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.