Emergency Coronavirus Bill: What Employers Need to Know


Saturday morning the House passed legislation that has HUGE implications for employers.


There’s still a lot we don’t know, but we do know:


Employers with under 500 employees must provide 2 weeks of paid sick leave at the employee’s regular rate and up to 10 additional weeks of paid family medical leave at 2/3 the employee’s regular rate.

This is a sweeping program that will allow employees paid time off for: self-isolating, obtaining medical treatment, caring for family members with the virus, and caring for a child if their school or place of care has closed.


Politicians are promising small businesses will not bear the costs of this legislation. There are tax credits to offset the costs of paid leave, but the limitations and timeline for reimbursements in the bill make me question whether that will be enough to cover the costs of this paid leave (especially in a timely manner for companies that are struggling with revenue).


Congress and the President have indicated there are more bills to come. Hopefully, that includes additional relief for the medium-sized companies who are bearing the burden of this bill. The Senate may tweak some of this as well, but here’s what we know about the bill that has already passed the House.



Paid Sick Leave – Employers with Less than 500 Employees


The bill establishes a new paid sick leave program that calls for employers with less than 500 employees to immediately grant 14 days of paid sick leave that can be used for self-isolating, obtaining medical treatment, caretaking family members, and parents of whom children’s schools or places of care have closed.


For employers who already provide paid sick leave, these additional two weeks must be made in addition to the leave already provided.



Details of Paid Sick Leave


ALL EMPLOYERS with under 500 Employees* will be required to provide PAID Sick Leave.


  • Full-time employees to receive 80 hours

  • Part-time employees to receive an amount of sick leave equal to their average hours worked in a two-week period


* There may be an exemption for employers with under 50 employees if the Labor Department determines that providing paid leave “would jeopardize the viability of the business.” However, there is no guidance on how to qualify for this exemption, when/how that determination will or would be made.


Applies for self-isolating, obtaining medical treatment, caring for family members who have coronavirus or to care for a child if their school or place of care has closed.


This paid time off is in ADDITION to all other paid time off options offered by the Employer.


Compensation must be the greater of the following:


  • Employees regular rate; or

  • Federal or State Minimum Wage ($7.25/hour in KS and $9.45/hour in MO)

  • Additional calculation methods for varying schedule employees (more guidelines are promised to be issued to help with these calculations)


There will be a required notice that you’ll need to post for all employees (to come out within 7 days of enactment).


There is no requirement to pay unused sick leave at termination.


In addition to two weeks paid sick leave, the bill also provides major expansions to FMLA.



Sweeping FMLA Changes - Including Paid Leave


The House bill expands the existing family and medical leave program – providing paid leave for employers with less than 500 employees.


Under current law, employers with 50 employees are required to give up to 12 weeks unpaid job protection.


The House bill, however, provides paid leave for workers of all companies with less than 500 employees:


if they have been diagnosed with the coronavirus, if they are caring for a family member who has it, or if they are caring for a child or another dependent due to a school or care facility closing.

The bill would provide those who qualify with two-thirds of their average monthly earnings, for up to 10 weeks. The benefits can be paid retroactively and will be available for those who had to leave work starting January 19, 2020 (the first date of a confirmed Covid-19 case in the USA).



Details of Increased FMLA


Employers with less than 500 employees will be required to provide PAID Family Medical Leave Time.


  • All employees who have worked at least 30 days are eligible for this benefit

  • Again, there is a caveat for employers with under 50 employees if the Secretary of Labor decides imposition would jeopardize the viability of the business


The first 14 days of Emergency FMLA can be unpaid (because the required Paid Sick Leave), after 14 days paid leave shall be calculated based on:


  • An amount not less than 2/3 the employee’s regular rate, and

  • The number of hours the employee would otherwise normally be scheduled to work

  • Varied hour employees = average number of hours employee was scheduled per day over the previous 6 months (including all leave taken). Or, if the employee has not worked 6 months, the reasonable expectation of the employee at the time of hiring of the average number of hours per day that the employee would normally be scheduled to work


Employer’s with more than 25 employees must restore the employee to the same or equivalent position as they had before the leave.


Employer to receive payroll credit for 100% of wages paid under this leave - but will it apply quickly enough?



Tax Relief


IN GENERAL—any wages required to be paid by reason of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act shall not be considered wages for purposes of section 20 3111(a) of the Internal Revenue Code of 1986.


There is a payroll tax reimbursement maximum of $511 per day of paid sick leave provided for each employee; and 100% of paid FMLA time, but with a cap of $200/day or $10,000 in aggregate per individual.



Conclusion


These are unprecedented changes affecting all but the largest employers in the United States. I will continue to provide updates as new information comes out. However, all employers with less than 500 employees should immediately prepare for paid sick leave and paid family medical leave.


OutrightHR, LLC provides the latest news and practical information for employers. The article is published by attorney, Brian Huston for general informational and educational purposes only. The article does not give legal advice or attempt to offer solutions to individual problems.

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