As citizens of the world, we can all attest to the unforeseen disruptions and uncertainty we are experiencing with the rapid spread of the COVID-19 coronavirus pandemic. For business leaders and company owners already working to adjust workplace health and safety practices to meet the daily, even hourly, changes in recommendations and guidelines, the passing of the new coronavirus aid package means compliance obligations for employers just became a lot more complicated.
The Federal Government Is Heavily Relying on Employers for Implementation of The “Families First Coronavirus Response Act”
Designed to assist all of us in dealing with the wide-ranging effects of the coronavirus, the United States government has passed the Families First Coronavirus Response Act. The bill provides increased funding for: food assistance, Medicaid, unemployment assistance, and testing for the COVID-19 disease.
Of great interest to every employer in America, the bill contains the Emergency Family and Medical Leave Expansion Act (EFMLE) and the Emergency Paid Sick Leave Act (EPSL). This will require certain employers to provide sick benefits and leave to its employees affected by the coronavirus. Here is a summary:
EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT (EFMLE)
The EFMLE will require companies with less than 500 employees to provide up to 12 weeks of leave for those employees that have been employed for 30 days. In order to receive such benefits, employees must be unable to work or telework due to caring for a child under the age of 18 years old, if the school or place of care has been closed due to the coronavirus.
If that is not hard enough for a Human Resources department to administer, the first 10 days may consist of unpaid leave. However, the employee may elect to use any accrued vacation, personal, medical or sick leave in lieu of unpaid leave. The employer is required to pay the employee at a rate of 2/3 of the employee’s regular rate after 10 days.
But look at this wrinkle:
EFMLE authorizes the Secretary of Labor to issue regulations to exempt small businesses with less than 50 employees from the above requirements, if they would jeopardize the viability of the business as a going concern. In addition, the Secretary can exclude certain health care providers and emergency responders from the above requirements.
EMERGENCY PAID LEAVE ACT (EPSL)
The EPSL requires companies with less than 500 employees to provide paid sick time for all employees that are:
1) Diagnosed with the coronavirus and quarantined or
2) Obtaining medical diagnosis or care for experiencing symptoms of the coronavirus or
3) Complying with a requirement to quarantine due to exposure or showing symptoms of the coronavirus or
4) Caring for a family member who is complying with a requirement or recommendation to quarantine due to exposure or showing symptoms of the coronavirus or
5) Caring for a child under the age of 18 years old, if the school or place of care has been closed due to the coronavirus.
For full time employees, the amount of required paid sick time will be 80 hours at their regular rate of pay or 2/3 of their regular rate of pay to care for a family member or child. For part time employees, the amount of required paid sick time will be the number of hours the employee works over a 2-week period. The amount of paid sick time is in addition to any other paid sick time that the employee would be entitled to under the company’s existing policies.
EMPLOYER TAX CREDITS (EPSLA)
For the EPSLA the bill provides a payroll tax credit to help employers cover the cost of the wages required to be paid. The credit cannot exceed $511 per day for employees taking time off under situations for their own health. The credit cannot exceed $200 per day for family care. The maximum number of days for the credit calculation is 10 days.
For wages paid under the EFMLE the amount of credit is $200 per day, limited to an aggregate of $2,000 per employee. Under both situations, the amount is refundable should the credit exceed the amount of payroll taxes for the quarter.
This is the beginning of a long, hard road for employers. Employers are the tax collectors, the health care provider and the government compliance officer. Not only do we have to fight a medical virus with many unknowns, employers have the new assignment to care for employers and their families to a greater extent.
At Employer Advantage, we are working diligently with our employer clients to ensure they are informed and in compliance with increasing obligations as well as helping them to mitigate both the human and financial strain of the coronavirus epidemic.
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