The Families First Coronavirus Response Act (FFCRA) signed into law on March 18 requires certain employers to provide employees with paid sick leave or expanded leave because of COVID-19. While the IRS and Department of Labor (DOL) just released further guidance to clarify some of the Act’s ambiguities, we’ve put together an FAQ to help you navigate the Act and better understand how it impacts you.
Disclaimer: COVID-19 has introduced new legislation that is rapidly changing and evolving hour by hour. Our response is based upon what is known at the time of this communication and is intended to be general advice regarding the current understanding of current legislation. As we are not a law firm, we are not able to provide a detailed analysis of your unique employee situation. Please consult your legal counsel.
Families First Coronavirus Response Act FAQ
Q: Does the FFCRA apply to nonprofit organizations and their employees as well?
A: Yes, a “covered employer” includes a private entity or individual that employs fewer than 500 employees, as well as any public agency or other entity that is not a private entity or individual that employs one or more employees. (As of March 25, 2020)
Q: If an employer laid their employees off, can they re-hire them covered under this Act?
A: Employees would be immediately eligible for the emergency paid sick leave, since there is no length of tenure requirement.
Re-hired employees would be eligible for emergency FMLA if the employee was not laid off earlier than March 1 and had worked for the employer for not less than 30 of the last 60 calendar days prior to the layoff.
If these qualifications are not met, the employee would need to either be paid during this time via “normal compensation” or furlough (a voluntary or involuntary short-term program where employees are forced to take unpaid leave to reduce payroll costs, but remain employed and maintain benefit eligibility) until the 30th day of employment when they are then eligible for emergency FMLA.
Remember, the first two weeks of emergency FMLA is unpaid. If the employer had their employees on furlough (temporary unpaid leave), and did not actually terminate them, then employees would be eligible for emergency paid sick leave and emergency FMLA, assuming they meet one of the qualifications. (As of March 25, 2020)
Q: Do the state-mandated “stay at home,” “shelter in place” or other similarly titled state orders qualify for FFCRA?
A: There is no official guidance from the IRS or DOL, but we currently believe the answer is no. For additional information, visit: https://www.natlawreview.com/article/does-covid-19-paid-sick-leave-apply-to-government-ordered-shutdown-your-business (As of March 25, 2020)
Q: How does this work when an employee is using a private day care or a family member for day care?
A: A “child-care provider” is a registered provider who receives compensation for providing child-care services on a regular basis. So, to qualify for emergency paid sick leave, a qualified child-care provider must close as a result of COVID-19 and now the employee must care for that child. (As of March 25, 2020)
Q: What about the time prior to April 1 (note the new effective date)? Do employers have any responsibility to pay employees?
A: Employers can place their employees on furlough (temporary unpaid leave), until April 1st when emergency paid sick leave goes into effect. Employers can also have employees use PTO or vacation, etc. during that time period per their normal policies. (As of March 25, 2020)
Q: Can we start to pay employees before April 1?
A: The emergency family leave and paid sick leave laws are effective April 1, 2020. If an employer offers this leave prior to April 1, 2020, the employer will not be reimbursed via tax credits for any leave given to employees before the effective date. If an employer enacts these leave provisions before April 1 and employees take leave prior to April 1, the employer will need to pay for the leaves without reimbursement from the IRS. Employers will also need to comply with the FFRCA’s two requirement on or after April 1.
Q: If a company is closed from the governor’s decree, and one employee has a school-age child at home, and another employee doesn’t, can the company pay one under the act and take the credit but not the other?
A: Yes. (As of March 25, 2020)
Q: Are all employees who have children under age 18 eligible for paid sick leave?
A: Not necessarily. The child’s school or registered child-care provider must be closed due to the concerns over COVID-19. For parents who are homeschooling their kids, the home doesn’t meet the definition of “school” for this purpose.
“School” means: a) any public or nonprofit private school of high school grade or under, and b) any public or licensed nonprofit private residential child care institution (including, but not limited to, orphanages and homes for the intellectually disabled, but excluding Job Corps Centers funded by the Department of Labor). For purposes of this paragraph, the term “nonprofit,” when applied to any such private school or institution, means any such school or institution that is exempt from tax under section 501(c)(3) of title 26.
If the child doesn’t attend school (i.e., dropout or pre-school age child under the care of a parent), then the provisions regarding closing of a “place of care” won’t kick in. (As of March 25, 2020)
Q: How are the wages paid via FFCRA taxed?
