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What Businesses Need to Know About Employee Leave and the Families First Coronavirus Response Act (FFCRA)

By: Alissa A. Kranz Posted on: Monday, April 13th, 2020

In an effort to help families and individuals struggling with the impact of COVID-19, Congress passed the Families First Coronavirus Response Act (“FFCRA”), which went into effect on April 1, 2020, and will remain in effect until December 31, 2020.  The FFCRA allows for paid sick leave through the Emergency Paid Sick Leave Act (“EPSLA”) and paid emergency family leave through the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), and applies to substantially all for-profit and non-profit employers that employ between one and four hundred and ninety-nine employees.  Thus, it is extremely important for business owners to be aware of what the FFCRA requires, so that they can ensure that they are following the law.  Below, we discuss some of the key provisions of the EPSLA and EFMLEA to help business owners come up to speed, though, please keep in mind, that this discussion is not comprehensive and will not address each and every situation or decision an employer may face.  Additionally, nothing in the EPSLA or EFMLEA diminishes the rights or benefits that an employee is entitled to under any other Federal, State, or local law; collective bargaining agreement; or existing employer policy, so businessowners will need to take care to consider the impact of those.

If you would like to further discuss your specific situation or the process your business should put in place to handle requests for leave, please give us a call.  We would be happy to help!

What Does the FFCRA Generally Require in Terms of Leave?

EPSLA

Requires employers to provide full-time employees with 80 hours of paid sick time, and part-time employees with a number of paid sick time hours equal to the average number of hours they worked over a two-week period if the employee is unable to work or telework because:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19 (Reason 1);
  2. The employee has been advised by a health care provider to self-quarantine because of COVID-19 (Reason 2);
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis (Reason 3);
  4. The employee is caring for an individual subject to a quarantine or isolation order by a governmental entity, or who has been advised by a healthcare provider to quarantine (Reason 4);
  5. The employee is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions (Reason 5); or
  6. The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Please note, that, in order to qualify as unable to work, an employer must have work for their employee to do.  If an employer closes due to a lack of business caused by COVID-19, an employee is not entitled to seek leave—the employer has no work for their employee.

EFMLEA

Requires employers to provide 12 weeks of job-protected leave, 10 of which are paid, to workers that are unable to work or telework because they need to care for children due to coronavirus-related school, daycare closures, or caregiver unavailability.

“Children” means those under 18 years old and also is interpreted to include children above 18 years old that are incapable of self-care because of a mental or physical disability.

It is not specified in the Regulations, however, based on its reference to the IRS’s FAQ document, if the child in question is over 14 years of age, but under 18 years of age, “special circumstances” must exist that require the child to be cared for during daylight hours.

Employers should be careful when evaluating “special circumstances” to ensure that policies or approaches taken to evaluate circumstances are not discriminatory.

What Employers are Subject to the FFCRA?

EPSLA

Employers that employ between 1 and 499 employees.

EFMLEA

Employers that employ between 1 and 499 employees.

What Employees are Covered?

EPSLA

All employees, regardless of how long the employee in question has worked for the employer, except employers may exclude healthcare or emergency responders from taking leave.

EFMLEA

Employees who have been on the payroll for 30 calendar days, except employers may exclude healthcare or emergency responders from leave. Leave is also provided to certain laid off and re-hired employees.

Are there Any Exemptions for Small Businesses?

EPSLA

Employers with less than 50 employees can be exempt from providing leave only when leave is requested to provide childcare for a son or daughter/child (Reason 5), and only if granting such leave would jeopardize the viability of their business as a going concern.

This occurs when:

(1) Such leave would cause the employer’s expenses and financial obligations to exceed available revenue, and cause the small employer to cease operating at a minimal capacity;
(2) The absence of the employee or employees requesting leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or
(3) The employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor services are needed to operate at a minimal capacity.

The exemption is not automatic. It is extremely important to document all facts and circumstances related to the denial of a request for leave. Employers must keep any requests and the reasons for denial for four years.

EFMLEA

Employers with less than 50 employees can be exempt if leave payments would jeopardize the viability of their business as a going concern.

This occurs when:

(1) Such leave would cause the employer’s expenses and financial obligations to exceed available revenue, and cause the small employer to cease operating at a minimal capacity;
(2) The absence of the employee or employees requesting leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or
(3) The employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor services are needed to operate at a minimal capacity.

