Coronavirus Paid Medical Leave and Your Small Business

Overview

In response to the global COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020 by President Donald Trump. It will take effect on April 1, 2020 and is set to expire Dec 31, 2020. The Act provides employees with paid sick time if they are unable to work onsite or remotely for qualified reasons related to COVID-19 and employers with refundable payroll tax credits to compensate for employee paid leave. The FFCRA includes two acts: the Emergency Paid Sick Leave Act and the Emergency FMLA Act.

Emergency Paid Sick Leave Act:

Under the FFCRA Emergency Paid Sick Leave Act, full-time employees are eligible for two weeks of paid sick time. This benefit applies to all employees regardless of how long the worker has been employed. These benefits aim to protect employees from having to choose between foregoing a paycheck and staying home and caring for themselves and others due to COVID-19.

Who is eligible?

Employees who meet any of the following conditions qualify for emergency paid sick leave under the FFCRA:

1. There is a quarantine or isolation order due to the COVID-19 in their area that prevents the employee's ability to travel.
2. A health-care provider suggests that the employee self-quarantine due to the COVID-19.
3. The employee experiences COVID-19 symptoms and is in the process of determining if they have contracted the virus.
4. The employee is caring for an individual who is under quarantine.
5. The employee needs to care for their child due to daycare and school closures relating to COVID-19.
6. Any other situation similar to the five above as specified by the Department of Health and Human Services.

Emergency Paid Sick Leave Act Benefits:

• Full-time employees are entitled up to 80 hours of paid sick leave
• Paid sick leave for full-time employees is subject to a limit of $511 per day and a total amount of $5,110 for their own care and $200 per day and a total amount of $2,000 if the employee must care for someone else impacted by COVID-19.

Emergency FMLA Act

Also included in the FFCRA is an expansion of the existing Family and Medical Leave Act (FMLA) called the Emergency FMLA Act. The Emergency FMLA Act provides employees who are unable to work due to school closures or loss of child-care due to a public health emergency 12 weeks of job-protected leave. Workers must be employed for at least 30 days to qualify for the public health emergency leave under FMLA.

Emergency FMLA Act Benefits:

• First 10 days of leave can be unpaid
• Leave must be paid at two-thirds the employee's regular rate of pay
• Leave pay is subject to a limit of $200 per day and a total amount of $10,000

Which companies are impacted?

All employers with fewer than 500 employees are required to provide FFCRA leave to employees who meet the defined requirements. There is an exception for small businesses with less than 50 employees if the viability of the company is threatened. In these circumstances, the small business may qualify for an exemption, but must receive permission. 

FFCRA Employer Tax Credits 

Eligible employers that are required to provide FFCRA leave benefits will receive 100% reimbursement through payroll tax credits on a quarterly basis. If a refund is owed, the IRS has stated that it will be sent to businesses as quickly as possible. Included in the credit is the cost of health insurance. You can read more about the FFCRA Employer Tax Credits here.

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