Paid Sick Leave and Paid Family Leave due to the COVID-19 virus explained

What:  Paid Sick Leave and Paid Family Leave due to the COVID-19 virus

Effective: Starting April 2, 2020 and expires December 31, 2020

Affects:   Any employer with less than 500 employees.

Exception: Employers with less than 50 employees may later be deemed exempt by the Department of Labor if can prove the provision would jeopardize the viability of the business.

Cost to the employer:

• No net cost to the employer
• Employer is required to pay the sick leave and family leave and then recover the cost through refundable payroll tax credits.
• Paid Leave is exempt from social security taxes but not Medicare taxes. However, the payroll tax credit will apply to this cost as well.
• If employer continues employee’s health insurance coverage while on paid sick or medical leave under this act, an additional credit applies for this expense.

Paid Sick Leave:

Employer must pay up to 2 weeks of paid sick leave for an employee (no specific length of service required) who cannot work or telework due to 1 of the following 6 conditions as a result of a declared emergency related to COVID-19.

1. subject to federal, state, or local quarantine or isolation order.
2. advised by a health care provider to self-quarantine (self-imposed does not apply).
3. experiencing symptoms of COVID-19 and seeking a medical diagnosis.
4. caring for someone who is either subject to a quarantine or isolation order, or was advised by a health care provider to self-quarantine.
5. caring for a child whose school has been closed, or whose place of care has been closed or is unavailable.
6. Is experiencing any other substantially similar condition as determined by the Secretary of Health and Human Services.

Exception: Employers of healthcare providers or emergency responders can elect to exclude such employees from the paid sick leave provisions.

Benefit:

• Full-time employees – 80 hours of paid sick leave
• Part-time employees – average hours would work over a 2-week period
• Limit:
• Up to $511/day for up to 2 weeks ($5,110 max) if qualifies under condition 1, 2, or 3.
• Up to $200/day for up to 10 days ($2,000 max) if qualifies under condition 4, 5, or 6.

Paid Medical Leave:

• Applies to an employee that was employed for at least 30 days and who cannot work or telework because they are caring for a minor child whose place of care has been closed, or is unavailable, as a result of a declared emergency related to COVID-19.
• Employee may take up to 12 weeks of family leave under this act
  • First 2 weeks do not accrue benefits.
  • Employee may elect to use any accrued sick or vacation time during this otherwise unpaid period.
  • Triggered only after employee has taken 2 weeks of paid sick leave.
  • Employers with 25 or more employees must allow a returning employee to be reinstated ti the same or equivalent position.
• Employer must pay up to 10 weeks of paid family leave for an employee that was employed for at least 30 days and meets the requirements above.
• Benefit: two-thirds of regular rate of pay and for the number of hours the employee would be normally scheduled to work.
• Limit: up to $200/day ($10,000 max)
• Restoration to Position:
  • For employers with 25 or more employees, a returning employee is entitled to be reinstated to the same or equivalent position.
  • For employers with less than 25 employees, a returning employee is entitled to be reinstated to the same position unless that position does not exist due to economic conditions, or other changes in operating conditions, caused by the Covid-19 emergency.

Self-Employed Individuals:

• Both sick leave and family medical leave provisions apply to self-employed individuals who regularly carry on a trade or business and meet the leave requirements.
• Includes independent contractors and partners in partnerships.
• Benefit:
  • Received as a refundable tax credit against their self-employment tax.
  • Paid Sick Leave (for up to 10 days):
    • Lesser of $511/day or the average daily self-employment income if qualifies under condition #1, 2, or 3.
    • Lesser of $200/day or 67% of the average daily self-employment income if qualifies under condition #4, 5, or 6.
  • Paid Medical Leave (for up to 50 days):
    • Lesser of $200/day or 67% of the average daily self-employment income