As part of the Families First Coronavirus Response Act (HR 6201),[1] employers of less than 500 employees face mandatory provision of sick time[2] and paid family leave[3] but are eligible for a refundable payroll tax credit to offset the costs.  The bill was signed into law by the President on March 18, 2020.

The analysis below is based on a review of the provisions written immediately after the law was enacted.  Readers should confirm all details independently.  As well, the Department of Labor and other agencies will be issuing guidance in the application and interpretation of these provisions.  Readers need to watch for such developments as they occur.

Paid Sick Time

The conditions under which the two week paid sick leave must be paid are the following when the employee is unable to work or telework for any of 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 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.[4]

However, the employer of an employee who is a health care provider or an emergency responder can exclude such employees from this provision.[5]

The amount of sick pay, subject to the maximums discussed next, is set at:

• The employee’s standard rate of pay (or minimum wage if greater) for leave taken due to situations (1), (2) and (3) and

• Two-thirds of that amount for leave taken due to situations (4), (5), and (6).[6]

The maximum amount of paid sick time is

• $511 per day ($5,110 in total) for leave paid due to situations (1), (2), and (3) and

• $200 per day ($2,000 in total) for leave paid due to situations (4), (5), and (6).[7]

The duration of the paid sick time is 80 hours for full-time employees and, for part-time employees, equal to the average hours that employee works over a two-week period.[8]

An employer cannot require, as a condition of providing this paid sick time to an employee, that the employee find a replacement employee to cover his/her hours.[9]

The employer must provide this paid sick time to an employee regardless of how long the employee has been working for the employer.  The employee may first use this special paid sick time before using other paid sick time available from the employer.[10]

An employer is required to post and keep posted in conspicuous places on the employer’s premises where notices are normally place a notice regarding this act.  The Department of Labor will make a model notice available by March 26, 2020.[11]

Employers are barred from retaliating against employees for using leave under this Act or filing a complaint or taking any action under this Act.[12]

The Act does not diminish the rights or benefits an employee may be entitled to under any

• Other state or federal law

• Collective bargaining agreement or

• Existing employer policy.[13]

Nor does the law require an employer to provide any sort of financial or other reimbursement to an employee after the employee’s termination, retirement, resignation or other separation from service.[14]

Employers who pay such leave will be eligible for reimbursement via a credit against FICA taxes paid.[15]  Any credit in excess of the taxes actually paid by the employer will be refundable[16] 

The employer will also receive a credit for “qualified health care expenses” allocable to the qualified sick pay.[17]

A similar credit is available for self-employed individuals who personally have to take qualified sick leave, subject to the same limits.[18]

The paid leave rules sunset on December 31, 2020.[19]

Extended Family Leave

A much more narrow extended paid family leave is also part of the bill.  Under Act Section 3102(a), paid leave is available for up to 10 weeks for an employee who is:

unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.[20]

A public health emergency is defined as an emergency related to COVID-19 declared by a Federal, State or local authority.[21]

The first 10 days of such leave may consist of unpaid leave.[22]  However, the employee may elect to substitute any other accrued paid leave for some or all of the unpaid leave under this provision.[23]

The amount paid per day is calculated on the “two-thirds” rule that applies to the less generous paid leave situations, but with the maximum total paid out now rising to $10,000 per employee.[24]

Again, notice provisions apply to this rule as well.[25]  As well, health care providers and emergency responders can be excluded from this rule.[26]

As with paid sick leave, paid family leave is also eligible for a similar payroll tax credit[27] which is also available to the self-employed.[28]

[1] HR 6201, Enacted March 18, 2020, https://www.congress.gov/116/bills/hr6201/BILLS-116hr6201enr.pdf

[2] HR 6201, Act Section 5110(2)(b)(ii)

[3] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(a)(1)(B)

[4] HR 6201, Act Section 5102(a)

[5] HR 6201, Act Section 5102(a)

[6] HR 6201, Act Section 5110(5)(B)

[7] HR 6201, Act Section 5110(5)(A)(ii)(I)

[8] HR 6201, Act Section 5102(b)(1)

[9] HR 6201, Act Section 5102(d)

[10] HR 6201, Act Section 5102(e)

[11] HR 6201, Act Section 5103

[12] HR 6201, Act Section 5104

[13] HR 6201, Act Section 5107

[14] HR 6201, Act Section 5107

[15] HR 6201, Act Section 7001(a),(b)

[16] HR 6201, Act Section 7001(b)(4)

[17] HR 6201, Act Section 7001(d)(2)

[18] HR 6201, Act Section 7002

[19] HR 6201, Act Section 5109

[20] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(a)(2)(A)

[21] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(a)(2)(B)

[22] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(b)(1)(A)

[23] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(b)(1)(B)

[24] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(b)(2)

[25] HR 6201, Act Section 3102, amending Family and Medical Leave Act of 1993, Section 110(c)

[26] HR 6201, Act Section 3104

[27] HR 6201, Act Section 7003

[28] HR 6201, Act Section 7004