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Legal Alert

COVID-19: Compliance with the FFCRA - Frequently Asked Questions and Answers

March 30, 2020

To assist employers in compliance with Emergency Families First Coronavirus Response Act (FFCRA), which takes effect on April 1, 2020, Maslon's Labor and Employment Group has reviewed the various guidance and provided answers to the most frequently asked questions below:

Frequently Asked Questions and Answers:

1.  What key resources have been provided by governmental agencies and Congress for further guidance to understand requirements of the Act?

  • The Department of Labor supplemented their original guidance on the FFCRA this week, available at U.S. DOL FFCRA: Q&A.
  • The Treasury Department and IRS also weighed in regarding the tax credit reimbursements under the Act (forms and additional guidance are expected soon).
  • Congress included provisions in the newly enacted CARES Act which clarify eligibility of rehired employees and facilitates reimbursement for leave paid under the FFCRA.

2.  What is the interplay between the two types of leave under the FFCRA?

Under the FFCRA, employees are eligible for:

  • up to 80 hours of Paid Sick Leave, and
  • up to 12 weeks of job-protected expanded FMLA leave – up to 10 weeks of which is paid.

The first 10 days of leave under the Emergency Family and Medical Leave Expansion Act are unpaid, but employees may use their Paid Sick Leave or any accrued vacation or paid time off (PTO) under their employer's policy. One additional difference between the two types of leaves relates to length of employment: employees are eligible for Paid Sick Leave on day one, while employees must be employed for at least 30 days to qualify for expanded FMLA leave.

If an employee does not use their Paid Sick Leave for the first ten days of expanded FMLA leave, the employee may use the Paid Sick Leave at any time prior to December 31, 2020.

3.  If an employee has already exhausted leave under the FMLA, are they eligible for twelve additional weeks of expanded FMLA leave?

No. An employee may only take a total of 12 weeks of leave during a 12-month period under the FMLA, including the Emergency Family and Medical Leave Expansion Act. If an employee has already used some or all of their 12 weeks of FMLA leave entitlement during the preceding 12-month period, their eligibility for additional expanded FMLA will be reduced by the amount of leave they have already used.

Similarly, any leave taken as expanded FMLA leave counts against the employee's entitlement to 12 weeks of preexisting FMLA leave in a 12-month period. For instance, if an employee takes 2 weeks of expanded FMLA leave because they are unable to work and need to care for a child whose school is closed due to COVID-19 and then later becomes eligible for traditional FMLA leave, the employee is only entitled to take the latter FMLA leave for 10 weeks. Note that if an employee is not eligible for traditional FMLA because the employer is not subject to regular FMLA leave or because the employee has not been with the employer for 12 months, this analysis does not apply–the FFCRA does not expand eligibility for traditional FMLA.

An employee is entitled to Paid Sick Leave regardless of the amount of leave previously taken under the FMLA. The Department of Labor guidance makes clear that Paid Sick Leave is not a form of FMLA leave. If an employee elects to use Paid Sick Leave for the first two weeks of expanded FMLA leave, which would otherwise be unpaid (see Question 1), then the first two weeks would count against the employee's entitlement to 12 weeks of expanded FMLA and FMLA leave in a 12-month period.

4.  Can an employee take Paid Sick Leave or expanded FMLA leave intermittently?

Employees may use Paid Sick Leave or expanded FMLA leave intermittently in some circumstances–the key factors are whether the employer agrees to the use of intermittent leave and whether permitting intermittent leave would increase COVID-19 exposure risk. The Department of Labor encourages employers and employees to be flexible and work together to establish a voluntary arrangement that may incorporate use of leave intermittently.

Employees not working from home: An employer may permit an employee who is working at their usual worksite to take their leave intermittently ONLY if the qualifying reason for their leave is to take care of a child whose school or place of care is closed due to COVID-19. This is likely to come up in situations where the employee shares child care duties with another adult, and the employee needs to miss some but not all work as a result of the school or daycare closure. An employee working at their usual worksite cannot take intermittent leave for reasons related to illness or exposure to COVID-19. Allowing intermittent leave in those circumstances would defeat the purpose of providing the leave as it would increase exposure risks for other employees.

Employees working from home: An employer may permit an employee who is working from home to take their leave on an intermittent basis for any qualifying reason. For example, an employee who has COVID-19, with only minor symptoms, may be able to telework for partial days but may need to work fewer hours due to the symptoms. Expanded FMLA leave may also be offered intermittently for employees to the extent the employee is unable to work their normal schedule of hours because they are caring for a child whose school is closed or for whom care is unavailable due to COVID-19.

An employer can determine the increment (e.g., no less than half-day increments) for intermittent leave. However, the Department of Labor encourages employers to be flexible when setting increments and setting intermittent leave schedules of employees. For instance, employers that have the flexibility could create solutions for parents who are able to telework but not full-time due to taking care of children. It may be feasible for parents to each take leave intermittently from their employers, allowing them to split childcare duties throughout the week.

5.  What costs are covered by the tax credits under the FFCRA?

Covered employers are eligible for dollar-for-dollar tax-credit reimbursement for all wages paid to an employee who takes leave under the FFCRA for a qualifying reason on or after April 1, 2020, subject to the per-day and aggregate caps. For a comprehensive breakdown of the qualifying reasons for Paid Sick Leave and expanded FMLA leave and their respective caps, view Maslon's March 19, 2020, Legal Alert. In addition, pursuant to guidance from the Treasury Department and IRS, additional tax credits will be available to cover costs paid or incurred by employers to maintain health insurance coverage for the eligible employee during the leave period.

