Emergency Paid Leave Laws Go Into Effect on April 2, 2020
In response to the ongoing COVID-19 outbreak, on the evening of March 18, 2020, the President signed into law two emergency paid leave laws intended to provide relief to workers. Significantly, the paid leave must be provided by you – the employer.
Employers will bear the full cost of making these payments initially. However, the new law provides that employers will be entitled to a tax credit at the end of each calendar quarter equal to 100% of the required, qualified Emergency Paid Sick Leave and Emergency Paid FMLA leave compensation paid during this crisis.
These emergency measures will go into effect on April 2, 2020, and will expire on December 31, 2020 unless extended by Congress. The emergency bills apply to employers with 500 or fewer employees.
FMLA Emergency Expansion
The first measure expands the Family & Medical Leave Act to provide paid leave to employees who must stay home to care for their child due to school or daycare closure and who are not able to work from home. This is the only reason employees may receive paid leave. Eligible employees may take up to 12 weeks of paid leave, at 2/3rds of their regular salary. The benefit is capped at $200 per day or $10,000 in the aggregate. There is a 10-day “waiting period” before the benefit entitlement kicks in. During this time, employees may use paid vacation, sick time, or PTO to receive income.
In addition, this expansion package expands traditional FMLA job restoration obligations to smaller employers. Under the emergency expansion, employers with 25 or more employees will be required to return any employee who has taken Emergency FMLA to the same or equivalent position upon the return to work. Employers must make reasonable attempts to return the employee to an equivalent position and requires an employer to make efforts to return the employee to work for up to a year following the employee’s leave.
Emergency Paid Sick Leave
Significantly, this benefit is in addition to other sick leave provided by the employer. This means if an employee has exhausted his or her Washington State or Seattle Paid Sick and Safe Leave (PSSL), the employee is still entitled to 80 hours of sick leave under this emergency law.
The law allows full-time employees to take paid sick leave because the employee is:
- Subject to a federal, state or local quarantine or isolation order related to COVID-19;
- Advised by a health care provider to self-quarantine due to COVID-19 concerns;
- Experiencing COVID-19 symptoms and seeking medical diagnosis;
- Caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
- Caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
- 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.
Notably, paid leave for reason 4, above (caring for a person subject to an isolation order or self-quarantine) is not limited to family members.
Employees taking leave for reasons 1-3 above are entitled to receive their regular rate of pay for the duration of the leave. However, the daily rate is capped at $511, with a maximum aggregate benefit of $5,110. If taking leave for reasons 4-6, the rate of pay is 2/3rds of the employee’s regular rate, with a daily cap of $200 and an aggregate cap of $2,000.
These new emergency acts provide that employers who pay out leave benefits for qualifying Emergency Paid Leave or Emergency Paid FMLA reasons will be entitled to a 100% refund of these payments via federal tax credit at the end of the year. However, clients should exercise caution in relying on this tax reimbursement. Only qualified emergency paid leave is reimbursable through this tax credit. Please be sure to consult counsel or your tax advisor on what may qualify as reimbursable before relying on this tax credit provision.
Please do not hesitate to reach out to employment counsel with questions. We are ready to help you navigate the workplace challenges created by the COVID-19 pandemic and related announcements by government and health officials.
Cairncross & Hempelmann Employment Group
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.