COVID-19 Emergency Paid Sick Leave Act (EPSL)

The Emergency Paid Sick Leave Act, scheduled to go into effect by April 2, 2020, requires employers employing less than 500 employees to pay their employees (regardless of how long they are employed) if they can’t work or telework for one of the following 6 reasons:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
  4. The employee is caring for an individual who is subject to quarantine or isolation order or has been advised by a health care provider to self-quarantine
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions, or
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor

Rate of pay:

Employees on leave due to reasons 1,2 and 3 are entitled to be compensated at 100% of their regular rate up to a maximum of $511 per day and $5110 in the aggregate for a total of 10 days.

Employees on leave due to reasons 4,5 and 6 are entitled to be compensated at two-thirds of their regular rate up to a maximum of $200 per day and $2000 in the aggregate for a total of 10 days.

Paid Sick Time: 

  • Full-time employees are entitled to up to 80 hours of paid sick leave.
  • Part-time employees are entitled to the number of hours that the employee works, on average, over a two-week period.
  • For hourly employees whose schedules vary, the rate should equal the average number of hours that the employee was scheduled per day over the six-month period prior to the leave.
  • If the employee did not work in the preceding six-month period, the paid leave rate should equal the “reasonable expectation” of the employee at the time of hiring with respect to the average number of hours per day that the employee would be scheduled to work.

Tax credits:

Employers will be able to recover the entire funds paid under the Emergency Paid Sick Leave Act and the Emergency Medical and Family Leave Expansion Act by reducing their payroll tax liabilities dollar for dollar. The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

  • If the employer’s tax liabilities are less than that amount paid to the employees, they will receive it from the IRS as an expedited refund which will take about 2 weeks from the date requested.
  • Important Note: Employers that are not mandated by this act, such as those having 500 or more employees, may not use these tax credits. Accordingly, if an employer decides that they want to pay their employees even if not mandated, while this is very commendable, they should know that they will bear the cost and will not be reimbursed via these tax credits as it is not available for them.

The IRS has advised that they will release specific guidance on this matter by the end of this week 03-27-2020.

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