A bill passed by the US House of Representatives on March 13 to address the coronavirus (COVID-19) public health emergency imposes a mandate on all employers with fewer than 500 employees, and on all federal and state employers, to provide 10 days of paid sick time to employees who need the leave for reasons connected to the public health emergency. Private sector employers will receive a tax credit equal to 100% of the money they spend on paid sick time wages. 

The bill is expected to be passed shortly by the Senate and signed by the president. Although employers with 500 or more employees are exempt from the mandate in this bill, it is useful for all employers to understand the approach taken by Congress since additional legislation may still be introduced to cover larger employers.

When the Mandate Starts

All employers with fewer than 500 employees, and all federal and state employers, must offer paid sick time to their employees within 15 days after enactment of the law.

Employees Who Are Eligible

All employees, full-time and part-time, are eligible for the sick leave. An employee is eligible regardless of when the employee started working for the employer.

Number of Hours of Paid Sick Time

Full-time employees must be provided with 80 hours (10 days) of paid sick leave. Part-time workers are entitled to the number of hours they work on average over a two-week period. (There are various complicated rules for calculating hours for part-time workers under different circumstances. Within 15 days of enactment of the law, the US Secretary of Labor is required to issue guidelines to assist with such calculations.)

The 80 hours (10 days) of paid sick time, or the time provided to a part-time worker, must be provided in addition to whatever paid sick time or PTO the employer was providing its employees prior to the enactment of the law.

Employees are not required to spend down any sick leave or PTO to which they otherwise are entitled. Indeed, employers are explicitly prohibited from requiring an employee to first use any accrued sick leave or any other paid time off offered by the employer. In addition, employers are prohibited from changing the amount of paid leave they were offering prior to the enactment of the law.

The additional paid sick time does not carry over to the following year. Employers are also not required to reimburse employees for paid sick time not used by the employee when the employee leaves the job.

Amount of Wage Replacement

If an employee needs sick leave because the employee is ill with COVID-19, is required to self-isolate, or needs a diagnosis or preventative care for COVID-19, the employer must pay the employee’s full regular wage, the federal minimum wage, or if applicable, the state or local minimum wage (whichever is greatest). If the employee needs sick leave to care for a family member under the circumstances provided in the bill, the employer must pay the employee two-thirds of those wages. 

Uses of the Paid Sick Leave

The paid sick leave may be used for the following purposes:

• An employee needs to self-isolate because the employee is diagnosed with COVID-19.
• An employee needs to obtain a medical diagnosis or care because the employee is experiencing the symptoms of COVID-19.
• An employee is complying with the recommendation or order of a healthcare provider (or the recommendation or order of a public health official) to self-isolate because the employee’s presence on the job would jeopardize the health of others, either because the employee has been exposed to COVID-19 or because the employee is exhibiting symptoms.
• The employee needs to care for, or assist, a family member of the employee who is self-isolating because the family member has been diagnosed with COVID-19, or is experiencing symptoms and needs medical diagnosis or care, or because a healthcare provider (or a public health official) has determined that the presence of the family member in the community would jeopardize the health of others in the community, either because the family member has been exposed to COVID-19 or because the employee is exhibiting symptoms.
• The employee needs to care for a child if the child’s school or child care location has been closed, or if the child care provider of the child is unavailable due to COVID-19.

Definition of Family Members

A family member is an employee’s parent, spouse, child, and an individual with whom the employee is in a “committed relationship.” 

An employee’s parent is a biological, foster, or adoptive parent, a stepparent, a parent-in-law, a parent of a domestic partner, or a legal guardian or other person who stood in loco parentis to an employee when the employee was a child.

An employee’s child is a biological, foster, or adopted child, a stepchild, a child of a domestic partner, a legal ward, or a child of a person standing in loco parentis under 18 years old.

A “committed relationship” is one between two adults, in which each individual “is the other individual’s sole domestic partner and both individuals share responsibility for a significant measure of each other’s common welfare.” This includes individuals who are in a domestic partnership or a civil union recognized by a state. 

A family member includes certain siblings, next of kin of either the employee or the family member (“next of kin” means the nearest blood relative of the individual), grandparents and grandchildren. These individuals are considered family members if the person is a pregnant woman, a senior citizen (not defined in the bill, but presumably 65 years old or older), an individual with a disability, or an individual with “access or functional needs” (not defined in the bill).

Tax Credit

The bill authorizes a refundable tax credit for qualified sick leave wages that can be applied against the 6.2% Old-Age, Survivors, and Disability Insurance, or (“Social Security”) taxes that the employer/self-employed taxpayer pays on wages up to $137,700.

• The credit is limited to $200/day if provided for family medical leave reasons, or $511/day if provided for qualifying sick leave. In either case, the credit is limited to 10 days of leave per qualifying employee. 
• Because of the effective date of the provisions, i.e., 15 days after action by the Secretary, the credit is only available for Q2 through Q4 2020. Enactment will take too long for the credit to have any application in Q1.
• To the extent that a covered employer elects to receive the credit, the credit amount must be taken into the employer’s gross income, which effectively eliminates any potential double benefit because the employer will have deducted the sick leave wages it paid.
• The qualified sick leave wages paid are not “wages” for the employer-portion of the Social Security tax. The legislation has no effect on the employee-portion of the Social Security tax, nor does it have any effect on employer or employee-portion of the Medicare tax. 

Notices and Procedures

An employer must post a notice for employees about the requirements of the law.

After the first workday that an employee receives paid sick time, the employer may require the employee to follow “reasonable notice” procedures in order to continue receiving the paid sick time. “Reasonable notice” is not defined in the bill.

The employer may not require that the employee find or search for a replacement to cover the hours the employee will be on sick leave.

Multiemployer Collective Bargaining Agreements

For employers who participate in multiemployer collective bargaining agreements (CBAs), the employer can fulfill the bill’s requirements by making contributions to the multiemployer fund or plan based on the hours of paid sick time each of its employees is entitled to under the bill. But the fund must allow employees to secure pay from the fund or plan for the sick leave.

Nondiscrimination

The bill prohibits an employer from discriminating against an employee for using paid sick leave, filing a complaint, or testifying in an action under the law.

Enforcement

An employer who fails to provide required sick leave, or who engages in discrimination, including retaliation, faces enforcement actions under the Fair Labor Standards Act (FLSA). An enforcement action can be brought by a single employee or as a collective action, or by the US Secretary of Labor. Penalties would include payment of the unpaid wages plus an equal amount as liquidated damages, equitable relief (such as reinstatement), injunctive relief, and even criminal prosecution for willful violations. Attorney fees and costs can also be awarded.

Non-Preemption

Nothing in the law diminishes the rights that employees have under federal, state, or local laws; a collective bargaining agreement; or an employer’s existing policy.

Guidance from the Secretary of Labor

Within seven days of enactment of the law, the Secretary of Labor must provide a model notice that employers can post explaining the requirements of the law.

Within 15 days of enactment of the law, the Secretary of Labor must issue guidelines on how to calculate the wages of part-time workers under different circumstances and a model notice for the employer to post.

There is no other obligation on the Secretary of Labor to issue regulations or guidance under the law.