Interview With A Lawyer on COVID-19

I had the opportunity to speak with Loren Speziale, Esquire from the law firm of Gross McGinley, LLP about the newly enacted Families First Coronavirus Response Act.  Here are the takeaways:

Will this impact my small business?

Yes. From April 2, 2020 to December 31, 2020 businesses with under 500 employees will be subject to provide Paid Emergency Family and Medical Leave and offer Emergency Paid Sick Leave to certain eligible employees.

For those businesses that are required to pay this paid time off to employees, the government will provide a tax credit for 100% of the cost to the employer.  Also, these wages will not be subject to the employer portion (6.2%) of the Social Security Tax.

What is the Emergency Family and Medical Leave coverage?

This is an amendment to the Family and Medical Leave Act which typically applies to employers with 50 or more employees.  Your employees may take up to 12 weeks of job protected leave IF the “employee needs to care for a child (under 18 years of age) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.”  The public health emergency is an emergency related to COVID-19.

This means you cannot fire them while on leave for the reason stated above and they must be restored to their position upon their return to work, subject to a few exceptions. You DO NOT need to pay the employee for the first 10 days, but are required to do so for the remainder of their leave. Employees can use the Paid Sick Leave, or any other PTO they may be entitled to, during the first 10 days if they so choose to.

How much do I need to pay them under the Emergency Family and Medical Leave provision?

Employees eligible for leave after the expiration of the initial 10-day period will be entitled to an amount equal to two-thirds of their regular rate of pay for the number of hours that employee would normally be scheduled to work, up to a cap of $200/day (up to an aggregate of $10,000).

What is Emergency Paid Sick Leave?

This is law requiring you to pay certain employees for sick leave, separate from any other paid time off that you offer them.  You will be required to provide full-time employees with 80 hours of paid sick time and part-time employees with paid sick time in an amount equal to that employee’s average number of hours worked in a two-week period to use if they are unable to work or work remotely due to a need for leave because:

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 concerns related to COVID–19.
3. The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Employees cannot carry over this paid sick leave into 2021.

How much do I need to pay them per Paid Sick Leave?

Full time employees receive leave at the regular rate. Part time employees are based on the average number of hours worked in a two-week period over a 6-month period. Both rates are subject to one of two limits, depending on why the employee is taking leave.  Specifically:

$511.00 limit per day (Similar to an employee making $132,860 in pay) if leave is based upon reasons 1-3.

$200.00 limit per day (Similar to an employee making $52,000 in pay) if leave is based upon reasons 4-6.

What can I do now to be proactive?

1. You luckily have until April 2^nd to plan and prepare for this regulation.
2. Post the notice to all employees that the Secretary of Labor will provide within the next week.
3. Create a way to track Emergency Sick Time for all employees
   1. Know who are full time. Know who exceed the limits.
   2. Know who are part time. Know how many hours to provide them.
   3. Determine what the regular rate of pay will need to be paid if an employee becomes eligible.
4. Stay up to date on additional provisions passed in your state. Some may require additional
5. If you have under 50 employees, compile information that would demonstrate that the imposition of the leave would jeopardize the viability of your business, if applicable.
6. Evaluate the need to furlough, layoff, or reduce the hours or compensation of employees in response to the shutdown or slowdown of your operations.

Thank you to Loren Speziale, Esquire for her input.  Loren can be found at Gross McGinley, LLP (www.grossmcginley.com) and reached at lspeziale@grossmcginley.com or 610-871-1331.