Protecting Your Employees: The Small Business Owner’s Guide to COVID-19 Paid Sick Leave
Quality Verified
Updated: October 25, 2023
Quality Verified
Updated: October 25, 2023
Advertising & Editorial Disclosure
Small businesses are a mainstay of the U.S. economy. According to the Small Business Administration (SBA), there are 30.2 million small businesses in the U.S. The coronavirus pandemic has left small businesses, both in the U.S. and around the world, reeling from the economic impact of adhering to social distancing guidelines and state-mandated stay-at-home orders. Congress has passed legislation to attempt to help both workers and small businesses, in the form of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid Relief and Economic Security (CARES) Act.
Help for Small Businesses and the People They Employ
Families First Coronavirus Response Act
Emergency Paid Sick Leave Act
This is one part of the FFCRA, and it generally operates in tandem with the Emergency Family and Medical Leave Act. Employers with less than 500 employees must provide full-time employees with 10 days or 80 hours of paid sick leave. Employers must also provide all part-time employees with paid sick leave equal to the average number of hours worked over a typical two-week period. Both are subject to federal eligibility requirements.
Paid Sick Leave
Employer Requirements and Qualifications
Public agencies that employ one or more people and private sector employers with 500 employees or fewer, both part-time and full-time, are required to provide some measure of sick leave as designated by the FFCRA.
Employer Responsibilities
Qualifying employers are required to pay employees their regular wage for two workweeks (80 hours for full-time employees and the typical number of hours over two weeks for part-time employees), capped at a maximum daily rate of $511, and $5,110 in the aggregate per person.
You will need to do this if an employee is unable to work due to:
- Being subjected to a federal, state or local quarantine/isolation order.
- Being advised by a health care provider to self-quarantine (due to concerns related to COVID-19).
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
Employers are not allowed to make employees use other leave, for example, accrued time off, first before extending this benefit to them.
Exemptions
Small businesses with fewer than 50 employees may qualify for an exemption if providing this leave would jeopardize the viability of the business to continue operating.
Employers whose employees are health care providers or emergency responders are also exempt from providing qualified sick leave.
To find out if you qualify, visit the Department of Labor’s FFCRA page.
Paid Family Leave
Employer Requirements and Qualifications
Public agencies that employ one or more people and private sector employers with 500 employees or fewer, both part-time and full-time.
Employer Responsibilities
Qualifying employers are required to pay employees two-thirds of their regular wage, for two workweeks (80 hours for full-time employees and the typical number of hours over two weeks for part-time employees), at a maximum daily rate of $200 per day and $2,000 in the aggregate per person.
You will need to do this if an employee is unable to work due to:
- Caring for an individual who is subject to an order or self-quarantine.
- Caring for a son or daughter if school or child care is closed or unavailable.
- Experiencing any other substantially similar condition specified by the US Department of Health and Human Services.
Exemptions
Small businesses with fewer than 50 employees may qualify for an exemption if providing this leave would jeopardize the viability of the business to continue operating.
Employers whose employees are health care providers or emergency responders are also exempt from providing qualified family leave.
To find out if you qualify, visit the Department of Labor’s FFCRA page.
Emergency Family and Medical Leave Expansion Act
This expansion of the Family and Medical Leave Act (FMLA) depends on where you’re based and what paid leave benefits were in place before the coronavirus pandemic began. It provides for 12 weeks of paid leave to employees who need to care for a child during the coronavirus pandemic. “The most confusing thing is how the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act work in conjunction with each other,” says Moonsees. “The best thing to remember is Emergency Family and Medical Leave is only available for the reason of an employee needing to take care of their child because their school or daycare is closed due to a public health emergency, which in this case is COVID-19. And that’s only paid at two-thirds of their pay.”
FMLA Expansion
Employer Requirements and Qualifications
- The FMLA expansion applies to private-sector employers with fewer than 500 employees.
- Public employers, regardless of size, are also included.
