How The New Emergency Paid Sick Leave Law Affects Your Practice
April 2020Practice Management Personnel
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On March 18, President Trump signed H.R. 6201 (The Families First Coronavirus Response Act) into law. The most important provisions relate to emergency paid sick leave, potentially providing your staffers paid leave if they must take time off from work due to the coronavirus.
The new law provides qualified staffers (those employed for at least 30 days) with two weeks of paid sick leave if they are ill, quarantined, or showing symptoms and seeking diagnosis or preventative care for the coronavirus, or if they are caring for family members sick with the virus. Note that the law does not grant additional sick leave simply because the practice is closed due to the pandemic. It does provide up to 12 weeks of paid family leave to those caring for children whose school or daycare has closed because of the coronavirus.
Sick Leave Amount
Employees who are sick with the coronavirus, quarantined/isolated, or seeking care for themselves, will earn the full amount of their regular pay, up to a maximum of $510 a day for two weeks, or $5,110 total. Staffers caring for a sick family member or a child whose school or daycare is closed due to the coronavirus will receive two-thirds of their usual pay, up to a daily limit of $200.
However, the Department of Labor has the authority to exempt small businesses with fewer than 50 employees from the requirement to offer paid leave to care for children under 18 whose schools are closed or whose childcare provider is unavailable, if it would jeopardize the viability of the business going forward.
The ADA is lobbying hard for an exemption for dental practices. Since the ADA has recommended that practices defer all elective procedures and provide only emergency care to help limit the spread of the coronavirus, production for complying practices (excluding endodontics and oral surgery) will likely drop by 90% or more from typical levels. As a result, we expect complying dental practices to be ruled exempt from the required payment for this 12 weeks of family leave, which could cost up to $9,600 per staffer.
Reimbursing the Cost
In order to offset the cost to the practice, the new law provides that the full amount of sick leave pay granted will be reimbursed within three months, in the form of a payroll tax credit to the practice. This reimbursement will also include any practice contribution for staff health insurance premiums paid during the leave, and is fully refundable. These paid leave provisions are not permanent, but rather a temporary response to the coronavirus, and expire on December 31.
The Department of Labor is expected to issue regulations on the new law shortly. We will provide more detailed information as it becomes available.
The McGill Advisory content is provided for informational purposes only and does not constitute legal, accounting, or other professional advice.
Copyright © 2020 John K. McGill & Company, Inc.