UNDERSTAND SICK LEAVE

Paid Sick Leave

Q. Who is eligible for paid sick leave?

Private sector employers with up to 500 employees and government employers are required to provide two weeks of paid sick leave (some restrictions may apply).  This benefit must replace all of the wages for an employee if he or she is sick or seeking a diagnosis, up to $511 a day.  If that employee is caring for another individual who is sick, the benefit must replace at least two-thirds of the employee’s wages up to a maximum benefit of $200 per day.

Those employers are eligible for a tax credit to offset this cost 100%.  Some employees, if deemed essential, may not be eligible for claiming leave.

For employers, Treasury Secretary Mnuchin has said rather than making businesses wait for a tax credit long in the future, he will allow businesses to reclaim the cash they paid to the IRS this quarter and to keep the cash they would have paid in payroll taxes in the months ahead.  Soon the IRS will be posting information about these credits on its website, including information on how to obtain advance payment of these credits.

Q. Is there expanded support for Family and Medical Leave?

Private sector employers with up to 500 employees and most government employers must offer up to 12 weeks of job-protected leave under the Family and Medical Leave Act (FMLA) for their employees unable to work or telework to take care of their children off from school, with some exceptions.  The first 10 days of this is unpaid, though workers can choose to use accrued vacation days, personal leave or other available paid leave for this time off.

Following that 10-day period, workers receive at least two-thirds of their normal pay rate, up to $200/day or $10,000 total.

Covered employers are eligible for a tax credit to offset this cost 100% and some companies under 50 employees may file for an exemption.

For employers, Treasury Secretary Mnuchin has said rather than making businesses wait for a tax credit long in the future, he will allow businesses to reclaim the cash they paid to the IRS this quarter and to keep the cash they would have paid in payroll taxes in the months ahead.  The IRS will be posting information soon on these credits on its website, including information on how to obtain advance payment of these credits.

Q. What if I am self-employed?

Self-employed Pennsylvanians and those working in the gig economy will receive the credit, even though they do not technically receive leave benefits through paid sick and family leave mandates.  Congress recently passed legislation that provides arefundable income tax credit in an amount of what self-employed workers would have otherwise received if they had been an employee receiving paid leave benefits.  For a covered day that a self-employed Pennsylvanian could not work, they can claim a “rough justice” credit in the amount of their average daily self-employment income for the year and can reduce their estimated quarterly tax payments in anticipation of this credit.

Q. What if I work at a non-profit?

Non-profit employers (subject to the same limitations) are covered by these leave policies and will still benefit from the credit, despite being tax exempt.  This is a credit against payroll taxes, which both nonprofit and for-profit employers pay.

For more information on leave, see this recently released FAQ from the Department of Labor on implementation guidance on paid leave and family and medical leave.