COVID-19: Paid leave mandates for businesses and workers

- Posted
April 8, 2020

With COVID-19 continuing its assault on the U.S. economy, the federal government has enacted legislation mandating paid leave for American workers. Employers should understand their responsibilities under the new regulation plus any others required by law.

The Families First Coronavirus Response Act (FFCRA)

On March 18, 2020, President Trump signed the FFCRA into law, authorizing employers with fewer than 500 employees to provide:

1. Up to 80 hours of paid sick leave to employees who are unable to work because of their own coronavirus-related quarantine or symptoms. This paid leave is capped at $511/day/employee (or $5,110 for 10 days).

2. Up to 80 hours of paid sick leave to employees who take leave to care for a quarantined family member. This paid leave is limited to $200/day/employee (or $2,000 for 10 days).

3. Up to 12 weeks of job-protected leave to employees who cannot work because their child’s daycare provider is closed due to the coronavirus. Though the initial two weeks of leave is unpaid, employees can elect to substitute those two unpaid weeks with their accumulated paid vacation, sick or personal time. The remaining 10 weeks is capped at $200/day/employee (or $10,000). Note that this provision is an expansion of the Family Medical and Leave Act (FMLA).

Employers with fewer than 50 employees can claim exemption from the FFCRA’s paid leave provisions if compliance “would jeopardize the viability of the business as a going concern.” In this case, you would need to document the reasons your business cannot meet the FFCRA’s requirements. Per the U.S. Department of Labor, details on claiming this exemption are forthcoming.

Besides this exception, all businesses with fewer than 500 employees must obey the FFCRA. Quarterly tax credits are available to participating employers, to offset the cost of providing paid leave under the Act. Tax credits are offered, as well, to self-employed people who take qualified sick leave.

Employers with 500 or more employees do not have to abide by the FFRCA and are presumed ineligible for associated tax credits.

The FFCRA became effective April 1 and will expire Dec. 31, 2020.

The Family and Medical Leave Act

As stated earlier, the FFCRA temporarily broadens the FMLA by requiring paid short-term job-protected leave due to COVID-19. This is different from traditional FMLA leave, which requires employers (with 50 or more employees) to give eligible employees up to 12 weeks of unpaid job-protected leave for a qualified medical reason — such as a serious health condition.

Traditional FMLA leave is not only unpaid but also typically doesn’t cover ordinary flu symptoms. According to an article published by SHRM, “Regular flu symptoms aren't usually considered a serious health condition” under the FMLA. However, “… a longer-term respiratory illness could trigger an employee's right to take job-protected, unpaid FMLA leave.”

State-Mandated Paid Leave

Prior to the coronavirus, a growing number of states and localities were already requiring employers to give employees paid sick leave. Moreover, a few states — such as California and New Jersey — mandate paid family leave, which is funded through employee-paid payroll taxes. Now, with COVID-19 causing devastation, some states and localities are passing coronavirus-specific paid leave laws.

For example, New York Gov. Andrew Cuomo signed a new law ordering New York employers to immediately give paid or unpaid sick leave to employees quarantined because of COVID-19. Whether the leave is paid or unpaid depends on the employer’s size and net income. Employers in New York must also permit their employees to use their existing paid family leave and short-term disability benefits, as mandated by the new law.

Staying Updated and Compliant

As more and more states and localities look to expand their COVID-19 resources, employers must monitor not just federal developments but also those at the state and local levels. But with so many different types of leave laws out there, it can be difficult to know which ones apply to your business and how to administer those applicable. A labor law expert can help you navigate this unprecedented terrain.