Employers: DOL and IRS Provide Further Guidance on FFCRA

The Department of Labor (DOL) has issued temporary regulations providing its interpretation of the Families First Coronavirus Response Act (FFCRA), offering further guidance to employers as they seek to comply with the new law that went into effect on April 1, 2020.

The lengthy regulations can be viewed in full at Paid Leave Under the Families First Coronavirus Response Act. For your convenience, a summary of key points including guidance for leave requests and IRS Documentation is provided below:

THE DOL AND IRS CLARIFY KEY DOCUMENTATION AND RECORDKEEPING REQUIREMENTS

Employees Must Make Requests for Leave in Writing. To make sure an employer has appropriate documentation to support its claim for tax credits, an employer should require an employee requesting Paid Sick Leave or expanded FMLA leave to submit a written request including the following information:

1. The employee's name.
2. The date(s) for which leave is requested.
3. A statement of the COVID-19 qualifying reason for leave.
4. A statement that the employee is unable to work or telework because of the COVID-19 qualifying reason. The DOL regulations provide that this statement may be oral. However, to support an employer's receipt of tax credits, the IRS requires this statement to be included in an employee's written request. To the extent possible, an employer should obtain this statement in writing, but this does not need to occur before the leave begins.     

In addition, employees must provide the following information depending upon the qualifying reason for leave in the employee's written request for leave:

1. If an employee takes leave due to an order to isolate or quarantine, the employee must include the name of the government entity that issued the order.  
    
2. If an employee takes leave due to advice by a health care provider to self-quarantine, the employee must include the name of the health care provider.
   • If the person subject to quarantine or self-quarantine is not the employee and the employee is seeking leave to care for that person, the employee must also include the person's name and the person’s relationship to the employee.
      
3. If an employee is seeking leave to care for a child whose school or childcare has been closed or is unavailable, the employee must provide: (a) the name and age of the child; (b) the name of the school, place of care, or child care provider that closed or became unavailable; and (c) a statement representing that no other suitable person is available to care for the child during the period of the requested leave.  
   • If an employee is unable to work or telework during daylight hours due to a need to provide care for a child older than fourteen years old, the employee must also provide a statement that special circumstances exist requiring the employee to provide the care. 

Employer Recordkeeping of Employee Leave Requests. Employers are required to retain all documentation provided by employees in support of their leave requests for four years, regardless of whether the leave was granted or denied. If an employee provided oral statements to support a request for leave, the employer needs to document and maintain that information in its records as well for four years.

IRS Documentation. The IRS issued guidance that details the information and documentation that an employer needs to claim its tax credits: IRS COVID-19 Related Tax Credits: Q&A. The IRS has issued a new Form 7200 for employers to use when seeking an advance payment of the tax credits.

Recordkeeping to Support IRS Tax Credits. In addition to the relevant tax forms (Form 7200 and Form 941), Employers should keep, for four years, documentation to show how the employer:

• Determined the amount of leave paid to each eligible employee; and
• Calculated the amount of qualified health plan expenses allocated to wages.

NEW REGULATIONS FURTHER CLARIFY LEAVE REQUIREMENTS

The new DOL regulations provide additional information about other aspects of the new leave requirements, and the DOL has supplemented their guidance on the FFCRA, available at U.S. DOL FFCRA: Q&A. Key areas that the DOL has clarified in its new regulations and guidance are summarized below:

• Furloughed and Laid Off Employees Do Not Count. For purposes of determining whether an employer has 500 or fewer employees, employers do not count employees who have been furloughed or laid off.
   
• Eligibility for Leave Depends Upon Being Unable to Work. An employee is only eligible for Paid Sick Leave or expanded FMLA leave if the employee is unable to work or telework. In other words, but for the COVID-19 qualifying event, the employee could perform work or telework that the employer has available.
   
• Subject to a Quarantine or Isolation Order Related to COVID-19.  The DOL regulations interpret Federal, State, and local quarantine or isolation orders broadly. However, to be entitled to Paid Sick Leave, the government order must be the reason the employee is unable to work or telework even though the employer has work that the employee could do. An employee is not eligible for Paid Sick Leave if the employer temporarily closes down and does not have work for the employee, even if the closure was due to the government order.
   
• Paid Sick Leave While Seeking Medical Diagnosis is Limited. If an employee requests Paid Sick Leave on the grounds the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis, leave is limited to the time the employee is unable to work because the employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.
   
• Self-Diagnosis is Not Sufficient. An employee who decides to self-quarantine without seeking a medical diagnosis is not eligible for Paid Sick Leave.
   
• Accrued PTO May Supplement Pay for Expanded FMLA Leave. An employee and employer may agree to use accrued PTO to supplement paid expanded FMLA leave so the employee receives 100% of the employee's regular pay, instead of the 2/3 amount provided under the FFCRA. 
   
• Self-Determination of Limited Small Business Exemption. The DOL regulations make clear that an employer need not apply for the small business exemption but can make a determination on its own that it satisfies the regulatory criteria for this exemption. Businesses must document each denial of leave and maintain the required documentation for a period of four years.

We Can Help

Contact Maslon's Labor and Employment Group with further questions or for assistance with the FFCRA.