Apr 22, 2020

Recap of the New Paid Sick Leave Requirements

In light of the global coronavirus pandemic, the United States government is changing how it requires paid sick leave, and small businesses are some of the companies that will have to change their policies the most.  

On March 18, President Donald Trump signed the Families First Coronavirus Response Act (FFCRA) that mandates paid sick leave for millions of employees. It is an update of the Family and Medical Leave Act that was signed into law in the 1990s. About 25% of workers do not get paid sick leave at all, and the bill is an attempt to rectify this, although it is temporary and only applies to cases of coronavirus.

The provisions of the act went into effect April 1, 2020. and are set to expire December 31 of this year.

It is recommended that you communicate these changes with your employees as soon and as clearly as possible. The Society for Human Resource Management recommends that you use a simple, easy to understand format, such as question and answer.

The new law mostly applies to small and midsize businesses, so small business owners need to learn the new requirements.

In broadest terms, employers with less than 500 employees are required to follow the new provisions.

“The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers and private employers with fewer than 500 employees,” the Department of Labor noted in the new guidance.

There are several ways to receive exceptions, though.

Companies with less than 50 employees can petition the Department of Labor to be excluded from the new requirements.

“Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern,” the DOL continued.

Also, some healthcare companies with fewer than 500 employees like nursing homes or hospitals might qualify for an exception.

There was some controversy over the bill’s focus on small and midsize businesses. Most employees of companies with more than 500 workers—think McDonald’s and Walmart—have access to some form of paid sick leave, but the specifics are now left up to each corporation. Many big companies have sick leave policies that fall short of the 14 days of quarantine prescribed for people who have coronavirus or COVID-19, the respiratory disease it causes.   

Under FFCRA, qualifying businesses must provide 80 hours (2 workweeks or 14 days) of paid sick leave benefits for employees who have contracted COVID-19.

Specifically, employees that have been ordered by the government or advised by a healthcare provider because of COVID-19 must be provided the paid sick leave. Additionally, employees with COVID-19 symptoms who are seeking a medical diagnosis must receive paid sick leave. Essentially, workers who display COVID-19 symptoms qualify, too.

The sick leave requirements also apply to workers who are caring for someone subject to quarantine.

Workers who are parents to children whose school or childcare service closed due to COVID-19 precautions are subject to the new requirements.

Sick leave pay must be at the employee’s regular pay if they are under government or doctor orders, or if they are showing symptoms and are seeking a diagnosis. In other cases, the rate is set at 2/3 their regular pay or minimum wage, whichever is higher.

The daily rate for a sick worker is limited to $511 per day, with a 2-week upper limit of $5,110. If the worker is caring for someone else, the limit is $200 per day and $2,000 total.  

Your part-time employees are eligible for the number of hours they would work during a 2-week timespan.

Employees must have worked for you for at least 1 calendar month.

The act also mandates paid family leave, but only for workers who take leave to care for children whose schools have closed due to coronavirus precautions.

In this case, workers are entitled to 12 weeks of paid family leave. However, you don’t need to pay for the first 10 days—although workers can use vacation or personal leave time. The pay rate for family leave is set at 2/3 of a worker’s normal pay, capped at $200 per day and a total of $10,000 for the entire 12-week period.

The self-employed, independent contractors, and gig workers are also entitled to paid sick leave according to the law, except it comes in the form of a tax credit.

Because the law is so new, you should expect guidance to be regularly updated by the Labor Department. Although the law went into effect at the beginning of April, the government said it wouldn’t start enforcing it until April 17. The provisions expire at the end of 2020. 

About the author

Barry Eitel
Barry Eitel
Barry Eitel has written about business and technology for eight years, including working as a staff writer for Intuit's Small Business Center and as the Business Editor for the Piedmont Post, a weekly newspaper covering the city of Piedmont, California.

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