Tag Archives: Paid Sick Leave

COVID-19 Paid Leave Laws Affect Small Employers

Congress has passed and President Trump has signed a new law that requires small employers to provide paid leave to employees for two weeks of sick leave and as many as 10 weeks of leave to take care of kids whose schools have closed.

This Families First Coronavirus Response Act (“FFCRA”) goes into effect on April 1, 2020. It requires all employers with less than 500 employees, including very small employers and nonprofits, to pay employees whose absences are caused by the COVID-19 epidemic. The DOL has created a fact sheet and an FAQ to help employers understand these laws better.

Here are a few highlights of the FFCRA law:

Paid sick leave for two weeks is available to all full-time, part-time, temporary, seasonal, and other kind of employee if the employee has to miss work for one of the following reasons:

  1. Employee is subject to government quarantine; or
  2. Employee has been advised by healthcare provider to self-quarantine; or
  3. Employee is experiencing symptoms and seeking a diagnosis; or
  4. Employee is caring for an individual subject to quarantine or self-quarantine as advised by healthcare provider; or
  5. Employee is caring for children under 18 because schools or “caregivers” are unavailable; or
  6. Employee is experiencing any other condition that is substantially similar to COVID-19, as specified in HHS regulations to come.

Paid Family and Medical Leave is available for up to 10 more weeks (after using up 2 weeks of unpaid time or 2 weeks of Emergency Paid Sick Leave as spelled out above) to all full-time, part-time, temporary, seasonal or other kind of employee if the employee has worked for the employer for at least 30 days and then has to miss work for this one reason:

  • The employee is unavailable to work or telework because the employee is caring for a child under the age of 18 because that child’s school or childcare facility is closed because of the coronavirus.

The paid sick leave has to be paid at the employees’ regular hourly rate (including commissions, tips and piece rates, but not overtime rates) if the employee is absent for reasons #1-3, above. The paid sick leave and the paid family and medical leave have to be paid at 2/3 of the employee’s regular hourly rate if the employee is absent for reasons #4-6, above. There are also daily and total caps on the amounts you have to pay the employees for these absences.

Employers with less than 50 employees are subject to these FFCRA paid leave laws, even though you have never before been required to comply with Family and Medical Leave Act or any paid leave law. There is a provision that the Secretary of Labor can exempt a business when giving the leave would “jeopardize the vitality of the business.” In other words, if granting this paid leave could make your company go out of business, and you can prove that in your financials, you might not have to provide this paid leave. You don’t have to get the Secretary of Labor’s permission for this exemption by filing anything, but you will have to be able to document the correctness of your decision after the fact.

This law is not retroactive, meaning you don’t have to pay for leave taken before April 1, 2020, if it wasn’t your company policy to pay employee absences.

However, you also can’t make employees apply your paid time off policy before using this emergency paid sick leave or family leave. It is the employee’s choice alone on how to coordinate their PTO and these paid leave laws.

The good news for employers is that the employer gets a tax credit on payroll taxes for 100% of these amounts paid to employees for emergency sick leave and paid Family and Medical Leave. On the next Form 941 that will be due by July 31, 2020, the IRS will add a line for the employer to take the tax credit. If the amount you paid out to your employees for these paid leave laws exceeds the payroll taxes that you owe, then you are supposed to be able to get a refund from the IRS within 2 weeks after filing your Form 941.

We are still waiting for the Secretary of Labor to provide more guidance through regulations. He should also be providing us with notices, posters and other explanations to give to your employees.

There are also other employment laws that a company has to consider in this crisis, which are summarized here.

Paid Sick Leave Required in Some Texas Cities

Do you as an employer provide your employees in Texas at least six to eight days of paid sick leave every year? If you have employees who work in Dallas or San Antonio, you are about to be required to do so. You should be immediately adding a paid sick leave policy that complies with municipal ordinances that take effect August 1, 2019 in those two cities.

If you have an employee who works at least 80 hours per year in the city limits of Dallas or San Antonio, the new ordinances require you as the employer (if you employ five or more people anywhere) to provide that employee with one hour of paid sick leave for every 30 hours that the employee works within those city limits. It doesn’t matter if your business isn’t based in one of those cities, just whether your employee performs work there.

Of course, offering this paid sick leave only to your employees who work in San Antonio and Dallas could create workforce animosity and claims of discrimination among your other employees, so employers making changes to their policies need to carefully consider whether a company-wide sick leave policy revision is the smartest move at this point.

Here are the general details of the two municipal paid sick leave ordinances in Dallas and San Antonio. You should ask your employment lawyer to help you include the specifics in your revised written sick leave policy if you have Dallas and San Antonio workers:

  • If you have 15 or more employees, then you must allow your Dallas and San Antonio employees to accrue at least 64 hours of sick leave per year. For smaller employers (5-14 employees employed anywhere), the total amount of paid sick leave required per year is 48 hours.
  • The paid sick leave laws apply to full and part-time employees, so those of you who don’t provide benefits to part-time employees in Dallas and San Antonio will need to revise your policies.
  • These ordinances say that employees can use their paid sick leave as soon as it is accrued. So if you require an initial probationary or orientation period in which paid time off can’t be used, you’ll have to rethink your policy in that regard.
  • This paid sick leave can be used for more than employee’s own mental or physical health problems. The employee can take the paid time off for a family member’s illnesses, any family member’s victimization (such as domestic violence or sexual assault), and for doctor’s appointments for the employee or a family member. “Family member” is defined broadly and includes blood relatives as well as anyone who has such a close association with the employee to be considered family (such as a live-in partner).
  • You have to allow carry over of accrued but unused paid sick leave to the next year if you use the accrual method. However, if you provide all of the paid sick leave the employee will be entitled to at the beginning of the year, then you don’t have to allow carry over (this is also much easier to administer than the accrual method).
  • You can’t retaliate against an employee for using the sick leave he/she is entitled to.
  • Enforcement won’t go into full effect on these ordinances until April 2020, but you should be amending your policies now to comply with the August 1, 2019 effective date.

These ordinances have not been without controversy. The business lobby in Texas is fighting hard against these paid sick leave laws. A similar one in Austin is currently enjoined by a court battle, headed to the Texas Supreme Court, and won’t be taking effect as scheduled. But the court battle will take significant time and the 2019 Texas Legislative session ended last month with the lawmakers failing to pass any bill to standardize these municipal ordinances statewide or prohibit cities from passing them, so there is little chance that Dallas and San Antonio’s laws won’t go into effect in August, even if they are challenged in court later.

Even if you don’t have Dallas and San Antonio employees, I think all Texas employers must consider offering paid sick leave right now. Not only are states and cities all over the country requiring this, but employees are coming to expect this benefit.

Plus such a change can benefit an employer in a time of historically low unemployment in this state. It seems that almost every employer that I represent tells me that he/she can’t hire and keep good help. So shouldn’t you be offering some kind of paid sick leave to improve your hiring and retention? Maybe it would be helpful to adopt a policy that would comply with these city ordinances as part of a more comprehensive review and beefing up of your benefits to attract and retain high-quality employees.

Even Walmart (long regarded as one of America’s worst employers) recognized in 2019 the value of providing its hourly employees with 48 hours of paid sick leave per year in addition to regular paid time off. In fact, Walmart’s new company-wide paid sick leave policy looks surprisingly similar to the ordinances just passed by Dallas and San Antonio. Walmart wasn’t being altruistic, of course. It just made the move to standardize its policies to comply with a nationwide patchwork of new state and municipal laws requiring employers provide paid sick leave.