A: Wages paid via the FFCRA are exempt from employer Social Security but are subject to employer Medicare. The tax credit is increased by the amount of the employer Medicare on such wages. The employee will continue to pay taxes, as normal, and have “normal” deductions and garnishments as required. (As of March 25, 2020)
Q: If a company is not a covered employer under FFCRA, but they opt to provide the benefit to employees, can they still receive the credit?
A: No, the employer would not be eligible for the tax credit. However, the employer can make the decision to provide pay continuation to employees if they so choose. (As of March 25, 2020)
Q: How does this Emergency FMLA impact employees who are already planning to have FMLA later in the calendar year for a maternity leave?
A: FMLA is a federal act. It is important to note that many states also have FMLA legislation that will need to be taken into consideration to ensure appropriate coordination of benefits. There are many nuances to FMLA (federal and/or state) that will need to be taken into consideration. (As of March 25, 2020)
Q: What if an employee is currently on FMLA?
A: If an individual is currently on FMLA, under the emergency FMLA, they would be able to transition to these provisions and would be able to receive compensation depending on the reason for leave as outlined in the expansion legislation. However, the maximum leave available remains at 12 weeks per 12-month period. Having said that, this is where state acts come into play, and employers will need to give careful consideration to these acts to ensure appropriate benefit coordination. (As of March 25, 2020)
Q: What kind of documentation/support is needed for employees to take expanded sick leave, and what will employers need to have in their files to support credits if audited later?
A: It is recommended that employers obtain documentation from employees whenever possible to support their request and to enable employers to determine if the request is for self-care or for family-care (e.g., email, form completion, copies of closure notices and related).
In addition, we are recommending that clients maintain documentation when making decisions that stray from their “normal” administration of their policies and procedures in light of COVID-19. When such decisions are made, we encourage employers to cite the reasons for the actions and the date on which that decision was made. (As of March 25, 2020)
Q: Will the availability of the leave via the FFCRA extend into 2021?
A: The new provisions end on December 31, 2020, and do not extend into 2021. (As of March 25, 2020)
Q: Do clients need to pay an employee who is terminated or resigns?
A: Neither the emergency paid sick leave nor the emergency FMLA need to be paid out to terminated employees. (As of March 25, 2020)
Q: What do employers need to communicate to their employees?
A: Each covered employer must post a notice of the FFCRA requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees or posting this notice on an employee information internal or external website. The notice is located here: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
If you hire a job applicant, you must convey this notice to them, either by email, direct mail or posting the notice on the premises or on an employee information internal or external website. (As of March 25, 2020)
Q: What measures can I take to screen for employee/candidate illness to mitigate workplace COVID-19 exposure?
A: The EEOC says employers may:
- Ask employees who call in sick if they are describing symptoms of COVID-19
- Measure employees’ body temperature (though the EEOC cautions that some people with COVID-19 do not have a fever; ensure employees assigned to take temperatures have appropriate personal protective equipment; if temperature is in excess of 100.0 degrees, employees can be sent home).
- Require employees with COVID-19 symptoms to leave work and/or to stay home
- You are permitted to ask them to seek medical attention and get tested for COVID-19. The CDC states that employees who exhibit symptoms of influenza-like illness at work during a pandemic should leave the workplace. The Equal Employment Opportunity Commission (EEOC) confirmed that advising workers to go home is permissible and not considered disability-related if the symptoms present are akin to the COVID-19 coronavirus or the flu.
- Require doctors’ notes certifying that employees are fit to return to work. The EEOC acknowledges that healthcare professionals may be too overwhelmed to provide such notes, so other methods, such as alternative forms, stamps or emails may be necessary
- Screen job applicants for COVID-19 symptoms after making a conditional offer of employment, as long as the employer does so for all entering employees in the same type of job
- Take a job applicant’s temperature as part of a conditional post-offer pre-employment examination
- Delay the start date of an applicant with COVID-19 or symptoms related to it
- Withdraw a job offer when it needs the applicant to start immediately but the applicant has COVID-19 or symptoms of it. (As of March 25, 2020)
Q: If an employee tests positive, is this an OSHA reportable event?