Employer Responsibilities
Qualifying employers are required to provide 12 weeks of job-protected leave to any employee who has been employed for at least 30 days. The first 10 days or two weeks is unpaid, but an employee is able to use emergency paid sick leave or any accrued paid leave to cover this 10-day period.
This leave is to be provided if the employee is unable to work (or telework) because of the need for leave to care for a son or daughter under 18 years of age, due to:
- the school or place of care being closed, or
- the child care provider of an employee’s son or daughter being unavailable due to a public health emergency.
In this case, the public health emergency refers to the COVID-19 emergency declared by federal, state or local authority.
Employer Tax Credit
Employer Requirements and Qualifications
Public agencies that employ one or more people and private sector employers with 500 employees or fewer, both part-time and full-time, and are required under the FFCRA to pay sick and family leave wages.
Employer Responsibilities
A qualifying employer needs to receive a written request for the leave from the employee. “We recommend that employers get a self-certification from their employees, depending on what type of leave it is that is being requested, that says ‘I’m telling the truth, this is the reason I need to leave.’ That way, anyone found to be untruthful down the road will be subject to discipline under the employer’s policies,” says Moonsees. “There is guidance from the IRS and the Department of Labor about how to document the reason for leave. The IRS came out with fairly specific guidelines late last week about the types of documentation that an employer needs to get the tax credit. It is important to follow those.”
Exemptions
The FFCRA permits businesses with fewer than 50 employees to potentially claim an exemption from providing paid sick leave and expanded family and medical leave if providing these qualified leave wages would jeopardize the viability of their businesses to operate. Any employer who claims the exemption is not entitled to tax credits for any qualified leave wages that they are exempt from providing. This also applies to employers whose employees are health care providers or emergency responders, who may be exempt from providing this leave benefit too.
Paid Leave Steps to Take for Your Business and Employees
Other Legislation and Assistance for Small Business
Frequently Asked Questions About Employees and COVID-19
Along with keeping businesses afloat and dealing with their own issues during this time, business owners are faced with synthesizing a lot of information regarding their employees. Many have similar questions.
Are There Paid Time Off Requirements for Business Owners?
Yes, there are. In the past, business owners haven’t necessarily had to provide paid leave under the law. This has customarily varied from state to state, but now, under the FFCRA, a business owner with 500 employees or fewer is required to provide two categories of leave:
- Paid Sick Leave (up to 10 days): Employees are eligible for up to two weeks, or 10 days, of paid sick leave, capped at 80 hours for full-time employees.
- Expanded Family and Medical Leave (up to 10 weeks): After taking two weeks of paid sick leave, employees who have been employed for at least 30 days may be eligible for up to an additional 10 weeks of partially paid expanded family and medical leave if the employee is caring for a son or daughter because of school or daycare closures due to COVID-19.
This law is effective from April 1, 2020, until it expires on December 31, 2020.
What Should I Do If One of My Employees Has COVID-19?
Because of the severity of the pandemic, employers should take steps outlined by the CDC to ensure employees with COVID-19 symptoms are kept separate from other employees, to minimize exposure to the virus or to be sent home.
Under the Family and Medical Leave Act, employers were required to get documentation from the health care provider as to why an employee needed to take the leave. Now, Moonsees says, health care workers are too burdened with taking care of COVID-19 patients to provide this information.
The CDC has strongly encouraged employers not to require their employees who are sick or who need leave due to COVID-19 to provide a doctor’s note. “We have recommended that employers get a self-certification from their employees, depending on what type of leave it is, that says ‘I’m telling the truth, this is the reason I need to leave.’ That way, if they’re found to be untruthful down the road, they will be subject to discipline under the employer’s policies,” says Moonsees.
Moonsees says that under the law, these paid sick leave benefits are in addition to other paid leave benefits that were already available to the employee. “If you’re in a state where you’re required to provide paid sick leave on a state level, then that does not negate or subtract from the employee’s eligibility for that leave under the federal law,” she says. “And similarly, an employer cannot require the employee to use other sick leave before they use their FFCRA benefits.”
