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New Federal Law Provides Paid Sick Leave for Employees, Tax Credit for Freelancers

Posted: 03/24/2020 | Author: Terry M. Cannon, Esq. for Creatives On Call

New Federal Law Provides Paid Sick Leave for Employees, Tax Credit for Freelancers

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With coronavirus fundamentally changing every American's way of life for the near future, I thought it would be useful to share some insights on the new law that allows workers to take time off for reasons caused by the virus. But first a disclaimer: I am a quarantined attorney and I hope this information is helpful, but it is not legal advice nor does it create an attorney-client relationship. If you need legal advice, call an attorney. This article is legal information and should not be seen as legal advice. You should consult with an attorney before you rely on this information. As you will see below, laws are full of caveats, exceptions, and nuances, so this is by no means a detailed analysis of all of the available benefits.

With that out of the way, let's heat up a bowl of alphabet soup and talk some law.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA) into law. The Act responds to the coronavirus outbreak by providing paid sick leave and free coronavirus testing, expanding food assistance and unemployment benefits, and requiring employers to provide additional protections for health care workers.

The first thing anyone will need to know about the FFCRA is that it goes into effect on April 2, 2020 and will expire at the end of the year unless it is renewed. The law does not apply retroactively, which means any claims arising before April 2 are not covered under the law. More on that below.

The second thing to know is that the law does not apply to businesses with more than 500 employees, and businesses with less than 50 employees may be able to get a waiver, which means the largest and smallest businesses may not be required to provide the benefits and protections created by the FFCRA.

I am going to discuss two parts of the FFCRA: 1) Emergency Family Medical Leave Expansion Act (EFMLEA), and 2) Emergency Paid Sick Leave Act (EPSLA).  

EFMLEA: You have probably heard of the Family Medical Leave Act (FMLA), the law that gives workers up to 12 weeks per year for some family and medical reasons. EFMLEA expands FMLA to create eligibility for leave specifically caused by the coronavirus outbreak without using the 12 weeks allowed under FMLA.

EFMLEA allows employees to take up to 12 weeks of leave in order to care for a child who is sick with coronavirus or whose school is closed. It does not apply, however if the employee has the tools to work from home and is able to do so. Employees taking EFMLEA leave will not be paid for the first 10 days, and then are eligible to receive a portion of their pay for the remainder of their leave. It is important to note that to receive these benefits you must have been an employee for at least 30 days.

EPSLA: this law provides up to 80 hours of paid leave (up to $511 per day) for full time employees who are unable to work or work from home. Part time employees are eligible based on the average hours worked during the prior two week period. There is no 30-day employment requirement for EPSLA benefits.

For EPSLA leave, an employee would qualify if they are unable to work due to a government order (shelter in place), a medical provider has recommended they isolate, or if they have symptoms of coronavirus and are seeking treatment.

Remember I said the law does not go into effect until April 2. That means if an employee has already missed work and would be eligible for leave under either EFMLEA or EPSLA, they should notify their employer, but they should know that the employer will not be required to comply with the law until April 2.

What Employees need to know:

  • All employers with 50-500 employees must comply with the law. Employers with less than 50 employees would have to obtain a waiver from the government to become exempt.
  • For EFMLEA benefits, employees must have worked for the company for at least 30 days.
  • You have to communicate with your employer to make them aware of circumstances causing you to need to miss work so you can best determine what type of leave you may be eligible for. 
  • Your employer cannot require you to use PTO for leave that qualifies under the new law starting April 2nd. 
  • Your employer cannot change its policies in order to limit the amount of vacation, sick days, or PTO they give to their employees. 

What Employers need to know:

  • You cannot change your policies to limit your employees' PTO. 
  • You cannot require an employee to take PTO instead of benefits provided under FFCRA.
  • If you have fewer than 50 employees, these laws apply to you unless you have received a waiver from the federal government. 
  • Payments made to employees taking leave under FFCRA qualify for a tax credit. The law also creates a credit against payroll taxes.

What Freelancers need to know:

  • FFCRA creates two types of tax credits for you. Self-employed persons are eligible for a tax credit at 100% of sick leave equivalent.
  • You also get a tax credit similar to the family leave benefits if you are unable to work due to taking care of a sick child or if their school is closed.
  • Talk to your tax professional and start keeping track of missed work starting April 2.

Terry M Cannon, Esq. is a practicing lawyer for a local law firm. He graduated from University of Cincinnati Law and is a member of the Kentucky Bar Association. 

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