As we are sure you are aware, Governor Wolf directed the closure of physical locations for all non-life sustaining businesses in Pennsylvania as of Monday, March 23. To the extent you and your employees may work from home, this order may be of minimal consequence to your business. However, what if you and your employees cannot work from home? What if your employees are not able to work because they are sick, or because they have no child care options for their children whose schools or day care centers are closed? Here is some information to assist you in understanding your obligations at this time:
President Trump recently signed into law the Families First Coronavirus Response Act (P.L. 116-127) (“FFCRA”), which provides for paid sick leave and expands unemployment benefits, among other things like free coronavirus testing for everyone. The FFCRA contains amendments to the Family and Medical Leave Act and a new Emergency Paid Sick Leave Act. Below are frequently asked questions along with answers.
Paid Sick Leave – Emergency Family and Medical Leave Expansion Act (FMLA expansion):
Which employers are affected? Employers with fewer than 500 employees must adhere to the newly enacted provisions regarding FMLA paid sick leave.
Which employees are eligible for FMLA paid sick leave? Eligible employees are those that you have employed for at least 30 days.
When do I have to pay my employees for sick leave? Paid sick leave requirements may apply in various situations (keep reading below for other paid sick leave requirements under the Emergency Paid Sick Leave Act). Here is a summary of the new requirements under FMLA:
In the situation where an employee is unable to work (or telework) due to the need to care for the employee’s child (under age 18) because the child’s school or day care provider is closed or unavailable due to an emergency declaration by a federal, state or local authority, the first ten (10) days may be unpaid leave or the employee may use accrued paid leave (vacation, sick or personal). The employer must provide paid leave for each day that such employee takes after the first ten (10) days at 2/3 of the employee’s regular pay rate multiplied by the normal hours worked by the employee each pay period. If the employee does not have a normal number of hours weekly, you calculate the amount due by averaging the number of weekly hours the employee worked (or took paid time off) for the past six (6) months. The paid leave amount may not exceed $200/day or $10,000 in the aggregate. As such, this paid leave at the maximum rate of $200/day could not exceed 50 work days.
What if the employee’s position no longer exists when the employee is ready to resume work? This part of the FMLA expansion is tricky and full of “if’s” and “or’s”. In short, if you have fewer than 25 employees, you might not have to restore the employee to his or her position after the FMLA expansion leave is over if the employee’s position no longer exists due to economic conditions. If you have an available equivalent position or the employee’s original position later becomes available, however, you may have to offer the position to the employee.
Can I get an exemption? The Law authorizes the Secretary of Labor to issue regulations regarding exemptions if the business has fewer than 50 employees and the paid sick leave requirements would jeopardize the business as a going concern. To our knowledge, such regulations have not yet been issued by the Secretary of Labor.
*****NOTE that other provisions regarding FMLA leave requests still apply. In order to be eligible for these provisions, the employee must request FMLA leave and follow the other FMLA leave requirements you already know and use if you employ more than 50 people. If you need assistance with FMLA requirements, please don’t hesitate to contact us for further information.
Paid Sick Leave: Emergency Paid Sick Leave Act
Which employers are affected? This law applies to all employers of 500 or fewer employees (regardless of how long an employee has worked for you), except health care providers and emergency responders.
Which employees are eligible for paid sick leave? Eligible employees include those that cannot work (or telework) due to the following:
1. The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
2. The employee has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
3. The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. The employee is caring for an individual subject to a quarantine or isolation order or caring for someone that has been advised by a health care provider to self-quarantine due to COVID-19 concerns;
5. The employee is caring for the employee’s child whose school or daycare is closed or unavailable due to COVID-19 precautions;
6. Any substantially similar conditions as specified by the Secretary of HHS.
So who is exempt? Employees of health care providers and emergency responders. The Secretary of Labor is expected to announce a process for small businesses employing less than 50 people to seek an exemption from the law’s requirements.
When do I have to start paying my employees for sick leave? The law takes effect no later than 15 days after its enactment. As such, the requirements for paid sick leave under this law do not start until April 2, 2020. The law expires on December 31, 2020.
What are the paid sick leave requirements? There are two categories here, and it is therefore, important to find out from each employee his or her reason for seeking paid sick leave.
The first category applies to employees taking paid sick leave pursuant to reason numbers 1, 2 or 3 in the list above. These employees receive paid sick leave at their regular rate of pay not to exceed $511/day or $5,110 in the aggregate.
The second category applies to employees taking paid sick leave pursuant to reason numbers 4, 5 or 6 in the list above. These employees receive paid sick leave at 2/3 of their regular rate of pay not to exceed $200/day or $2,000 in the aggregate.
How do I calculate hours for paid sick leave for part-time employees whose schedules vary from week to week? Take the average number of hours the employee was scheduled to work per day over the last six months (and include hours for which the employee took leave). If the employee hasn’t worked for the last six months, use the reasonable expectation of the average number of hours per day that was expected upon hiring the employee.
What else do I need to know?
*The Secretary of Labor will issue guidelines to assist employers in calculating paid sick leave.
*After the first workday of receiving paid sick leave, you may require the employee provide you with reasonable notice regarding the continued receipt of paid sick leave.
*You cannot require your employees to uses other accrued paid leave (vacation, sick or personal leave) first before paying the sick leave permitted under this law.
*You cannot require the “sick” employee to find a replacement to cover the “sick” employee’s hours.
*You must post the notice prepared by the Secretary of Labor regarding the law’s requirements in a conspicuous place at your place of business. The notice is not yet been prepared, though.
*You cannot discharge, discipline or otherwise discriminate against an employee who takes leave under this law or has instituted any proceeding under or related to this law.
Can I get an exemption? The law permits the Secretary of Labor to issue regulations to exclude certain health care providers and emergency responders from the law and to exempt small businesses with less than 50 employees from the law if imposing the law’s requirements would jeopardize the viability of the business as a going concern. As of today, these regulations have not been implemented.
What do I get out of this law? There will be immediate tax credits available if you have to provide paid sick leave to any employees. You should discuss these with your payroll processor or tax professional.
If you have any questions or concerns, please reach out to us. We are truly grateful for your trust and confidence over the last 20 years. We all will get through this situation together. Rest assured that we are here to assist you in any way we can, as we share our best wishes for the health and safety of those close to you.