News & Insights

COVID-19 Paid Leave Acts – A Brief Breakdown

During this time of crisis, the legislature is passing significant legislation in order to aid the economy along with employers and employees. One of the major acts passed is the Families First Coronavirus Response Act. There are two provisions of the Act the Emergency Family Leave Expansion Act and the Emergency Paid Sick Leave Act which is broken down below.

Emergency Family Medical Leave Expansion Act

Who is subject to the Act?

This act is geared towards all employers who employ fewer than 500 employees amongst all their locations. However, the Secretary of Treasury has stated in a press release that guidelines will be provided for exemption of certain employers who employ fewer than 50 employees if the implication of the Act will threaten the viability of the business.

Which employees can obtain leave under the act?

Emergency Family Medical Leave Expansion Act

Any employee who is employed for at least 30 calendar days with the employer and is unable to work (or telework) due to a need for leave for childcare for a child under 18 years of age due to the coronavirus. This will include any school, or childcare facility is closed due to measure put in place in response to the coronavirus.

Emergency Paid Sick Leave Act

Any employee, regardless of the length of employment with an employer who:

  1. Is subject to federal, state, or local quarantine or isolation order related coronavirus, or
  2. Advised to stay home by a doctor due to concerns of coronavirus, or
  3. Has symptoms and is seeking a medical diagnosis, or
  4. Is caring for someone who is required under federal, state or local quarantine related to the coronavirus or advised to stay home by a doctor due to concerns of the coronavirus, or
  5. Is caring for a child if the school/childcare location is closed because of coronavirus, or
  6. Experiencing any other substantially similar conditions.

How many days will leave last?

Emergency Family Medical Leave Expansion Act

The employee will receive a leave until the coronavirus pandemic ends or for 12 weeks, whichever is sooner. However, the first 10 days of the leave shall be unpaid, unless the employee elects to use their available paid time off during these days.

Emergency Paid Sick Leave Act

If the employee is a full-time employee then they will be allowed to leave for a total of 80 hours of work that would be performed. If an employee is a part-time employee then the number of hours would be such that the employee would have performed over a course of two (2) weeks. This leave cannot be carried over into the next calendar year. Employees cannot be required to use prior sick leave before utilizing their Emergency Paid Sick Leave under this Act. Employees can also not be required to find a replacement prior to using the leave.

How much must be paid to the employee?

Emergency Family Medical Leave Expansion Act

            Simply put, one must pay their employee not less than two-thirds (2/3) of the regular rate of pay for the hours the employee would normally work. However, the amount cannot be more than $200 per day and not more than a total of $10,000.

Emergency Paid Sick Leave Act

The amount of compensation will be the greater of the regular rate of pay or minimum wage in effect. However, an individual who has contracted coronavirus themselves is required to quarantine themselves, or is seeking medical diagnosis related to coronavirus, is required to be paid no more than $511 per day for a total of $5,110. Whereas an individual who is caring for an individual who has contracted coronavirus themselves, is required to quarantine themselves, or is seeking medical diagnosis related to coronavirus, can only receive $200 per day for a total of $2,000 for the paid leave.

Does the position have to be restored?

            The individual taking the leave does have to be restored to the same or similar position. However, if the employer employs less than 25 employees and the position becomes unavailable due to economic conditions or changes in operating conditions due to coronavirus that affects the position during the leave then the restoration of position is excused.

Tax Implications

What tax credits are available?

            Tax credits are available against payroll taxes in each quarter. The tax credits are available on a dollar to dollar basis. If there are not sufficient taxes to cover the paid sick leave and child care leave then a refund will be issued. The credit is limited to the amount actually paid up to the aggregated as listed in the respective acts.

Further guidance on the act is expected to be released later this week and we will provide updates as the guidance becomes available.

We understand that this is just one option in moving forward through this extraordinary circumstance. We urge you to initiate the conversation with your current employers, landlords, and creditors as soon as possible. In this time of need, we must all work together to find amicable solutions. If you find yourself in need of any assistance, please contact Sachi Davé at SDave@patellegal.com or any member of our team.

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