Business owners may be revisiting their sick leave polices during COVID or simply trying to match up the federal emergency sick leave (Families First Coronavirus Response Act or “FFCRA”) with their own policies. Although we recommend having an employment attorney review and revise employment policies as a whole, the following can be used as a guideline regarding sick leave.
First, the employer’s current sick leave policy should provide at least one (1) hour of paid sick leave for every thirty (30) hours worked, capped at 3 days or 24 hours within a 12 month period, for eligible employees that have worked for thirty (30) or more days within the previous year. (California Labor Code section 246). The sick leave accrued should appear on the employee’s pay stub. (California Labor Code section 246). Employees can use this non-emergency sick leave in addition to the FFCRA sick leave noted below. (Section 5102(e) of the FFRCA).
However, an employer cannot require that the employee use the non-emergency sick leave prior to exhausting the FFRCA leave. (Section 5102(e)(2)(B) of the FFRCA).
Second, the FFRCA automatically applies to employers with less than 500 employees, without employers needing to change their sick leave policy. (Section 5110(2)(B)(i)(I)(aa) of the FFRCA).
Third, if an employee qualifies for one of the situations under the FFRCA (See Section 5102(a) of the FFRCA that the employee is subject to a quarantine order, advised by a healthcare provider to self quarantine, experiencing symptoms and seeking a diagnosis, caring for an individual who is or has been advised to quarantine, or caring for a child whose school has been closed), employers should take practical steps to document the employee’s reason for paid leave and create a written record, Such records should be maintained with complete confidentiality and kept secure and separate from the employee’s personnel or wage file.
Fourth, reimbursement for documented FFRCA sick leave will occur through tax credits on the employer’s quarterly federal payroll tax, typically Form 941. (IRS Bulletin 2020-57) As a practical matter, the records kept by the employer regarding sick leave reasons qualifying under the FFRCA will provide back up to justify the tax credit.
Employers with less than 500 employees are automatically eligible to receive payroll tax credits for qualifying emergency sick leave paid under the FFRCA. Employers should retain limited medical records for purposes of documenting such qualifying emergency sick leave. This emergency sick leave is in addition to any sick leave that may have accrued through California law.