This section requires employers with fewer than 500 employees to provide employees two weeks of paid sick leave, paid at the employee’s regular rate for their own sickness or care; or paid at two-thirds the employee’s regular rate to care for a family member or to care for a child whose school or place of care has closed due to the coronavirus. All employees, regardless of their tenure with the company, are entitled to this time.
Full-time employees are entitled to 2 weeks (80 hours) and part-time employees are entitled to the typical number of hours that they work in a typical two-week period. If the employee is using this time for their own illness, the benefit is limited to $511 per day, and $5,110 annually. If the employee is using this time to care for a family member, the benefit is limited to $200 per day, and $2,000 annually.
Employers with fewer than 500 employees must provide employees who’ve been with the organization for 30 days or more the right take up to 12 weeks of job-protected leave under the Family and Medical Leave Act. The first two weeks may be unpaid or paid with Emergency Paid Sick Leave as detailed above, and the remaining 10 weeks are paid through Emergency FMLA, at a rate of two-thirds the employee’s regular rate of pay. This time may only be used if an employee can’t work, or telework, because they need to care for a child whose school or place of care is closed due to COVID-19. This benefit is limited to $200 per day, which a cap of $10,000 dollars total.
Employers are entitled to a refundable tax credit equal to 100 percent of qualified paid sick leave wages paid by an employer for each calendar quarter, applied against the employer’s portion of social security taxes. This credit only applies to Emergency Paid Sick Leave wages. The credit amount varies depending on whether the sick leave is taken for the employee’s own illness, or to care for a family member:
Further, employers are entitled to a refundable tax credit equal to 100 percent of qualified family leave wages paid by an employer for each calendar quarter, applied against the employer portion of Social Security taxes. Qualified family leave wages are wages required to be paid by the Emergency Family and Medical Leave Expansion Act. The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters.
For both the paid sick leave and paid family leave credits, if the credit exceeds the employer’s total liability of Social Security Tax, the excess credit is refundable to the employer, most likely as a line item on form 941. The section applies only to wages paid with respect to the period beginning on a date selected by the Secretary of the Treasury and ending on December 31, 2020. Employers may elect not to apply the credit.
The bill grants the Secretary of Labor the authority to exempt businesses with fewer than 50 employees if the application of the requirements may jeopardize the business.
Paylocity is monitoring this and all related legislation closely and will continue to provide updates as new laws pass. We are working closely with our partners throughout the industry to ensure we will be able to support these requirements for our clients.