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Modifications to Families First Coronavirus Response Act

4/1/20 – Deirdre Bird & Natalie Thompson

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Last week the U.S. Department of Labor (DOL) provided additional guidance on H.R. 6201: Families First Coronavirus Response Act (FFCRA), which goes into effect April 1, 2020. Among other things, the new law temporarily requires certain employers to provide paid sick and expanded family leave for employees affected by the coronavirus (COVID-19) pandemic, for leave taken between April 1, 2020 and December 31, 2020. Employers’ increased costs will be offset by new tax credits, which also may be available to self-employed individuals.

Covered employers must post the FFCRA notice found on the (DOL) Wage and Hour site at https://www.dol.gov/agencies/whd/pandemic so it is conspicuous to employees. The posting can be electronic, including by providing it to employees on an employee intranet or by email. Unlike other federal employment law notices, this poster doesn’t need to be posted in a place accessible by applicants.

General guidelines

FFCRA applies to employers with fewer than 500 employees, including those who work under a multi-employer collective agreement and whose employers pay into a multiemployer plan. Under FFCRA, employers with fewer than 500 employees generally must provide employees with up to 12 weeks of coronavirus-related job-protected leave, part of it paid, as an amendment to the Family and Medical Leave Act (FMLA). Of note, FFCRA includes small employers with fewer than 50 employees, a group excluded under traditional FMLA protected leave. To determine employee count for FFCRA, employers should count each full-time and part-time employee, including employees on leave, temporary employees, leased employees and other shared employees. Independent contractors are not included in the headcount.

FFCRA requires employers with fewer than 500 employees provide an employee with COVID-19-related leave if the employee is not able to work, including telework, because the employee:

1. Is subject to a federal, state or local quarantine or isolation order related to COVID-19;
2. Has been advised by a health care provider to self-quarantine related to COVID-19;
3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. Is caring for an individual subject to a federal, state or local quarantine or isolation order related to COVID-19, or COVID-19-related self-quarantine as advised by a health care provider;
5. Is caring for his or her child whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons; or
6. Is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services.

The paid leave provided by the new law is provided in addition to the employer’s current paid leave benefits. Decreasing or eliminating current paid leave on or after the law’s enactment date is restricted.

Covered employers must provide 80 hours of emergency paid sick leave (ESL) for full-time employees in certain situations (see below for more detail). Part-time employees are entitled to this paid sick leave for the average number of hours worked over a two-week period.

In addition, FFCRA generally provides expanded emergency paid family leave (EMFLA) in circumstances where an employee is unable to work (or “telework”) due to a need to care for a minor child whose school or paid place of childcare has been closed or is unavailable due to COVID-19 (see below for more details).

Be aware that certain exemptions and special rules may apply regarding expanded family and medical leave.

Paid sick leave

Under FFCRA, employees are eligible for emergency paid sick leave (ESL) regardless of how long they’ve worked with the employer, and employers cannot require an employee to use other paid leave before the ESL. Full-time employees are to receive up to 80 hours over the two-week period; part-time employees are to receive the number of hours the employee works over a two-week period. An employee qualifies for the leave when he or she is unable to work (or telework) because the employee:

1. Is subject to a federal, state or local quarantine or isolation order related to COVID-19;

2. Has been advised by a health care provider to self-quarantine related to COVID-19; or

3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis.

When ESL is taken for an employee’s own illness or quarantine, qualifications #1, #2, or #3, the leave is required to be paid at the employee’s FLSA regular rate, but no higher than $511 per day ($5,110 total for the 10-day period). Note that certain exemptions and special rules may apply regarding paid sick leave. 

Additional qualifications for ESL are items #4 and #6 from the General Guidelines list above:

4. Is caring for an individual subject to a COVID-19-related federal, state or local quarantine or isolation order, or been advised by a health care provider to self-quarantine; or

6.  Is experiencing substantially similar conditions specified by the U.S. Department of Health and Human Services.

When leave is taken for qualifications #4 and #6, the leave is required to be paid at two-thirds the employee’s FLSA regular rate (or the applicable federal FLSA minimum wage or state or local minimum wage, whichever is greater), up to $200 per day, and $2,000 for the total 10-day period.

