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Congress has made dramatic changes to paid leave requirements that every small and medium-size business must quickly understand. At Protorae Law, we have been monitoring this legislation since it was introduced, and we are ready and committed to providing our clients with timely guidance in the midst of an uncertain and challenging business environment.
In an effort to alleviate economic pressures experienced by employees unable to work as a result of the coronavirus pandemic, yesterday legislation was enacted that will affect small and medium-size businesses throughout the country. The  makes important changes to leave requirements of the Family Medical Leave Act and also enacts the Emergency Paid Sick Leave Act. This new legislation requires businesses to continue paying eligible employees who take time off from work for specified reasons because of the coronavirus pandemic.
Family Medical Leave
The Emergency Family and Medical Leave Expansion Act created an obligation for small and medium-size businesses to pay certain employees if they are unable to work due to school closures or unavailable childcare as a result of the coronavirus.
The following are the key features that employers must be aware of:
  • The changes to the FMLA apply to employers with fewer than 500 employees. This means that these new FMLA obligations apply to businesses even if they have only 1 employee.
  • Eligible employees are those employed for at least 30 days prior to the leave request.
  • The employee must be unable to work or telework due to a need for leave to care for a child if school or childcare are closed or unavailable due to COVID-19 public health emergency.
  • First 10 days of FMLA leave may be unpaid.
  • Any FMLA leave after 10 days must be paid by the employer at a rate not less then two-thirds of the employee’s regular rate of pay and hours (employees with varying schedules require more in-depth calculation).
  • Payment shall not exceed $200 per day or a total of $10,000.
  • Subsequent regulations may be coming that would exempt small businesses with less than 50 employees under certain conditions.
Paid Sick Leave
The Emergency Paid Sick Leave Act requires small and medium-size businesses to provide employees with paid sick leave for a variety of coronavirus-related reasons.
The following are the key features of the Emergency Paid Sick Leave Act that you need to be aware of:
  • The Emergency Paid Sick Leave Act applies to businesses with fewer than 500 employees. This means that these new paid sick leave obligations apply to businesses even if they have only 1 employee.
  • Employees are entitled to paid sick time due to the following:
    • The employee is subject to a quarantine or isolation order related to COVID-19;
    • The employee has been advised by a health care provider to self-quarantine due to COVID-19;
    • The employee is experiencing COVID-19 symptoms and is seeking medical diagnosis;
    • The employee is caring for someone ordered or advised by a health care provider to isolate or quarantine themselves; or
    • The employee is caring for a son or daughter whose school or place of care is closed or unavailable due to COVID-19 precautions.
  • Full-time employees are entitled to 80 hours of paid sick time.
  • Part-time employees are entitled sick time equal to the number of hours worked, on average, over a two-week period (part time employees with varying hours require more in-depth analysis).
  • Compensation must be at the greater of the employee’s regular rate of pay or the Federal or state minimum wage subject to the following limitations:
    • Paid sick time shall not exceed $511 per day or $5,110 in total if the sick time is taken because of a coronavirus-related isolation, quarantine, or symptoms; and
    • Paid sick time shall not exceed $200 per day and $2,000 in total for any other permitted use (e.g., the need to provide childcare).
  • Employers may not require employees to use other paid leave before using paid sick leave.
  • Employers must post a notice concerning these paid sick leave rights (available soon).
  • Failing to pay employees sick leave or terminating them as a result of a request for paid sick leave are treated as violations of the Fair Labor Standards Act and subject to similar penalties.
  • Subsequent regulations may be coming that would exempt small businesses with less than 50 employees under certain conditions.
For both the paid family medical leave and paid sick leave requirements, businesses may be permitted to claim 100 percent of the qualified amounts paid as a credit against other employment-related taxes. If the credit exceeds the employment taxes, it will be treated as an overpayment potentially subject to refund. Consult with a tax professional for further information concerning any tax implications.
For more details, please contact Employment Law attorneys, Brian Chandler or Michael Stamp, and we can further explain how these new and important employment laws may affect your business. These requirements will, undoubtedly, be costly and confusing to many small and medium-size businesses, and they will be subject to further implementing regulations in the weeks ahead. We are here to help you navigate the rapidly changing legal environment and the challenges yet to come.