The CARES Act created a new federally mandated paid sick leave for employees who think they have COVID-19 or have to care for someone who is potentially affected by it. Small businesses, those with under 500 employees, are the target of the Coronavirus leave act. It is important for business owners and HR departments to be aware of this new leave and its requirements. This will help predict costs and make sure they follow the federal mandates carefully.
What the Coronavirus leave act says
The act applies to public and private employers with less than 500 employees. If your business has less than 50 employees and providing paid leave would be a severe financial burden, you may ask for an exemption to some of the leave requirements.
Covered employees include both part- and full-time workers, as well as seasonal workers. Only workers employed for more than 30 calendar days are eligible for the additional leave shown below. The act lasts through December 31, 2020.
Here is a breakdown of the paid leave you are required to provide:
| Length of paid leave | Rate of pay | Cap on hours | Condition |
| Two weeks | Regular wages | 80 | Quarantined or experiencing symptoms and seeking diagnosis |
| Two weeks | Two-thirds (2/3) wages | 80 | Caring for someone in quarantine or caring for child(ren) if school or day care is closed due to COVID-19 |
| Additional 10 weeks | Two-thirds (2/3) wages | None | If employee has been employed for at least 30 calendar days, and is caring for child(ren) if school or day care is closed due to COVID-19 |
The leave act took effect on April 1, 2020, with a reprieve in enforcement until April 17, 2020. After that time, subject employers not providing paid leave can expect enforcement to include payment of wages due. An electrical company in Tucson was recently ordered to pay $1,600 to a worker who was denied paid sick leave after showing Coronavirus symptoms.
If an employee does not receive paid leave from their employer and they fit the guidelines for receiving it, the employee can submit a complaint to the Department of Labor. Employers are prohibited from discharging, disciplining, or discriminating against an employee that takes paid sick leave and files such a complaint.
Employers can recoup the costs of the paid leave through dollar-for-dollar tax credits. In order to claim the credits, the employer will need to keep certain records to substantiate both the need for the leave and the costs.
Records to keep
Before taking paid leave under this act, the employee needs to request it. In the request the following information should be collected:
- Name of employee
- Dates of leave requested
- Reason for leave
- A statement from the employee giving the reason they are unable to work
- Name of the entity that issued the quarantine or isolation order or the health care provider they sought treatment from
If the request is due to lack of childcare or schools closing, additional information is required:
- Name of child(ren)
- Name of school, care center, or childcare provider
- Statement from employee that no other suitable person is available
An employer doesn’t have to provide leave if the employee does not provide the required information.
In addition, businesses will need to provide back-up documentation showing how they arrived at the amount to pay each employee during their leave. This will include payroll reports from before the pandemic, and records of amounts paid during leave.
Employers are also required to maintain contributions to the employee’s health insurance plan to keep the plan in effect. If the employee normally makes contributions to their insurance, those contributions will continue through the leave period. Keep records of these costs as well.
This paid leave doesn’t have to be taken all at one time. It can be used intermittently in combination with work and telework. For example, if an employee can only work Monday, Wednesday, and Friday due to childcare issues, they can apply for this leave and receive two-thirds of their wages for Tuesday and Thursday of each week.
Small businesses need to be aware of the leave requirements, so they don’t end up having to pay more in the long run. It is important to remember that employees do not actually have to be diagnosed with Coronavirus to qualify for paid leave. If an employee has symptoms and believes they could have Coronavirus, and is seeking medical treatment, they qualify for paid sick leave under the CARES Act while they wait for a diagnosis.
For more information on the CARES Act and the Families First Coronavirus Response Act, see the sources below.
https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave#_ftn1
https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
