Phase II Coronavirus Package // Mandatory Employer Paid Sick and Family and Medical Leave

March 19, 2020

(Updated 5/8)

The Department of Labor (DOL) website for the most up-to-date guidance and FAQs for employers and employees on COVID-19 can be found here.

Overview of Employer Paid Leave Requirements and Tax Credit Provisions below.

How do employees find out if they can receive sick leave?

H.R. 6201— the second Coronavirus bill, as passed the House— requires employers to provide notice of eligibility to employees. The Department of Labor guidance on employee expanded paid leave rights under the Coronavirus Response Act can be found here.

Are the paid leave mandates optional for small businesses?

The exemptions for small businesses will be for hardship situations and specific to leave related to caring for a child in the event of a school or child care provider closure. Rules for exemptions will be provided by the Department of Labor. Small businesses with less than 50 employees that provide paid sick leave and family and medical leave are eligible to be fully reimbursed through the tax credit.

Recent joint IRS, Treasury, and Labor guidance suggests the Administration aims to be as flexible as possible in that process. Of note to small businesses the guidance includes:

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

Is there an exemption to the mandatory paid leave requirement for the healthcare workforce?

Yes, employers of a healthcare provider or an emergency responders may elect to exclude such employees from both the paid sick leave and family and medical leave requirements. Sec. 3105 created a special rule for health care providers and emergency responders. The Department of Labor will publish regulations and guidance to make these special rules operational.

Are State and local governments eligible for the tax credit for reimbursement for paid sick leave and paid family leave?

Currently the bill excludes State and local governments from receiving the tax credit. However, this is being looked at and could be addressed in the Phase III package.

CRS has released a 3-page explainer document that reviews the paid leave and unemployment insurance provisions here.

Are the paid leave mandates optional for small businesses?

Is there an exemption to the mandatory paid leave requirement for the healthcare workforce?

Yes, employers of a healthcare provider or an emergency responders may elect to exclude such employees from both the paid sick leave and family and medical leave requirements.

Are State and local governments eligible for the tax credit for reimbursement for paid sick leave and paid family leave?

Currently the bill excludes State and local governments from receiving the tax credit. However, this is being looked at and could be addressed in the Phase III package.

How do employees find out if they can receive sick leave?

H.R. 6201— the second Coronavirus bill, requires employers to provide notice of eligibility to employees. The Department of Labor guidance on employee expanded paid leave rights under the Coronavirus Response Act can be found here.