A: OSHA recently published guidance on this issue. OSHA recordkeeping requirements mandate covered employers record certain work-related injuries and illnesses on their OSHA 300 log. You must record instances of workers contracting COVID-19 if the worker contracts the virus while on the job. The illness is not recordable if worker was exposed to the virus while off the clock. You are responsible for recording cases of COVID-19 if:
- The case is a confirmed case of COVID-19;
- The case is work-related, as defined by 29 CFR 1904.5; and
- The case involves one or more of the general recording criteria set forth in 29 CFR 1904.7 (e.g., medical treatment beyond first-aid, days away from work). (As of March 25, 2020)
Q: If I am a covered employer, in what situations do I need to provide sick pay as outlined in the Paid Sick Leave Act (PSLA)?
A: As of April 1, 2020, employers must provide paid sick leave if the employee is unable to work, or telework, and:
- Is subject to federal, state or local quarantine or isolation order;
- Has been advised by a healthcare provider to self-quarantine;
- Is experiencing symptoms of COVID-19;
- Is caring for a quarantined individual;
- Is caring for a minor child whose school or place of care has been closed due to COVID-19; or
- Is experiencing any other substantially similar condition related to COVID-19.
For self-care situations in items 1, 2 and 3, the maximum paid sick leave available is “regular pay” up $511 per day, up to a maximum of $5,110.
For family-care situation in items 4, 5 and 6, the maximum paid sick leave available is up to $200 per day, to a maximum of $2,000. (As of March 25, 2020)
Q: How is “regular pay” defined for someone who gets paid primarily commission or tips?
A: Based upon our understanding today, the organization should use a six-month lookback period and consider the total renumeration of pay divided by the total number of hours worked to determine the regular rate of pay as defined by the Fair Labor Standards Act (FLSA). (As of March 25, 2020)
Please see: https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-rate
Q: How do we handle pay for an employee who continues to work but at reduced hours (e.g., went from 40 hours to 20 hours)?
A: If this situation has already occurred, then the employee would be able to file for unemployment to determine if there would be any partial benefits available. If this situation occurs on or after April 1, then employee is eligible for the fulltime PSLA 80 hours of paid of leave. If they meet the criteria under the emergency FLMA, then they could also use those benefits. (As of March 25, 2020)
Q: We want to reduce our work schedules for some (or all) of our employees due to a reduction in business during this COVID-19 outbreak. What do we need to know about doing this with our employees who are FLSA exempt from overtime?
A: Under the FLSA, reducing and altering schedules is pretty straightforward for nonexempt employees. Not so for salaried exempt employees. “Salaried” means the employee is paid the same weekly amount for any workweek in which they perform any work. A workweek is commonly Sunday through Saturday but can vary by employer practices.
There is an exception where employers can occasionally and prospectively reduce an exempt employee’s future weekly salary due to a bona fide reduction in the amount of work expected due to economic slow-down or “long-term business need.” Be mindful that the minimum weekly threshold for exemption status is $684 a week — period. This minimum amount CANNOT be prorated.
For changes to schedules, start at the beginning of a new work week. Also consider the terms and conditions of any employment contracts/agreements. If you want to reduce schedules for exempt employees, we recommend you talk with an employment attorney first and document any arrangements. (As of March 25, 2020)
Q: What if an employee volunteers to take an unpaid leave of absence?
A: This can be done with both exempt and non-exempt employees under the FLSA. It’s more complicated with exempt employees. To preserve exemption status, they must take leave in at least full-day increments, and it must be truly voluntary. It is advisable to have the employee sign a simple document to this effect. (As of March 25, 2020)
Q: Can an employee take more than 12 weeks of FMLA in a year?
A: The emergency FMLA expands the types of situations covered under the Family and Medical Leave Act but does not extend the time available for leave each year. Under the Federal Law, the total combined time of both the emergency FMLA and FMLA does not exceed 12 weeks. Many state laws allow for additional time in certain situations. (As of March 25, 2020)
Q: Should I set up a new pay code for this act that doesn’t have employer Social Security pulled from it?
A: Your payroll provider or software provider is likely setting up systemwide codes, so please contact your provider for information. (As of March 25, 2020)
Q: What penalties are associated with failure to comply with the Paid Sick Leave Act?
A: A failure to comply with the act constitutes a violation of the FLSA, and employers will face liability in accordance with violations of the FLSA. (As of March 25, 2020)
Q: What if our policies are more generous than the FFCRA?
A: If your policies are more generous than the FFCRA, like unlimited sick leave, then your policies could continue as is. However, in order to be eligible for tax credits, it is recommended you create appropriate pay codes in payroll so you can appropriately track and take available tax credits. (As of March 25, 2020)
Visit the COVID-19 resource center to access more information on how COVID-19 may impact you.