employees who are eligible for Emergency Paid Sick Leave under the Act due to their own symptoms or quarantine orders due to COVID-19 are entitled to the greater of:
 
  • Regular rate of pay per applicable hour
  • Federal minimum wage in effect under the FLSA per applicable hour, or
  • Applicable state or local minimum wage per applicable hour

These payments are subject to a maximum of $511 per day, or $5,110 total over the entire paid sick leave period, which is capped at 80 hours under the Act.

Employees who are eligible for extended FMLA leave due to childcare needs resulting from COVID-19 are entitled to no less than 2/3 of their regular rate of pay for the hours they would normally be scheduled to work. This rate of pay must be at or above the federal minimum wage or applicable state or local minimum wage. These payments are capped at $200 per day or $10,000 for 10 weeks and kick in after an initial 10 days of leave, during which time the employee can use vacation, sick or other paid time off days.

When calculating “regular rate of pay,” use the average over a period of six months prior to the date of leave. If the employee has not worked for you for six months, use the average of the regular rate of pay for each week they have worked for you.

How do I calculate payments for part-time employees?

Under the Act, part-time employees are eligible for two weeks of leave equal to the amount of the average number of hours worked in a two-week period. If the part-time employee's schedule varies, use a six-month average.

Which employees are eligible for the leave?

The benefits under the Act only apply to active employees impacted by COVID-19 in the specific ways outlined above and to paid sick or FMLA leave taken between April 1 and December 31, 2020. These provisions do not apply to furloughed employees and employees with reduced hours, nor do they apply to employees who take leave for any other reason, even if the leave is taken during this time period.

Documentation of the paid leave under the Act should be carefully maintained by the employer to qualify for the related employer tax credits allowed in the Act.

Can eligible employees utilize more than one type of leave?

Pre-existing leave entitlements provided by the employer cannot be taken concurrently with the expanded leave provisions of the Act.

However, an employee can combine the Emergency Paid Sick Leave to pay for the first two weeks of leave with the Emergency FMLA leave for the following ten weeks to get paid for a full twelve weeks covered for a maximum total of $12,000. The employee would need to be eligible under the requirements of both leave programs.

How can I get my other questions answered?

Reference the DOL's complete Questions and Answers on the Act for more information on its application to corporations with multiple entities, multiemployer collective bargaining agreements, intermittent leave, job protection and healthcare coverage during employee leave, and other frequently asked questions.

Grassi's Human Resources Consulting professionals are also available to address any questions or concerns you have about implementing the Act's provisions. Please contact Jeff Agranoff at jagranoff@grassicpas.com for more information.