Full-time employees are entitled to 10 days of Emergency Paid Sick Leave and part-time employees are entitled to the typical number of hours that they work in a typical two-week period, paid at two-thirds of the employee’s regular rate. The sick leave amount is calculated based on the employee’s “required compensation” (i.e., the largest of (i) regular rate of pay, (ii) federal minimum wage, or (iii) local minimum wage) multiplied by the number of hours normally scheduled to work, but capped at (i) $511 per day ($5,110 in total per affected employee) for those described above in items 1-3; and (ii) $200 per day ($2,000 in total per affected employee) for other employees.
- Employers with less than 500 employees and government employers must provide up to 12 weeks of job-protected Emergency Family and Medical Leave in situations where the employee cannot work (or telework) for a “qualifying need related to a public health emergency.” The first 10 days of this leave can consist of unpaid leave. A “qualifying need relates to a public health emergency” is solely limited to caring for a son or daughter under age 18 if their school or place of care has been closed or the child care provider is unavailable due to a public health emergency. A public health emergency means an emergency with respect to COVID–19 declared by a Federal, State, or local authority. Emergency Family and Medical Leave is calculated for an employee at an amount not less than 2/3 of the employee’s regular rate of pay (using the Fair Labor Standards Act of 1938) multiplied by the number of hours the employee would normally be scheduled to work. This required paid leave cannot exceed $200 per day and $10,000 in total for an employee.
- The law funds the Emergency Paid Sick Leave and Emergency Family and Medical Leave for employers (including tax-exempt employers) through a refundable credit against payroll taxes.
- Self-employed taxpayers can receive an Emergency Paid Sick Leave benefit for their own qualifying illness through a refundable credit (subject to limitations) against income taxes for periods during which work cannot be done. Their business enterprise must be a qualifying business (i.e. must employ less than 500 individuals) to receive the benefit for their personal qualifying time off.
- Employers with more than 499 employees are NOT required to pay Emergency Paid Sick Leave or Emergency Family and Medical Leave and are NOT provided with the refundable credit against payroll taxes.
Amounts under Paid Sick Leave and Emergency Family and Medical Leave are also NOT subject to the employer’s FICA tax The employee’s portion of FICA tax still applies.
We encourage you to reach out to your tax and business advisor during this rapidly changing time for more information as this fluid situation evolves.
LBMC tax tips are provided as an informational and educational service for clients and friends of the firm. The communication is high-level and should not be considered as legal or tax advice to take any specific action. Individuals should consult with their personal tax or legal advisors before making any tax or legal-related decisions. In addition, the information and data presented are based on sources believed to be reliable, but we do not guarantee their accuracy or completeness. The information is current as of the date indicated and is subject to change without notice.
Probably the need would be to setup two earnings types for sick leave. One would be paid at the regular rate and would be used if the employee was sick with Covid-19. The other would be used if a family member is sick and would be paid at 67% of regular pay. They have to track these separately because if they pay these out, they can get reimbursed for the Covid-19 related sick pay by the government.
There is apparently a limit to how much of that special Covid-19 sick leave the employer is required to pay though. I browsed through that GP document you linked to, and they are just suggesting that the employer track the amount manually. As an example, if the employer can be reimbursed for 80 hours of sick leave for an employee who is sick with Covid-19, the employer can enter timesheets for that sick time, and when they have entered 80 hours, then they would know they can’t enter more hours for that specific sick leave. They actually could but-- they wouldn’t be reimbursed for it.
There is also an idea to setup a "benefit" for the sick leave. The only advantage we see to doing that is when they are entering time and there is no more of the benefit available, they will get a warning message. It won’t stop them from entering time, but as an example, if they setup a benefit for 80 hours of this sick leave and the entire 80 hours was used, and then they entered more time, they would get a warning that the employee doesn’t have enough benefit hours to cover the time entered. That was apparently important to some sites, to have the system track the remaining hours and deliver a warning. I’m not sure we would necessarily recommend that for all sites that ask about this, but it could be an option.
HOWEVER, The only problem with this would be the earnings type needed to setup at a pay rate of .67%. When you setup an earnings as a "benefit usage", the rate multiplier cannot be changed. This is by design. So that pretty much says...setup an earnings type for this issue and track it manually on a spreadsheet.