Paid Sick Leave in These Uncertain Times

The Families First Coronavirus Response Act provides much-needed relief for small business owners – and their employees.

One feature of this Act includes a move that is almost unprecedented. The Act mandates that all employers with fewer than 500 employees offer paid sick leave for employees who are impacted by the coronavirus outbreak (COVID-19) – but the good news is that the federal government will cover the costs of such paid sick leave. Small business owners will need to absorb the administrative burdens of implementing these new obligations – but may be able to maintain good employees by being able to offer these benefits.

How much paid time off will be provided?

The Act requires that businesses provide up to 10 days (or 80 hours) to all full-time employees – and a prorated amount for part-time employees.

Who qualifies for the benefits?

Employees may qualify for these paid sick leave benefits under one of three circumstances:

  1.  Employees qualify if they are subject to the government quarantine restrictions or isolation orders.
  2. Employees qualify if they have been instructed by a healthcare provider to self-quarantine.
  3. Employees qualify if they are actively seeking a medical diagnosis of COVID-19 and are exhibiting symptoms.

Under each of these scenarios, employees may be eligible to receive 100% of their pay for up to 10 days. The federal government will cover the costs of these benefits.

Caregiver benefits are also provided.

In addition, the Act also provides certain caregiver benefits. Specifically, employees may qualify to receive up to two-thirds of their pay for up to 10 days in the event that they are either caring for a person who has been quarantined, caring for a child whose school is closed and daycare is not available, or (in a catch-all provision) experiencing what is referred to as “equivalent conditions” which will be defined by future regulation.

While the details are still forthcoming, in general terms, the mechanism for securing federal government funding for this paid leave initiative will be through authorized credits to employers on their federal tax withholding obligations or through advanced funds to be provided by the Treasury Department.

Businesses will not be expected to front the payments for these paid sick leave benefits.

For more questions about this new Act, please contact Frank Botta or at (724) 776-8000.

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