Last night President Trump signed into law a Coronavirus relief package that includes provisions for free testing for Covid-19 and paid emergency leave. This bill contains several items that will affect leave available to your employees and payments for such leave. Our current FMLA has been expanded, and Emergency Paid Sick Leave Act was created. Here is a summary of what the bill does.
Emergency Family and Medical Leave Expansion Act
This Act significantly amends and expands FMLA on a temporary basis. Effective April 2, 2020, companies with fewer than 500 employees must now offer FMLA to employees who have worked for the employer for at least 30 days for a COVID-19 designated reason. A portion of this leave will be paid leave.
- The first 10 days of leave is unpaid. Paid leave is from day 11 up to 12 weeks of time off.
- Paid amount is at least two-thirds of employee’s regular wages not to exceed $200 per day and $10,000 in aggregate.
- Reasons for leave include illness from the coronavirus, caring for a close family member under quarantine, or caring for a minor child who cannot go to school or daycare because of closure due to a public health emergency.
- Provides the opportunity for the Department of Labor to exempt small businesses with fewer than 50 employees where the business can establish that the imposition of such requirements would jeopardize the viability of the business as a going concern.
- The employee shall provide the employer with a notice of necessity for leave.
- The Act ends on December 31, 2020.
- Excludes certain health care workers and emergency responders.
Emergency Paid Sick Leave
An employer with fewer than 500 employees must provide full-time employees (regardless of duration of employment prior to leave) with 80 hours of sick leave.
- Available to employees who are subject to quarantine or isolation related to COVID-19, experiencing symptoms, and seeking medical diagnosis and paid at the employee’s regular rate of pay.
- Available to employees who are caring for an individual subject to quarantine or caring for the employee’s child if school or daycare has been closed and unable to work or telework paid at two-thirds the employee’s regular rate of pay.
- Full-time employees are provided 80 hours of paid time off.
- Part-time employees are eligible for an average number of hours from a 2-week period.
- Paid sick time does not carry over from 1 year to the next and may be in addition to paid sick leave currently provided by employers.
- The paid sick leave wages are limited to $511 per day or $5,110 per employee for personal use and $200 per day or $2000 per individual to care for others.
- An employer may not require an employee to first use other paid leave.
- Employer shall post and keep posted in a conspicuous place a notice to be prepared by the Secretary of Labor.
- Unlawful for any employer to discharge, discipline, or discriminate against any employee taking leave or who has filed a complaint related to this Act.
Tax Credits for Paid Sick and Paid Family and Medical Leave
The bill provides a series of tax credits for employers who are required to provide Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave. Taxes are allowed against the employer portion of Social Security Taxes.
- Tax credit of 100% of qualified sick leave wages paid due to the Emergency Paid Sick Leave Act up to $511 per day or $200 per day if caring for a family member or child for up to 10 days per employee.
- Tax Credit of 100% of qualified family leave wages paid up to $200 per day for each individual up to $10,000 per quarter.
- May include health benefits paid in proportion to sick wages paid.
- Wages paid under Emergency FMLA and the Emergency Paid Sick Leave are not subject to FICA taxes.
Emergency Unemployment Insurance Stabilization and Access Act of 2020
- Provides funding to the states for additional unemployment benefits.
- Requires employers to provide notification of the availability of benefits to employees at the time of separation. Model language to be provided by the Department of Labor.
- Prevents states from charging employers for unemployment benefits paid for COVID-19 due to illness or quarantine requirements.
- Eliminates claimants waiting period.
- Eliminates requirement of claimants to actively pursue work.
- Applies to claims made after the enactment of this act and prior to Dec. 31, 2020.
Free Virus Testing
- Requires insurance providers to provide free testing.
- Provides funding for testing for those without insurance.
- IRS has allowed the no copay for testing to not violate HSA requirements on High Deductible Health Plans.
We must also continue to keep focus on existing laws. Those include OSHA, FMLA, FLSA, ADA, HIPAA, and unemployment. I will summarize how each of those affects us here.
OSHA – Employers are required to maintain safe workplaces. In this case, employers must take measures to limit employees’ exposure to the virus. This means working to limit close contact between coworkers, training on how to clean, regularly clean areas with more traffic.
FMLA – The Family Medical Leave Act requires employers with 50 or more employees within a 75-mile radius to offer up to 12 weeks of medical leave to employees for an illness involving themselves or an immediate family member. Under the FMLA an employer is not required to pay the employee.
HIPAA – HIPAA requires employers to keep private all medical information of its employees and their dependents. Disclosing the infection of an employee would be a violation of the law.
ADA – The American with Disabilities Act protects workers from discrimination based on a disability. A COVID-19 diagnosis would be a protected disability. ADA requires employers to make reasonable accommodations to employees with an illness or disability. As a result, to protect other employees, an employer may ask an infected employee not to come to work. However, the employer may be required to offer telework to the employee.
FLSA – Unless some other provision takes precedent (such as FMLA), the Fair Labor Standards Act should be followed. In general, employers are required to pay hourly employees only for the hours they actually work, whether working from home or at the employer’s office. Salaried exempt employees must receive their full salary in any week in which they perform any work. Accrued Paid Time Off can be used to cover any missed days to create a whole week. If a salaried exempt employee does not perform any work during a week, you are not required to pay for that week.
Unemployment – We have received a lot of questions about pay and layoffs. As of now, unemployment laws have not changed. Unemployment benefits would be available to any employee where compensation has been reduced for any reason without cause by the employee.
- In the event pay continues but is reduced, the employee would be eligible for benefits for the difference in their historic pay amounts and their new pay amount.
- In the event of a temporary layoff, employees would be eligible for benefits for the time period they are off.
ESS will be continually monitoring legislation and ensuring that our customers remain in compliance. We understand that paying employees is a vital part of your business operations. We are doing the following to ensure services will be available during these everchanging times.
- Operating from home outside of regular business hours for some team members.
- Limiting traffic of vendors and others in our offices.
- Monitoring vendors and their contingency plans.
- Implementing social distancing measures and disinfecting areas of shared workstations.
- Requiring team members to practice good health habits and stay at home if not well.
- All employees currently have access to work from home and will be required to do so if the need arises.
- ESS maintains offsite locations in three states where checks can be printed and distributed.
- Cross training employees in multiple functions should an employee become sick and need time off.
We appreciate you trusting Employer Support Services to walk through these uncertain times with you. We will all get through this challenge together. As always, feel free to contact our team with any questions.