One of the biggest COVID concerns for employees and employers alike has been how to deal with the intersection of COVID and business. Everyone wants to be safe, but we also need to figure out how to do that without completely giving up on work. Extensions, expansions, and changes to Emergency Paid Sick Leave and Emergency Family Medical Leave were included in the stimulus bill of March 2021 to help this situation.
Before even getting into the topic, I think it’s helpful to lay out all the programs that I will discuss.
FFCRA – Families First Coronavirus Response Act. One of Washington’s first responses to the Coronavirus pandemic. This act included the first incarnations of Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave (EFML) that have recently been updated. This act was signed into law in March of 2020
CAA – Consolidated Appropriations Act of 2021. A budget for the 2021 fiscal year that included many provisions for COVID-related issues. Known as the second stimulus bill, as it provided $600 checks for many Americans. This act was signed into law in December of 2020
ARP – The American Rescue Plan Act of 2021. The most recent stimulus bill, and the first signed into law by President Biden. This is the bill that includes updates to EPSL and EFML. This act was signed into law in March of 2021
What Are the Updates to the Sick Pay and Family Leave Laws?
Let’s make this clear right from the top: Updates to EPSL and EFML are no longer laws, but simply guidelines that employers can follow and receive tax credits in return.
That’s the most important aspect of the updates that you need to remember, no one is forcing businesses to provide anything they can’t afford to or don’t want to. Whereas the FFCRA had enforced these as laws, those laws have expired and exist only as guidelines. That said, the guidelines have changed, so let’s get into what’s new in 2021.
What’s New With Emergency Paid Sick Leave?
There are three new qualifying reasons an employee can can call out of work:
- Getting a vaccine
- Recovering from the effects of a vaccine
- Awaiting results of a test (as requested by either employee or employer)
The second change is that the program’s end date has been pushed back to September 30, 2021.
The third major change is a “reset” of sorts for all employees that have already used their EPSL allotted under the FFCRA version of the law. Starting on April 1, 2021, the number of days used by any one employee will be reset to zero.
The number of days/hours remains the same at 10 days/80 hours. The maximum amount that can be claimed per hour is $511, but you can’t exceed what that employee is paid when calculating the credit.
There is a secondary cap level of $200 per hour for instances in which the employee has taken time off to care for another person for COVID-related reasons. That said, as soon as the employee is caring for someone with COVID, they have become someone who could potentially have COVID themselves.
There are certainly situations where they could be doing grocery shopping, or picking up medicines to drop off for a COVID patient and these types of things would fall into the $200 cap category. Watching a child because their school is closed is also a $200 cap category.
What are the Criteria to Claim Emergency Paid Sick Leave?
The initial qualifying reasons as listed by the IRS, with the new additions at the bottom:
- the employee is under a Federal, State, or local quarantine or isolation order related to COVID-19;
- the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- the employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- the employee is caring for the child of such employee if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID–19 precautions;
- the employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services.
- Getting a vaccine
- Recovering from the effects of a vaccine
- Awaiting results of a test (as requested by either employee or employer)
What’s New with Emergency Family Medical Leave?
A whole lot, actually. Whereas this was basically a program for parents to take an extended leave to watch their children while schools were shuttered, it is now applicable in any of the bulleted conditions laid out in the prior subheading.
The FFCRA version had stated that 12 weeks of EFML could be taken, but the first two weeks would be unpaid. The updated ARP has made all 12 weeks of EFML paid, as well as increasing the overall amount that employers can claim from $10,000 to 12,000. The daily amount is still capped at $200 or ⅔ of the employee’s average daily earning, whichever is lower.
In Regards to Both Programs
There is new language in the bill that warns employers against selectively providing either EFML or EPSL to their employees. You don’t have to offer either to your employees, but if you choose to provide one or both, you must be prepared to make the benefits available to all employees.
In short, you can’t use the programs to provide leave to only those employees who, by granting them leave, would provide the employer with a favorable tax situation.
There’s also language that states, in so many words, if you’re in you’re all in. Follow all the stipulations laid out by the programs or run the risk of not qualifying for the credit. Don’t try to game the system on this one! Speak with your payroll and accounting specialists to make sure you’re doing everything by the books.
The credits claimed in both programs can be used to offset the employment taxes owed by the employer, and in instances where the credit exceeds what’s owed, the IRS will issue a refund to the employer.
Why is This Necessary?
The hope behind these programs is to encourage employees to take time off when they or someone in their household are sick. If they’re not worried that they will be losing a portion of their paycheck, or painting themselves as unreliable to their employers, more people will be willing to take time off when necessary and do their part to limit the spread of COVID.
Additionally, the hope is that employers will be able to retain employees that they would otherwise have to let go or lose as they sought new jobs. It’s not beneficial to employers if they have to recruit and retrain a bunch of new employees, so anything that can be done to offset their losses will be good for the broader economic situation in the long run.
There is also the fear that people won’t take off when they’re sick unless there are guarantees.
This probably won’t come as a surprise to you, but many people just tough it out when they’re feeling sick and go to work. I would even say that there is something in the American spirit that has us tell ourselves “what doesn’t kill me will make me stronger.” I don’t know if this is honorable, or foolish, but it’s what I’ve seen and done in my own life.
With COVID, all of that has changed. It’s not possible to wake up and head into work with a cough, sore throat, or any minor discomfort that we’d normally brush off as the price to pay for being alive. It’s either nothing, or it’s something that could kill another person; that’s quite a range in possible outcomes!
In a perfect world, everyone would take caution if they were feeling unwell, or had been in contact with anyone that felt unwell. Unfortunately, the real world is more complicated than that. Many employees have been struggling financially throughout the pandemic and are constantly concerned with how they’re going to pay their bills. The idea of taking off work doesn’t seem like a possibility, even if they’re feeling sick. People have also expressed not wanting to take off work because of the fear of casting themselves as unreliable in their employers minds. It’s no secret that many businesses have closed, and many more have reduced their operations and staff in attempts to stay afloat.
As a result of people going to work when they’re sick, knowingly or unknowingly, COVID has spread more than it would have otherwise.
These programs are an attempt to make everyone whole, both physically and fiscally. If employees aren’t afraid to take a day off when they need to, and employers aren’t hit with labor costs for employees that aren’t at work, we all benefit.