The Emergency Paid Sick Leave Act: An Employer FAQ

On March 18, 2020, the Senate passed, and the President signed into law, the House’s recently amended Families First Coronavirus Response Act (“FFCRA”) in response to the COVID-10 pandemic. The Chapman Firm has been closely following this legislation and has published a series of articles (here, here, and here) to assist its clients in preparing and implementing these new policies.

The FFCRA contains at least two specific sections that businesses must be aware of: The Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. Below are some frequently asked questions to assist businesses in analyzing and implementing the the Emergency Paid Sick Leave Act. Also check out our FAQ on the Emergency Family and Medical Leave Expansion Act.

 

What businesses must comply with the Emergency Paid Sick Leave Act?

The Paid Sick Leave Act applies to all private employers with fewer than 500 employees, as well as all public employers with at least 1 employee. Businesses that employ health care or emergency responder employees may elect to exclude those employees from these paid sick leave requirements.

What does this Paid Sick Leave Act mean for my business?

Generally, employers must provide employees with two weeks (80 hours) of paid sick leave when an employee has to take time off work, either because the employee is sick or quarantined due to COVID-19, or because the employee is caring for someone who is sick or quarantined due to COVID-19, or because the employee is caring for his/her child(ren), whose school or daycare center is closed due to COVID-19.

Besides giving employees paid sick leave, does the Paid Sick Leave Act require me to do anything else?

Yes, employers must post notice of these new Sick Leave requirements, in a conspicuous place, where notices of this sort are usually posted. The Department of Labor (DOL) is supposed to release a sample notice, which meets the requirements of the Act, on or before Wednesday, March 25, 2020. The Chapman Firm will post an update about this notice when it’s released.

Given that many business have promoted telework and work-from-home arrangements, we also recommend that employers e-mail such notices to all employees once required to do so.

What circumstances make an employee eligible for paid sick leave under this Paid Sick Leave Act?

An employee is entitled to paid sick leave under the Act to the extent that he/she is unable to work (or work remotely) for of any of the following reasons:

(1) the employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

(2) the employee has been advised by a health care provider to self-quarantine due to COVID-19-related concerns;

(3) the employee is experiencing symptoms of COVID-19 and seeking a medical treatment;

(4) the employee is caring for an individual who is subject to a quarantine or isolation order or has been advised to self-quarantine (as in 1 or 2 above);

(5) the employee is caring for his/her child(ren) if the child’s school or childcare center is unavailable or closed due to COVID-19 precautions; or

(6) “Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.”

This last category is not immediately applicable, but rather leaves an open category for further government agency action should it be necessary.

Do I have to pay employees at their full rate of pay if they are taking sick leave pursuant to this Paid Sick Leave Act?

It depends. If an employee is taking sick leave under this Paid Sick Leave Act because that employee himself/herself has symptoms or has been advised or ordered to be in quarantine or isolation (reasons 1-3 above), then you must pay that employee their regular rate of pay or the highest applicable minimum wage rate (whichever is greater), up to the maximum amount of $511 per day (or $5,110 total over a two week period).

However, if an employee is taking sick leave under this Paid Sick Leave Act because that employee is taking care of a child or someone under quarantine or isolation, or because he/she is experiencing a “substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor” (reasons 4-6 above) then you are required pay that employee only two-thirds of their regular rate of pay or two-thirds of the highest applicable minimum wage rate (whichever is greater), up to the maximum amount of $200 per day (or $2,000 total over a two week period).

How much paid time off is an affected employee entitled to?

Full-time employees are entitled to 80 hours of paid sick leave, and part-time employees are entitled to two weeks’ worth of paid sick leave.

What about new employees, do I have to give them paid sick leave, too?

Yes. The Paid Sick Leave Act specifies that employers must provide paid sick leave to affected employees no matter how long they have been employed.

If the affected employee is part-time, or has a schedule that varies from week to week, how do I know how much to pay them?

You must calculate the average number of hours that the affected employee was scheduled per day over the six-month period preceding the beginning of the employee’s paid sick leave, including any PTO hours that the employee took during that six-month window. Use that number to project the number of hours that employee would reasonably expect to work over the duration of the paid sick leave.

If an affected employee has been employed for less than six months, then calculate the daily rate based on the reasonable expectation of the average number of hours the employee would work per day.

Please also note that the DOL is supposed to release calculation guidelines to assist employers on or before Thursday, April 2, 2020. The Chapman Firm will post an update when it does.

If one of my employees files a complaint saying that I didn’t give them paid sick leave in accordance with the Paid Sick Leave Act, can I fire them?

No. It is unlawful for any employer to discharge, discipline, or discriminate against any employee who takes leave pursuant to this Paid Sick Leave Act or has filed any complaint or initiated any proceeding related to this Paid Sick Leave Act (for instance, seeking enforcement of the Act) or has testified or is going to testify in any such proceeding. Please contact The Chapman Firm for guidance and to discuss these types of situations before taking any action.

What happens to employers if they don’t comply with this Paid Sick Leave Act?

Employers who fail to provide paid sick leave will be considered to have violated Section 6 of the Fair Labor Standards Act (“FLSA”), which requires full payment of minimum wage, and will be subject to the penalties described in sections 16 and 17 of the FLSA, including attorneys’ fees and damage multipliers.

Employers who willfully terminate employees as described above will be considered to have violated section 15(a)(3) of the FLSA (the anti-retaliation section) and will be likewise be subject to the penalties described in sections 16 and 17 of the FLSA.

Can I require my employees to use their accrued sick time or PTO before I provide them with an additional two weeks of paid sick leave under the Act?

No. An employer may not require an affected employee to use other paid leave before the employee uses this Emergency Paid Sick time.

Can I ask my employees who need to take sick leave to help find a replacement while they’re gone?

No. Employers may not require that an affected employee search for or find a replacement employee to cover the hours during which the affect employee is on sick leave.

I hear my business can get reimbursed for the expense of providing this Paid Sick Leave. How does that work?

In general, private employers are entitled to a 100% payroll tax credit for sick leave benefits paid pursuant to this Paid Sick Leave Act in each calendar quarter.  The tax credit is allowed against the employer’s portion of Social Security and excise taxes.

However, the amount of the credit is limited to the caps described above: the credit is limited to 10 calendar days per employee at either $511 per day for days paid at an employee’s regular rate or $200 per day for days paid at 2/3 of an employee’s regular rate.

When does this Emergency Paid Sick Leave go into effect?

April 1, 2020.

How long will the Emergency Paid Sick Leave have to be offered?

The Paid Sick Leave Act is scheduled to remain in effect through December 31, 2020. It will require an additional act of Congress to extend the Act.

My business has fewer than 50 employees, and I’m worried that these requirements will jeopardize its future – what do I do?

For now, you still must comply with the Paid Sick Leave Act. However, the Act does provide the DOL with authority to issue regulations which exempt such small businesses only from the requirement of providing paid sick leave when employees need it to care for their children due to school or childcare center closings. The Chapman Firm will post an update  when the DOL issues such regulations or other guidance.

 

For additional questions about preparing your workplace for implementation of these new rules, contact The Chapman Firm.