Paid family leave

FFCRA amends FMLA to provide employees who’ve been on the job for at least 30 calendar days with up to 12 weeks of Coronavirus-related job-protected emergency family leave (EFMLA), part of it paid.

An employee qualifies for EFMLA when he or she is unable to work (or telework) because the employee meets qualification #5 from the General Guidelines list above:

5. Is caring for his or her child whose school or place of care has been closed, or whose childcare provider is unavailable, due to COVID-19-related reasons.

After 10 days, EFMLA is required to be paid for 10 weeks at two-thirds of the employee’s FLSA regular rate (or the applicable federal FLSA minimum wage or state or local minimum wage, whichever is greater), capped at $200 per day ($10,000 total). For leave under FFCRA, only the first 10 days of EFMLA may be unpaid. During the first 10 days of leave, employees may opt to use other paid vacation, sick or personal time off benefits, but employers may not require that employees use other paid leave. Employees may use ESL for the first 10 days of EFMLA, regardless of their tenure with the company.

Substantiating leave

To substantiate the FFCRA leave, the employee should provide a written request which includes:

  • His/her name;
  • The date or dates for which leave is requested;
  • A statement that the employee is unable to work / telework because of the need; and
  • A statement of the COVID-19 related reason the employee is requesting leave and written support for the reason. For a self-quarantine / quarantine, written support should include the name of the health care professional or government entity directing a self-quarantine or quarantine and the employee’s relationship to the person being quarantined. For a school closing / unavailable child care provider, the written support should include the child(ren)’s names and ages, the school / child care provider’s name, the school / child care provider’s message of closure / unavailability, representation that no other person will be providing care during the time requested, and the special circumstances requiring the care during daylight hours if the child is over 14. 

In addition, the organization will want to document:

  • how the organization determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work / telework; and
  • how the organization determined the amount of qualified health plan expenses. The qualified health plan expense allocation is made on a pro rata basis among covered employees, such as the average premium for all employees covered by the health plan, and pro rata on the time period of the leave.

Small business exemption

An employer with fewer than 50 employees may be exempt from the paid ESL and EFMLA requirements for providing employees with paid leave for an employee to care for his or her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons, if the paid leave would jeopardize the organization’s viability as a going concern. To meet the requirements of the exemption, an authorized officer of the organization must determine that:

1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  
2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  
3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

From U.S. Department of Labor Wage and Hour Division https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

Health care provider exemption

Employers may exempt health care providers from ESL or EFMLA. The DOL’s definition of which employees may fall in this exemption includes “anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. 

This definition includes any individual employed by an entity that contracts with any of the above institutions, employers, or entities institutions to provide services or to maintain the operation of the facility. This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. Also included, is any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.”

Tax credits for employers and the self-employed

Generally, covered employers can take a federal payroll tax credit for 100% of the qualified ESL and EFMLA wages they pay each quarter. The credits generally are available only to employers required to provide benefits by FFCRA.

The amount of wages taken into account for ESL is limited to $511 per day for leave taken for the employee’s own illness or quarantine, and $200 per day for leave taken to care for others or for the employee’s substantially similar condition, for up to 10 days. The amount of wages taken into account for EFMLA for each employee is capped at $10,000 for all calendar quarters. The credits cannot exceed the employer’s portion of social security taxes for the quarter. VonLehman recommends that employers proactively establish a method for tracking employee pay that falls under the Families First Coronavirus Response Act new laws for paid sick leave and paid family leave.

Wages taken into account when computing the credit amount won’t be taken into account when computing the existing Section 45S business tax credit for paid family and medical leave.

Note that tax credits may also be available to certain self-employed individuals.

Effective dates

The new law provides the paid leave provisions must take effect no later than April 1, 2020. They expire December 31, 2020. More relief affecting employees and businesses is sure to follow this legislation.

Contact VonLehman’s specialized Human Resources Consulting team at dbird@vlcpa.com or 800.887.0437 for more information related to the Families First Coronavirus Respect Act and for all the latest developments pertaining to COVID-19. 

Related Guidance:

Download the FFCRA Emergency Paid Sick Leave Act Chart HereDownload the FFCRA Guidance for Employers to Ensure Compliance