Common questions for emergency paid sick leave and family leave for the coronavirus outbreak for businesses with fewer than 500 employees.
The Families First Coronavirus Response Act contains significant paid sick leave provisions for employees of small businesses that have been impacted by the coronavirus (COVID-19) outbreak. There are many questions about how it impacts small businesses and their employers. We try to answer these.
Which businesses are covered under the paid leave law?
The law provides leave for employees of small and mid-size businesses with fewer than 500 employees. This represents 52% of the American workforce. The employee must have been employed for least 30 days prior to taking the leave in order to qualify.
Are there exceptions?
Yes. The law gives the U.S. Labor Secretary can exempt businesses with fewer than 50 employees if they can show providing the leave would put them out of business, as well as businesses that are providing services on the frontline of the crisis such as hospitals, emergency responders and nursing homes.
How much leave does the law provide?
The law provides two weeks paid leave for workers who are sick, quarantined, or attempting to get preventive care or a diagnosis for the coronavirus. It also covers the worker if he or she is providing care for sick family members.
It provides 12 weeks of paid leave to employees who need to care for children because schools or childcare facilities are closed due to the coronavirus. However, the law stipulates that the employee must be in a situation where they are unable to work or “telework.”
How much are employees paid out for leave?
Employees who take the two weeks of sick leave are to be paid out at 100% of their normal salary, but this is capped at $511 a day. Employees who take the paid leave to care for family would be paid at 67% of their normal salary, but this is capped at $200 per day.
Are part-time employees covered?
Yes. Part-time workers will be paid based on the amount they typically earn in a two-week period, and subject to the daily caps put in place for sick and family leave.
Are gig workers covered?
Yes. Self-employed can receive the leave based on their typical daily income. However, they would receive compensation in the form of tax credit.
How are employers going to be compensated for the leave?
Businesses will be paid back in the form of a payroll tax credit within the tax period, which is the calendar quarter.
If the amount the employer pays workers for the leave exceeds the amount the employer owes in taxes, they can request a refund any excess credit.
Can employers require workers to find a replacement for their shift?
No. Under the provisions of the emergency leave law for the coronavirus outbreak, employers are not allowed to force employees to find a replacement worker in order to take the leave.
Can employers require workers to use other existing leave before using the emergency paid sick leave?
No. Employers are barred from requiring employees to use previously existing paid leave policies they already provide before taking the sick leave granted through the emergency relief law.
Are employers required to pay out unused leave from the emergency act?
No. The leave specific to this law does not carryover and is not required to be paid out upon termination of employment.
When does this leave go into effect?
The Coronavirus Paid Sick Leave Law goes into effect 15 days after the president signed the bill into law. That means it goes into effect on April 2.
Is this leave permanent?
No. It’s intended to last only through the crisis and expires on Dec. 31, 2020.
Do employers need to post anything?
Yes. The law states that employers need to post in a conspicuous location where they normally provide notices a new notice which the Secretary of Labor is to provide within 7 days.
Are there penalties for failing to comply?
Yes. The penalties specified depend on the nature of the offense, but are the same as described in the Fair Standards Labor Act (FSLA).
How much of a gap does this cover for workers?
Seventy-three percent of private industry workers have access to paid sick leave, according to the Bureau of Labor Statistics.
But that number drops for smaller-sized businesses. For businesses with less than 100 employees, only 65% have access to paid sick leave. For businesses with 100 to 499 workers, 80% of workers have access to paid sick leave.
Eighty-nine percent of businesses with 500 or more workers have access to paid sick leave.
Editor’s note: As the coronavirus outbreak continues, we are attempting to provide information as soon as possible to small businesses. The information provided is subject to change and revision. This information does not constitute legal advice and should not be a substitute for advice from a legal professional.