For employers who have employees in multiple states, they may not be able to use a consistent form for all and may have to modify their forms slightly for their specific jurisdiction.
What If an Employee Needs to Care for a Family Member Who Has Coronavirus?
In most cases, the employer is required to provide up to 12 weeks of paid leave to the employee under the Family and Medical Leave Act, provided the employee and family member meet the eligibility requirements. Employers must provide pay at least two-thirds of the employee’s salary during such a leave period. The first 10 days of this leave may be unpaid, but employees can elect to substitute accrued paid leave during this time, including up to two weeks of paid sick leave from the Emergency Paid Sick Leave Act.
A family member, for purposes of emergency paid sick leave, includes:
- An employee’s parent, spouse, and son or daughter (with no stated age limitation).
- Pregnant women.
- Senior citizens.
- Individuals with disabilities or access or functional needs who are also either the employee’s sibling, next of kin, grandparent or grandchild, or for whom the employee is their next of kin.
What Should I Do If an Employee Needs Time Off to Care for a Child?
The FFCRA allows employees time off to take care of a child under the age of 18 who is at home due to school or daycare closure because of the coronavirus pandemic.
The Emergency Family Medical and Leave Act, included in the FFCRA, gives expanded coverage, where employees are entitled to 10 additional weeks of family and medical leave. The first 10 days of the expanded family leave coverage is unpaid, but employees can substitute the time with their own accrued paid sick leave or the emergency paid sick leave under the FFCRA.
“The best thing to remember is that Emergency Family and Medical Leave is only available for the reason of needing to take care of your child because their school or daycare is closed due to a public health emergency. And that’s only paid at two-thirds pay,” says Moonsees.
“There’s also a benefit under the Emergency Paid Sick Leave Act for that same reason, and you can get up to 80 hours at two-thirds pay to take care of your son or daughter. It’s 12 weeks of job-protected leave, in total,” says Moonsees. For part-time employees who have an irregular schedule, that would be calculated on the average hours the employee worked over the past six months.
Expert Insight on Paid Sick Leave for Small Businesses
Samantha Monsees is an attorney in the Kansas City office of Fisher Phillips. She focuses her practice on defending employers across several industries, including automotive, retail, construction and manufacturing. She is a member of the firm’s COVID-19 Taskforce, a cross-disciplinary team of attorneys dedicated to advising employers on the many workplace law aspects of the global coronavirus pandemic. Additionally, Samantha is a member of the firm’s SBA Loan Team, dedicated to advising employers on the inner workings of the complex CARES Act loan process during the COVID-19 coronavirus pandemic.
Interview with Samantha Moonsees, Attorney
Resources for Small Businesses Impacted by Coronavirus
These resources can help business owners navigate the complicated coronavirus landscape.
CDC: The Centers for Disease Control has published interim guidance for businesses and employers, and also provides regular updates for employers to stay informed.
Department of Labor: The department has created a list of FAQs, covering the details of each part of the FFCRA, and what the paid leave qualifications are.
Fisher Phillips: This law firm, like many others, has created a dedicated COVID-19 task force, with a comprehensive list of questions-and-answers for employers around the coronavirus pandemic.
IRS: The IRS is offering help for businesses affected by the coronavirus pandemic, particularly with regards to guidelines employers should follow to comply with the regulations and receive the tax credits for offering paid leave.
SBA: The Small Business Administration is offering guidance and loan resources for employers to navigate through the coronavirus relief options.
About Nadia Neophytou
sources
- CDC. "COVID-19." Accessed October 25, 2023.
- Department of Labor. "Families First Coronavirus Response Act: Questions and Answers.." Accessed April 9, 2020.
- Fisher Phillips. "Congress Finalizes COVID-19 Coronavirus Response Act: Prepare To Provide Paid Sick Leave And FMLA.." Accessed April 9, 2020.
- SBA. "COVID-19 Relief Options." Accessed October 21, 2023.