In response to growing COVID-19 concerns, Congress recently passed the Families First Coronavirus Response Act, making temporary changes to employment laws governing small business. Small business owners should ensure they are up to date on how these laws affect employment, paid sick time and family medical leave. Below is a brief summary highlighting some of the changes.
Emergency Paid Sick Time
Employers with fewer than 500 employees are required to provide employees with 2 weeks of job-protected paid sick leave. The amount of sick pay for which the employer is responsible during this 2-week period depends upon the reason for the employee’s absence:
- If the absence is due to a federal, state, or local quarantine order, advice of health care provider to self-quarantine, or symptoms of COVID-19, the employee must be paid his/her regular rate. However, such pay is capped at $511/day and $5,110 over the course of the employees paid leave under this section; but
- If the absence is to care for a family member for the above purposes or to care for a child whose school has closed or due to a childcare provider being unavailable due to COVID-19, the employee must be paid 2/3 his/her regular rate (though not less than Arizona’s minimum wage). However, such pay is capped at $200/day and $2,000 over the course of the employees paid leave under this section.
It is important to note that these changes do not replace Arizona’s sick pay law, which remain in full force and effect.
Emergency Family Medical Leave
Employers with fewer than 500 employees are required to provide qualifying employees with 12 weeks of job-protected leave. The first 10 days are unpaid, though an employee can substitute accrued vacation, personal days, or other available paid leave during this period. For 10 days thereafter, the employer must provide the employee 2/3 of the employee’s usual pay for the number of hours the employee would otherwise be normally scheduled to work, but such paid leave is capped at $200/day and $10,000 over the course of the employee’s paid leave under this section.
To qualify, employees must have been employed by the employer for 30 days and the leave must be because the employee is unable to work (or telework) due to a need for leave to care for their child of an employee if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to a government stay at home or shutdown order as a result of COVID-19.
Under 50 Employees Exemption
These changes allowed the Secretary of Labor to issue regulations that exempt small businesses with fewer than 50 employees under certain circumstances. The Secretary recently issued guidance that such employers are exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. To claim this exemption, an authorized officer of the small business must determine that:
- The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
These changes went into effect on April 1, 2020 and have an expiration date of December 31, 2020. Employers should ensure compliance with these changes, as penalties for violations can be up to $10,000 in fines and/or 6 months imprisonment. For these reasons, it is highly recommended that small business owners consult with an attorney.