6.  How do employers obtain the tax credit reimbursement?

The IRS will provide applicable forms, instructions and information for the procedures that should be followed to be reimbursed.

Under the newly-enacted CARES Act, employers seeking tax credits for paid leave provided under the FFCRA can retain amounts equal to qualifying sick and child care leave otherwise owed to the IRS in payroll taxes (withheld federal income taxes, Social Security, and Medicare taxes) each calendar quarter, without penalty. This means that instead of paying payroll taxes to the government and waiting for a reimbursement, employers can immediately offset their taxes that would otherwise be due.

To the extent payroll taxes are insufficient to cover the cost of qualifying leave under the FFCRA, employers can request an accelerated refund payment from the IRS. The IRS will provide application forms for accelerated payments, which the IRS hopes to refund within 2 weeks.

7.  Can employers be refunded for leaves beginning before April 1, 2020?

No. Any paid leave provided prior to the FFCRA's effective date of April 1, 2020, does not qualify for tax credit reimbursement. Along those lines, an employee may not request paid leave under the FFCRA for any unpaid leave taken prior to the FFCRA's effective date.

8.  What documentation can employers require for employees requesting Paid Sick Leave and expanded FMLA leave?

According to Department of Labor guidance, employers seeking tax credit reimbursement for leave under the FFCRA should maintain records documenting employee eligibility for leave. Employers should consult the applicable IRS forms and require employees to submit information the employer will need to claim its tax credit.

The employer should also collect supporting documentation for either type of paid leave. For Paid Sick Leave, this could be a copy of a governmental isolation order or a qualified health care provider's advice to self-quarantine. Health care providers, whose advice may be relied upon as a qualifying reason for Paid Sick Leave, include: licensed doctor of medicine, nurse practitioner, or other health care provider permitted to issue a certification for purposes of the FMLA. Note, however, that the CDC has advised that health care providers have limited capacity to provide standard medical documentation for absences. Employers may want to consider alternatives to this type of standard documentation.

Where leave is qualified due to school closure or lack of child care due to COVID-19, an employee should also provide a copy of the closure notice that was posted by the government, school, or daycare online or published in a newspaper. Employees could also provide an email announcing the closure from an employee of the school, childcare provider, or other place of care.

To the extent an employee fails to make a request with sufficient information, an employer is not required to provide leave. However, there are no "magic words" required to request the leave.

Employers should take a flexible approach regarding documentation, including accepting documentation by email and giving employees sufficient time to gather and provide all pertinent information. Consider advising employees that the company "reserves the right" to request documentation at a later date, especially in the case of documentation from health care providers.

9.  Is an employer responsible for continuing an employee's health insurance coverage while on leave?

Yes. An employee taking expanded FMLA leave is entitled to continuation of their elected group health coverage on the same terms as if they continued to work. This includes coverage for enrolled family members. However, an employee must generally continue to make normal contributions to the cost of their health coverage, unless the employer has offered alternative arrangements.

Employees receiving Paid Sick Leave are also entitled to continued health coverage. Also, Paid Sick Leave days taken by employees currently completing a waiting period for health plan eligibility count towards their waiting period.

10.  Are employees who are rehired following a layoff eligible for Paid Sick Leave or expanded FMLA leave?

Because all employees are eligible for Paid Sick Leave, regardless of how long they have been employed, employees are automatically eligible for Paid Sick Leave upon rehire.

Conversely, to be eligible for expanded FMLA leave, employees must have been on the employer's payroll for at least 30 calendar days prior to requesting the leave. Under the CARES Act provisions, an employee who is rehired after being laid off on or after March 1, 2020, can satisfy the requirement that they be "employed for at least 30 calendar days" if they were on the employer's payroll for at least 30 of the last 60 days before their layoff.

11.  Can employees who are on furlough qualify for this leave?

No. If an employer furloughs an employee because it does not have enough work or business for the employee, the employee is not entitled to then take Paid Sick Leave or expanded FMLA leave. This is true for employees furloughed before or after the effective date of the statute, April 1, 2020.

12.  Can I furlough or layoff an employee while they are on Paid Sick Leave or Expanded FMLA leave?

Employees may be selected for furlough or layoff while they are using Paid Sick Leave or expanded FMLA leave so long as their use of either leave is not a reason they were selected. The employee is entitled to Paid Sick Leave or expanded FMLA used prior to the furlough. After the furlough, the employee is no longer entitled to Paid Sick Leave or expanded FMLA leave.

13.  Which employees fall within the "health care provider" exemption, meaning an employer is not required to provide them Paid Sick Leave and/or expanded FMLA leave?

A "health care provider" is 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 definition encompasses these types of employees at any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.

Additionally, a "health care provider" includes any individual employed by a business that contracts with any institutions, employers, or entities to provide services or to maintain the operation of the facility. This definition 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.

Further, the highest official of a state or territory, including Washington D.C., may include any individual in this definition that it determines is necessary for that jurisdiction's response to COVID-19.

14.  When is an employer eligible for a small business exemption?

A small business is exempt from providing Paid Sick Leave and expanded FMLA if (1) the business employs fewer than 50 employees; (2) the qualifying reason for leave is care of a child whose place of care or school is closed due to COVID-19; and (3) providing Paid Sick Leave or expanded FMLA leave would jeopardize the viability of the business as an ongoing concern, based upon the determination by an authorized business official that:

The provision of Paid Sick Leave or expanded FMLA 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;

The absence of the employee or employees requesting Paid Sick Leave or expanded FMLA 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

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 FMLA leave, and such labor or services are needed for the small business to operate at a minimal capacity.

We Can Help

Contact Maslon's Labor and Employment Group with further questions or for assistance drafting FFCRA leave policies and leave request forms.

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