The coronavirus COVID-19 outbreak is a serious concern for U.S. citizens. And unfortunately, your health isn’t the only thing at risk — you also have to worry about your paycheck. If you find yourself exposed to coronavirus (or at high risk of exposure), you are likely wondering if you will get paid for coronavirus sick leave.
Most industrialized countries require companies to offer paid sick leave. The United States and Japan are exceptions, according to a recent report of 22 wealthy countries by the Center for Economic and Policy Research.
However, the coronavirus pandemic is shaking things up. You have probably heard about the new sick leave law (Families First Coronavirus Emergency Response Act) that was passed on March 18th, 2020.
What are the key takeaways of the new legislation on paid sick leave due to coronavirus?
Here are the key takeaways of the Families First Coronavirus Response Act.
- Paid Sick Leave for Workers (COVID-19 related reasons). Employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.
- Complete Coverage. Employers receive 100% reimbursement for paid leave pursuant to the act.
- Health insurance costs are also included in the credit.
- Employers face no payroll tax liability.
- Self-employed individuals receive an equivalent credit.
- Immediate tax credit and fast refunds. Employers will be reimbursed an immediate dollar-for-dollar tax offset against payroll taxes will be provided. If a refund is owed, the IRS will send the refund as quickly as possible.
- Small Business Protection. Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed or child care is unavailable in cases where the viability of the business is threatened.
- Compliance requirements. Eligibility is subject to a 30-day non-enforcement period for good faith compliance efforts.
What kind of paid leave does the First Coronavirus Emergency Response Act provide?
The new law offers workers 80 hours (two weeks) of paid sick leave (2/3 of the employee’s pay) if they are ill, quarantined, seeking a diagnosis, or seeking preventive care for coronavirus. It also covers those who are caring for sick family members. Further, people who now have to stay home to take care of their children — either because schools have closed or their care provider is unavailable — will receive up to 12 weeks of paid leave.
Here are some more details on how much workers can receive and the help employers will receive to cover these costs (source: Department of Labor).
Paid sick leave credit
For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
Eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
Child care leave credit
In addition to the sick leave credit, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child-care leave credit. Eligible employers are entitled to an additional tax credit based on costs to maintain health insurance coverage for the eligible employee during the leave period.
Who is covered by the Families First Coronavirus Emergency Response Act?
The new law targets small and midsize companies, which now receive assistance so they can offer paid sick leave as a benefit. Government workers and employees of small and midsize companies and nonprofits will get access to the paid leave benefits as long as they have been employed there for at least 30 days. However, there are plenty of loopholes.
Small companies with less than 50 employees, healthcare providers, and emergency response workers can be exempt from this requirement. Additionally, companies with more than 500 employees are not even mentioned in the bill and are therefore not required to provide sick leave. According to the Census Bureau, only 2% of workers in the general merchandise industry work for companies that are small enough to be required to pay sick leave under the new law (source).
The good news is that 89% of workers at companies with more than 500 workers already have access to some kind of sick leave. On the other hand, the average paid sick leave for these companies is only eight days.
What about part-time and self-employed workers?
Part-time workers will also benefit from the new law. They will receive the amount they usually earn in a two-week period. Self-employed workers can claim tax credits for the time they miss work due to the coronavirus pandemic. Of course, these benefits only apply to those that pay taxes.
If you are self-employed and you’re affected by the coronavirus, here’s what you need to do. First, calculate your average daily income for the year. Then, multiply that number by the number of days you have to take off for COVID-19 related reasons. Claim this amount as a tax credit. You can start taking this tax break into account when you file your estimated quarterly tax payments.
Will you get paid if you’re asked to stay home on coronavirus sick leave?
Thanks to the new law, you are much more likely to receive some type of paid sick leave. However, it depends on who your employer is. If your company doesn’t offer paid leave and you can’t work from home, you could potentially face a period where you don’t get paid. Unfortunately, those who earn low wages and work in the service industry (who need the pay most) are at the greatest risk of this outcome.
By law, employers that are not required to pay for sick leave under the Families First Coronavirus Response Act only have to pay you for the time you worked. However, a recent study of large employers in the U.S. found that 68% would pay employees for the length of a quarantine, even if they didn’t have symptoms and couldn’t work from home. Another 12% said they would pay for a certain time period, like 14 days. And 20% didn’t know how they’d handle it yet. That being said, larger companies are generally likelier to pay out of pocket than small companies, because they can more easily absorb the cost.
Many are learning how to navigate this uncharted territory. If you are unsure what to expect, be sure to contact your employer to find out what steps they are taking.
FAQs about the coronavirus COVID-19
How prevalent is the coronavirus?
What does the federal Family and Medical Leave Act ensure?
The federal Family and Medical Leave Act ensures that employees can take 12 weeks of unpaid leave under qualifying circumstances. One such circumstance is a serious health condition. Being so, if you contract the coronavirus or need to take care of a family member who has, you may be able to take FMLA leave.
However, staying home to prevent exposure to the virus will not likely qualify under the FMLA. Further, this does not ensure that you’ll receive pay during this leave — it just means you’ll have a job to go back to. This is a shortcoming largely covered by the Families First Coronavirus Response Act.
What if you have reason to believe that your work environment puts you at high risk of exposure? If you’re worried about the safety of your workplace to the point that you refuse to go to work, there are state laws that can protect your employment status. For example, the California Occupational Health and Safety Administration (“Cal/OSHA”) offers protections to employees with unsafe work conditions. If you’re concerned, research the protections offered in your state.
How does the coronavirus spread?
The coronavirus spreads through body fluids, typically through direct, person-to-person contact within a range of about six feet. It spreads when infected people sneeze or cough, spreading respiratory droplets, which can land in the mouths and noses of others.
What are the symptoms of the coronavirus?
The symptoms of the coronavirus include fever, cough, and shortness of breath. They range from mild to severe, and in some cases cause death. The symptoms typically appear within 2 to 14 days of exposure.
How can you prevent the coronavirus?
The best way to avoid contracting coronavirus is to take measures to prevent exposure. There is no vaccine at this time. The CDC recommends common illness prevention steps, including:
- Wash your hands often.
- Use hand sanitizer containing more than 60% alcohol content.
- Stay home and avoid contact with people who are sick.
- Don’t touch your mouth, nose, or eyes when out in public or before washing your hands.
How can you treat the coronavirus?
The coronavirus does not have a treatment plan at this time. You can only treat the symptoms. If you begin showing symptoms, you should contact your healthcare provider right away.
How much does it cost to get treatment for COVID-19?
The cost is similar to the cost of treating pneumonia. This article provides more details on what you can expect to pay if you get a serious case of COVID-19.
How to survive unpaid coronavirus sick leave
If you worry about how you will manage your bills and expenses during this coronavirus pandemic, you’re not alone. If you’re not covered by these benefits, reach out to your local government representative for more support.
You may also want to consider a personal loan to help ends meet immediately. Some are considering tapping into their home equity through home equity loans and home equity lines of credit. Remember these programs have low interest rates but can put your home at risk if you miss payments. Always compare the rates and terms of at least three lenders to make sure you get the best deal available. While these are uncertain times, there are options available for those affected by this global pandemic.
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.