While global pandemics and more-localized epidemics have occurred over the years, they have not affected the workplace in the United States on a magnitude quite like the COVID-19 pandemic. Many employers have prepared for weather-related emergency closures but, until recently, far fewer have considered contingency planning for illness-related closures or government “stay-at-home” orders. Consequently, many employers have felt ill-prepared with the actions by the federal and state governments meant to curb the pandemic. While the implementation of these actions and the subsequent interpretations are unfolding daily and will continue to be clarified and updated in the days and weeks to come, below is general information regarding two laws enacted recently to help both employers and their employees.
Families First Coronavirus Response Act (FFCRA)
The Families First Coronavirus Response Act (FFCRA) was passed by Congress on March 18, 2020, was implemented on April 1, 2020, and is expected to end on December 31, 2020. It requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The Department of Labor’s Wage and Hour Division administers and enforces the new law’s paid leave requirements.
For covered employers, including certain public employers, and private employers with less than 500 employees, the Act provides for paid or partially paid sick leave and expanded family and medical leave provisions for employees. Small businesses with less than 50 employees may qualify for an exemption from the requirement to provide leave due to school closings or child care unavailability, if the leave requirements would jeopardize the viability of the business as an ongoing concern. Small businesses who believe that they meet this requirement to be exempt from the Act are strongly advised to consult with their legal counsel before taking it upon themselves to determine their exemption. In addition, employers of health care providers or emergency responders may elect to exclude such employees from eligibility for the leave provided under the Act.
Generally, the Act provides that covered employers must provide to all employees:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice from a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis.; or
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child, under 18 years of age, whose school or child care provider is closed or unavailable for reasons related to COVID–19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Treasury and Labor.
Emergency paid sick leave under the Act does not carry over from one year to the next and employees are not entitled to reimbursement for unused leave upon termination of employment. An employer may not make an employee utilize their paid time off in lieu of the full payment of the emergency paid sick leave. The emergency paid sick leave must be provided to the employee prior to the use of any available paid time off, i.e. vacation, sick days, personal days, etc. that the employee may currently have earned or accrued. In the case where partial payment is due an employee may elect to substitute any earned or accrued vacation, sick days, personal days, etc. to make them whole during the two week period.
A covered employer must provide to employees that it has employed for at least 30 days:
- Up to an additional ten weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child, under 18 years of age, whose school or child care provider is closed or unavailable for reasons related to COVID-19. There may also be limitations of this leave for employees who have used a portion of leave under the Family and Medical Leave Act (FMLA) prior to April 1, 2020.
The expanded family and medical leave is similar to the FMLA in three aspects. First, intermittent leave may be an option for employees with permission of the employer for certain qualifying reasons. Second, employer-provided group health coverage must be continued under the same terms and conditions as prior to a leave. Third, employees are entitled to be restored to the same or equivalent position when the leave is finished.
Over the course of the last few weeks, the DOL’s FFCRA Questions and Answers document has provided continued clarification for employers. The DOL has also issued temporary regulations for the FFCRA that include additional direction on group health coverage requirements during the paid leaves and guidance on the type of documentation that must be provided by employees to their employer for either the paid sick leave or the expanded family medical leave, based on the qualifying reasons for the leaves. The DOL’s Q&A may found at www.dol.gov/agencies/whd/pandemic/ffcra-questions .
The Internal Revenue Service (IRS) has also provided guidelines for employers who plan to claim tax credits for
qualified leave under the emergency paid sick leave or the expanded family and medical leave. According to the IRS, in addition to the requested leave documentation from each employee, employers must have documentation that demonstrates: 1. how the amount of qualified leave wages are paid to employees; and 2. the methods utilized to determine the amount of qualified health plan expenses allocated to wages. Employers must also maintain the Form 941, Employer’s Quarterly Federal Tax Return, Form 7200, Advance of Employer Credits Due to COVID-19, and any other applicable filings. While documentation is required by both the DOL and the IRS, employers are encouraged not to immediately deny a leave for lack of accurate documentation. Instead, the employer should give the employee latitude to submit the required documentation.
Finally, it’s important to note that employers have no obligation to provide these leaves to employees who do not meet the eligibility qualifications for leave under the FFCRA. However, employers may need to consider allowing the use of paid time off benefits, or providing unpaid leave as a reasonable accommodation under the Americans with Disabilities Act and Its Amendments Act (ADAAA). It is recommended that each employee’s needs are evaluated on a case-by-case basis with a principal of flexibility.
Coronavirus Aid, Relief, and Economic Security Act (CARES ACT)
President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES ACT) into law on March 27, 2020. This $2.2 trillion dollar stimulus act addresses multiple elements that provide temporary assistance and resources to employers and employees during the COVID-19 pandemic, including:
- Payroll protection loans, with possible loan forgiveness, for businesses with less than 500 employees.
- Treasury’s Exchange Stabilization Fund for larger employers.
- Group health plan coverage for COVID-19 diagnostic tests, vaccinations, and treatment.
- Distributions without penalties from qualified retirement-savings plans and waiving of required minimum distributions (RMDs).
- Enhanced unemployment assistance and extended benefits, for both furloughed and laid off employees.
- Employer tax credits and retention credits for expenses related to social security taxes.
- Student loan repayment relief.
- Stimulus checks and delayed tax filing requirements.
While “stay-at-home” orders continue to be extended, most recognize that COVID-19 is not going to be a short-lived event and that, once the actual orders have lifted, there will be long-term consequences for businesses and industries, throughout the United States and the world. Unemployment rates, just recently so low that employers struggled with finding talented workers, are rising exponentially, and despite the assistance that the federal government and state governments are providing, some businesses may not be able to withstand the circumstances due to the pandemic. Employers may already feel an information-overload as they attempt to navigate the new information that is disseminated daily, but they are encouraged to continue utilizing resources from federal and state government agencies and employment law attorneys as they make important business-related decisions.
For additional information on the FFCRA or the Cares Act, please contact us at www.newfocushr.com.
Written by: Kathi Walker, SHRM-SCP, PHR
Sr. HR Consultant
Source: U.S. Department of Labor Wage and Hour Division Families First Coronavirus Response Act: Employer Paid Leave Requirements