While it appears that the worst of the COVID-19 pandemic is over, cases still linger and employees are still occasionally affected. The good news for employers is that laws surrounding paid and unpaid sick leave are clearer now.

Your leave obligations depend on how many employees you have

The amount of COVID-19 sick leave and pay you must offer depends largely on whether you are required to comply with the Family and Medical Leave Act (FMLA). FMLA typically applies to private employers with 50 or more employees, public agencies, and elementary and secondary schools.  

If you have fewer than 50 employees

Businesses with fewer than 50 employees are not covered by FMLA. If you fall in this category, you are not required under federal law to provide leave when an employee is affected by COVID-19. However, you may have leave obligations under state or local law, depending on where you are located, conduct business or employ workers.

If you have 50 or more employees

If you have 50 or more employees, you may have to offer more leave and pay than a small business when your employees are affected by COVID-19. Under FMLA, workers who fall sick with COVID-19 or need to take leave to care for a sick family member can receive up to 12 weeks of unpaid leave. 

This means that you do not have to pay employees for additional leave that falls outside of your standard paid sick leave policy. However, you do have to hold the employee’s job for them. The 12-week period may only be taken once in a predetermined 12-month leave year.

Tax credits for businesses that offer paid leave

In the early days of the pandemic (April-December 2020), employers were required to offer paid family and medical leave under the Families First Coronavirus Response Act (FFCRA). As of 2021, you are not federally mandated to offer paid leave, but you can receive tax credits for doing so.

If you have fewer than 500 employees, you may be eligible to receive refundable tax credits, as long as you offered paid leave in 2020 and 2021. The FFCRA provides employers with credits that reimburse the cost of providing sick leave and pay to employees who had to take leave due to COVID-19 up until September 2021. Broadly, it includes employees who contracted COVID-19 themselves and those who took leave to care for family members.

Under the FFCRA, you can be reimbursed for up to 80 hours of paid sick leave per employee who took a qualifying COVID-19-related leave of absence. Separately, you may also be reimbursed for up to 10 weeks of additional paid leave for employees whose child’s school or daycare provider closed due to COVID-19 precautions. 

State-specific considerations

Keep in mind that many states have more stringent leave and pay requirements than the federal government. New York State, for example, requires employers with five or more employees to provide paid sick leave, and employers with fewer than five employees to provide unpaid sick leave. The requirement complements the state’s provisions providing emergency paid sick time due to COVID-19 and its protections for employees who need to take a day off to receive the vaccine.

Some states, including California, have implemented new 2022 COVID-19 pay requirements that could last indefinitely. California’s 2022 COVID-19 Supplemental Paid Sick Leave (SPSL) bill went into effect in February 2022. It requires businesses with 25 or more employees to pay employees for COVID-19-related leave, including leave for quarantine. California employers are also required to post a printed notice of the new law or send it electronically if they have teleworkers. The California SPSL law provides employees with up to 80 hours of paid leave.

The landscape of COVID-19 sick leave and pay requirements is tricky. Your obligations could vary depending on where your company is located, conducts business or employs workers. Contact your benefits adviser or legal counsel to ensure you’re in compliance.

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