The United States now has its first major federal paid leave law: The Families First Coronavirus Response Act (FFCRA). States like Colorado and New York already expanded their own paid leave laws, adding to the already-complex patchwork of state and local paid leave legislation. Needless to say, if you’ve been busy dealing with other impacts of these uncertain times, you have some catching up to do.
The big headline is: workers—largely hourly—who weren’t otherwise eligible for paid leave may now be now, if they’re impacted by Coronavirus. Like the crisis itself, the landscape keeps shifting, but here’s the least you should know, for now. One thing we can all be certain of is that more news will be forthcoming, and we aim to keep this post updated as more news comes out.
A Quick Recap of Paid Leave Statutes, Before Coronavirus
Up until now, the U.S. had no federal paid leave law. To fill the gap, 12 states, Washington D.C. and several dozen cities have passed legislation, while another 18 states have passed laws preventing the enactment of local paid leave statutes.
At this time last year, 76% of U.S. workers had some type of paid leave benefits, according to the Bureau of Labor Statistics. Of the other 24%, many include low-wage hourly workers. Only 51% of workers earning the lowest quarter of wages ($13.80 per hour or less) have paid leave benefits, according to Pew Research.
Traditional, low-wage workers without sick pay would go to work anyway, out of financial necessity. But in order to stop of the spread of this highly contagious virus, they need to stay home—and that reality is driving the new legislation.
The FFRCA in a Nutshell
Here are the essentials of the new federal paid leave law, which was signed into law on March 18 and goes into effect on April 2.
Most workers at small and midsize companies (firms with fewer than 500 employees) are covered, provided they’ve been employed for 30 days. This includes gig and part-time workers. Employers with more than 500 workers are exempt from the law, and those with under 50 people can apply for an exemption if the cost of providing leave would put them out of business.
Covered workers are eligible for three types of benefits when they’re affected by Coronavirus:
- Paid Sick Leave – Workers who are ill, quarantined or awaiting diagnosis may receive 100% of regular pay for up to two weeks, subject to a maximum of $511 per day.
- Paid Family and Medical Leave – Workers who are caring for family members who are ill, quarantined or awaiting diagnosis may receive up to 67% of regular pay for up to two weeks, subject to a maximum of $200 per day.
- Paid Family and Medical Leave for Childcare - Workers who are caring for children whose schools and daycares are closed due to Coronavirus may receive up to 67% of regular pay for up to 12 weeks, subject to a maximum of $200 per day. The first 10 days of leave is unpaid, but employees may elect to use their PTO.
Benefits are federally funded through reimbursement. Employers are expected to pay workers via regular payroll and will reimbursed in the form of payroll tax credits. Treasury Secretary Steven Mnuchin has indicated that the IRS would make cash available to small businesses who can’t afford to wait for a tax credit.
State-Level Emergency Coronavirus Legislation
In addition to the federal response, several states have enacted emergency rules.
For example, Colorado is temporarily mandating employers provide up to four days of paid leave to sick employees awaiting testing. The mandate only applies to certain industries that deal heavily with the public, including leisure/hospitality, food service, childcare, education, home health care, and nursing homes. (It should be noted that the building services industry is not on the list, although many janitors work in these sectors and are in fact on the frontlines of containing the spread of Coronavirus.)
In addition, New York recently passed a law providing up to two weeks of paid sick leave to workers forced into precautionary or mandatory quarantine, with requirements varying by business size. The law also expands paid sick leave benefits unrelated to Coronavirus.
Employers can expect to see more legislation proposed, if not passed, on every level. While the Senate recently killed the proposed PAID Leave Act—which aimed to fill gaps in the FFRCA—it’s presumably not the last we’ve heard.
In the meantime, retail giants like Walmart and Starbucks have voluntarily expanded their paid leave policies to better protect their workers, and other employers are considering similar measures.
While it’s a difficult decision for employers—especially at a time when many businesses are under great financial pressure—here’s one thing to keep in mind. Studies show that American cities that have enacted paid leave laws experienced a 40% drop in flu cases the following year.
Paid leave isn’t simply an attractive employee benefit—it’s a tool for controlling the spread of disease…in the workplace and beyond.