Many furniture retailers and other businesses must provide their employees with paid sick leave and family leave under some circumstances, according to the Families First Coronavirus Response Act.
The new law, which takes effect April 1, covers businesses with fewer than 500 employees. Businesses with fewer than 50 employees can be exempted from some of the requirements if compliance would jeopardize the viability of their business, according to U.S. Department of Labor guidelines. The law expires Dec. 31.
To help employers cover the cost of this benefit, the FFCRA allowed a dollar-for-dollar refundable payroll tax credit. The Home Furnishings Association and other business groups pointed out that cash-flow problems required more immediate help. Congress heard the concerns. The Coronavirus Aid, Relief and Economic Security Act, approved March 27, allows businesses to retain payroll taxes they otherwise would pay quarterly to the Internal Revenue Service in the amount of their sick leave and family and medical leave expenditures.
Under FFCRA, covered employers are required to provide to all full-time employees:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay if the employee can’t work because he or she has COVID-19 symptoms and is seeking a medical diagnosis, or is quarantined as a result of a federal, state or local government order or the advice of a health care provider.
- Two weeks of paid sick leave at two-thirds his or her regular rate of pay if he or she must care for someone else who is quarantined or for a child whose school or child-care provider is closed or unavailable because of COVID-19.
The Department of Labor offers this additional guidance:
Who qualifies for paid sick leave?
An employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
- Is subject to a federal, state or local quarantine or isolation order related to COVID-19.
- Has been advised by a health care provider to self-quarantine related to COVID-19.
- Is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
- Is caring for an individual subject to an order described in #1 or self-quarantine as described in #2.
- Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.
- Or is experiencing any other substantially similar condition specified by the secretary of Health and Human Services, in consultation with the secretaries of Labor and Treasury.
Part-time employees are entitled to paid sick leave for the number of hours worked, on average, during a two-week period.
When is paid family leave required?
The covered employers must provide up to an additional 10 weeks or paid family and medical leave at two-thirds of the employee’s regular rate of pay, if the employee has been employed for at least 30 days but must care for a child whose school or child-care provider is closed or unavailable.
The Department of Labor offers this further guidance:
Duration of leave:
For reasons #1-4 and 6: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.
For reason #5: A full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
Calculation of pay:
For leave reasons #1, 2 or 3: Employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a two-week period).
For leave reasons #4 or 6: Employees taking leave shall be paid at two-thirds their regular rate or two-thirds the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a two-week period).
For leave reason #5: Employees taking leave shall be paid at two-thirds their regular rate or two-thirds the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period — two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave).
How do businesses pay for this?
Tax credits: The Families First Coronavirus Response Act allowed covered employers to recover their casts through dollar-for-dollar reimbursements in the form of tax credits for all qualifying wages paid under this act. Because that would not provide relief quickly enough, however, the CARES Act enacted March 27 allows businesses to retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form (which is still in development).
Employer notice: Each covered employer must post in a conspicuous place on its premises a notice of requirements under this act.
Prohibitions: Employers may not discharge, discipline, or otherwise discriminate against any employee who takes paid sick leave under this act and files a complaint or institutes a proceeding under or related to the act.
Businesses with fewer than 50 employees should document why compliance would jeopardize the viability of their business but should not send that information to the Department of Labor pending the release of further regulations.