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May 01, 2020

Coronavirus emergency law gives paid leave

Federal law gives payroll tax breaks to offset costs to businesses
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Recently passed federal legislation gives temporary additional paid sick leave to workers for use related to the COVID-19 public health emergency. It also extends family and medical leave for workers if they are unable to work and need to care for their child because of a school closure or unavailability of child care because of the coronavirus. Exemptions apply to certain businesses, and these provisions only last until the end of the year. Tax credits will be given to employers, intended to mitigate the impacts of the expanded leave provisions.

The plan also provides for free testing for the coronavirus during the emergency.

Gloved health care professional holding a COVID-2019 sample tube


The Families First Coronavirus Response Act became law March 18, less than a week after the House voted to approve it and the same day the Senate approved it.

Now covered employees can get up to two weeks of sick leave if they are subject to a quarantine or an isolation order related to COVID-19, have been advised by a health care provider to self-quarantine because of COVID-19, or are experiencing symptoms of COVID-19 and seeking a medical diagnosis. The same applies for those who are caring for someone who is subject to a quarantine or has been advised by a health care provider to self-quarantine, are caring for a child because of school or child care closures because of the coronavirus, or are “experiencing any other substantially similar condition” to COVID-19 as specified by the federal government, according to the bill.

Specifically, this benefit provides up to 80 hours of additional paid sick leave for full-time employees. For part-time employees, the benefit provides sick leave equal to the hours the employee works on average over a two-week period. There are daily and aggregate caps on the sick leave benefit of either $511 per day or $5,110 in the aggregate if the employee is sick or quarantined and of $200 per day or $2,000 in total if the employee is caring for someone else or has any other substantially similar condition specified by the secretary of health and human services, according to information provided by the AVMA at jav.ma/FFCRA.

Workers are now also be eligible for up to 12 weeks of family and medical leave benefits for child care in the event of school closure or if the employee’s child care provider is unavailable because of the public health emergency. The first 10 days would be unpaid, and the remainder would be paid by the employer at “not less” than two-thirds the employee’s regular pay. The employer can’t be required to pay more than $200 per day or $10,000 in total. Employees have to have been on the job at least 30 days to be eligible.

Both the sick leave changes and the family and medical leave changes come with important exceptions. The benefits only apply to companies with fewer than 500 employees. Plus, the Labor Department could exempt small businesses with fewer than 50 employees if providing leave would jeopardize their ability to stay in business. Employers can also decline to give leave to workers on the front lines of the crisis, such as certain health care providers and emergency responders. The Labor Department definitions of health care provider have not historically included veterinarians. The DOL is required to issue guidance and regulations for the application of statutory exceptions, available at dol.gov/agencies/whd/pandemic.

With regard to the family and medical leave extension, the guarantee that employees will have their position saved for them when they return from leave does not apply to a company with fewer than 25 employees under specific conditions, including if the employee takes leave under the public health emergency or the position held by the employee no longer exists because of economic conditions or changes in operating conditions caused by the public health emergency during the leave period, according to the statute. There are also specific conditions that require such an employer to make reasonable efforts to restore the employee to an equivalent position.

As far as tax credits go, companies will receive a quarterly 100% refundable credit for the qualified sick and family leave wages paid. The credits are also limited so they can’t be more than the federal payroll taxes paid on all wages paid that quarter by the employer. However, any excess will be treated as a refundable overpayment.

The law does provide for application of the tax credit for paid sick and family leave for self-employed individuals as well. The Department of Treasury Secretary Steve Mnuchin, who has been the lead for the White House in the negotiations regarding the legislation, announced the administration also will defer tax payments for individuals and small businesses until July 15.

The plan also says insurers and government programs are required to provide coverage for testing for the coronavirus, and they can’t impose deductibles or copayments, require prior authorization, or impose other requirements during the public health emergency. Also required is coverage without cost sharing for visits to the offices of health care providers, urgent care centers, and emergency rooms that result in an order for testing for the coronavirus.

In addition, the bill requires the Occupational Safety and Health Administration to issue an emergency temporary standard that requires certain employers to develop and implement a comprehensive plan to control exposure to infectious disease to protect health care workers.

Finally, the bill provides additional Medicaid funding, unemployment benefits, and food assistance.

AVMA President Dr. John Howe said in a statement that the AVMA recognizes the law is a compromise approach attempting to address the immediate needs of employees, while attempting to mitigate the impact to small businesses.

“However, many veterinary small businesses do not have the liquidity or cash flow to sustain the economic impacts of the outbreak for a long period of time,” he said. “The AVMA looks forward to working with Congress as it now turns to additional legislative action to address the economy and the economic viability of small businesses across the country.  We will continue to work closely with the small business community to ensure that veterinary practices and their employees thrive.”

A week earlier, Congress passed an $8.3 billion emergency spending bill for more medical supplies, funding for the nation’s health agencies, and other measures.

Expanding on that, the Coronavirus Aid, Relief, and Economic Security Act—the largest relief package in history—was enacted on March 27. The $2 trillion economic stabilization package provides direct support to individuals and families, suspends federal student loan repayment, and provides financial support for small businesses to maintain their workforce and operations with an opportunity for substantial loan forgiveness.

 

The Department of Labor has posted an FAQ on the Families First Coronavirus Response Act, available at jav.ma/FFRCA. In addition, the DOL has a fact sheet for employers at jav.ma/employerfactsheet and a fact sheet for employees at jav.ma/employeefactsheet.