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Do You Need to Pay Quarantined Workers (and If Not, Should You Anyway)?

September 4, 2020 - minute read

As more businesses reopen, more employers find themselves dealing with quarantined workers who’ve been exposed to COVID-19. While requiring people to stay home when they’re sick, exposed, and/or likely contagious is key to containing the virus—and maintaining a COVID-free workplace—it raises a pressing question. Are employers required to pay sick leave to quarantined workers?

The answer: some are and some aren’t—but even those who aren’t may find it in their best interest to do so. For employers who are depending on their workforce to help them withstand the current downturn, it’s important to get it right.

COVID-19 Paid Sick Leave: The Law in a Nutshell

The Families First Coronavirus Response Act (FFCRA), which went into effect on April 2, 2020, mandates that employers with less than 500 employees are required to pay leave to sick and quarantined workers.

Employers with 500 or more workers are exempt, under the assumption that many already provide paid sick leave. Employers with less than 50 workers can apply for an FFCRA exemption, if complying would threaten their company’s survival.

Under the FFCRA, COVID paid leave is mandated on the following basis, regardless of how and where exposure occurred:

  • Two weeks of paid sick leave at the regular rate of pay, up to $511 per day, when the worker:
    • Is subject to any government COVID-19 quarantine order
    • Was advised by a health care provider to self-quarantine due to COVID-19, or
    • Is experiencing COVID-19 symptoms and seeks a diagnosis
Two weeks of paid leave at two-thirds the regular rate of pay, up to $200 per day, when the worker is caring for:
  • A quarantined family member or
  • A child under age 18 because his/her school or childcare provider is closed due to COVID
Up to an additional 10 weeks of paid leave at two-thirds the regular rate of pay, up to $200 per day, when the worker is caring for a child as described above. (To be eligible for this benefit, workers must be employed for at least 30 days.)

Part-time workers are eligible for the number of hours of leave that they work on average during the coverage period.

Who Foots the Bill for FFCRA-mandated Sick Leave?

Fortunately, FFCRA payments don’t come out of employers’ pockets. Under the FFCRA, employers can receive dollar-for-dollar tax credits for the payments they make.  

These tax credits are to be reported quarterly, using Form 941 for 2020: Employer's Quarterly Federal Tax Return. Employers who don’t have the funds set aside can request an advance on their tax credits by completing Form 7200: Advance Payment of Employer Credits Due to COVID-19.  

This allows subject employers a way to help keep COVID out of their workplace and communities, while providing much-needed funds to impacted workers—without hurting their bottom line.

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3 Reasons Large Employers Should Consider Offering COVID-specific Paid Sick Leave

Although employers with 500 or more employees aren’t required to offer this benefit, those who can afford to may find it strategically advantageous to do so, because:

  1. It will discourage low-wage workers who can’t afford to stay home from coming in sick, potentially triggering a COVID outbreak at work.
  2. If there is an apparent COVID outbreak at work, paying employees’ sick leave can help defuse any potential legal action.
  3. Offering these benefits will improve employee retention, morale, and peace of mind at a time when many people are stressed and struggling.

However, whether expanding their current paid sick leave benefit or creating a new one, employers should communicate their program’s terms and benefits clearly, defining:

  • The circumstances that trigger paid sick leave benefits
  • How much workers will be paid and for how long
  • Whether workers will continue to accrue PTO when collecting paid sick leave
  • How long the employer’s program will be in effect (under the FFCRA, benefits end December 31, 2020)

So Much to Manage!

In addition to federal legislation, a handful of states and cities have passed their own legislation regarding COVID-related paid sick leave, including California, Colorado and New York, as well as Los Angeles and San Francisco. Employers should make sure they’re compliant in all of their jurisdictions.

EPAY is committed to helping employers maintain compliance and manage their workers wisely as COVID-19 continues. For example, our flexible pay rule engine makes it easy for our customers to track and comply with varying paid sick leave laws, while our Compliance Portal provides a constantly-updated library of essential federal, state and local legislation. Plus, HR experts are available on demand.

Even if you’re not an EPAY customer, we welcome the opportunity to be of service. Take advantage of our Coronavirus Resource Center—it’s packed with facts and tips to help keep your workers safe and keep you compliant (and profitable). See how else we can help during this challenging time—and beyond.

Filed Under: Payroll & Tax COVID-19