The exemption is not automatic. It is extremely important to document all facts and circumstances related to the denial of a request for leave. Employers must keep any requests and the reasons for denial for four years.

How Much Pay are Employees Entitled to Under the FFCRA?

EPSLA

Limited to $511 per day ($5,110 in the aggregate) when leave is taken for reasons 1 through 3, and 2/3 the regular rate of pay up to $200 per day ($2,000 in the aggregate) when leave is taken for reasons 4 through 6.

This leave time automatically expires December 31, 2020, and cannot be carried over to the following year and an employer does not have to pay a separated employee for unused leave.

Employers may not require employees to use their existing paid leave before they may use the EPSLA leave.

Employers cannot require employees to find a replacement to cover a shift when taking leave.

Employers may terminate an employee’s paid sick time beginning with the employee’s next-scheduled work shift after the employee’s emergency paid sick time ceases.

EFMLEA

Up to 12 weeks of job-protected family and medical leave for the number of hours that would normally be scheduled, 10 of which weeks must be paid, generally at 2/3 the employees’ normal rate up to $200 per day or $10,000 total. The first 10 days (or 2 weeks) of leave are unpaid, but an employee may substitute paid sick leave under the EPSLA or paid leave under the employer’s preexisting policies for these two weeks of unpaid leave.

An eligible employee may elect to use, or an employer may require that an employee use this leave concurrently with any leave offered under the employer’s policies that would be available for the employee to take to care for his or her child, such as vacation or personal leave or paid time off.

This leave time automatically expires December 31, 2020, and cannot be carried over to the following year.

What if an Employee Qualifies for Leave Under the EPSLA and the EMFLEA?

EPSLA

Employees may use EPSLA payments to fill the 10-day unpaid leave period in the EFMLEA to ensure that workers taking EFMLEA leave receive a full 12 weeks’ pay.

EFMLEA

Employees may use EPSLA payments to fill the 10-day unpaid leave period in the EFMLEA to ensure that workers taking EFMLEA leave receive a full 12 weeks’ pay.

What Benefits are Available to Employers to Offset the Cost of Paying Employees During Leave?

EPSLA

The FFCRA provides employers with a refundable tax credit against the employer’s share of Social Security and Medicare Tax (FICA Tax) or excise tax for employers subject to the Railroad Retirement Tax Act (RRTA Tax), as applicable. If the FICA Tax or RRTA Tax owed is insufficient to cover total qualified wages, then the excess qualified wages shall be refunded to the employer. Employers may elect not to have the above provisions apply. The Act provides similar credits against self-employment tax for self-employed individuals.

Please discuss your specific tax questions and accounting practices under the FFCRA with your tax professional.

Information on the tax credits is also available here.

EFMLEA

The FFCRA provides employers with a refundable tax credit against the employer’s share of Social Security and Medicare Tax (FICA Tax) or excise tax for employers subject to the Railroad Retirement Tax Act (RRTA Tax), as applicable. If the FICA Tax or RRTA Tax owed is insufficient to cover total qualified wages, then the excess qualified wages shall be refunded to the employer. Employers may elect not to have the above provisions apply. The Act provides similar credits against self-employment tax for self-employed individuals.

Please discuss your specific tax questions and accounting practices under the FFCRA with your tax professional.

Information on the tax credits is also available here.

What Happens to an Employee’s Job After Leave?

EPSLA

Employers with 25 or more employees: An employee is entitled to be restored to the same or an equivalent position upon return, unless the employee would have been impacted by employment actions, like layoffs, that would have occurred whether or not leave was taken. The burden will be on the employer to demonstrate this.

Employers with fewer than 25 employees: The employer does not have to restore employment and is not subject to the above if the following conditions are met:

(1) The employee took leave to care for their child/son or daughter whose school or childcare was unavailable;
(2) The position no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by public health emergency during the period of the employee’s leave;
(3) The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
(4) If the reasonable efforts fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position comes available. This period is one year.

EFMLEA

Employers with 25 or more employees: An employee is entitled to be restored to the same or an equivalent position upon return, unless the employee would have been impacted by employment actions, like layoffs, that would have occurred whether or not leave was taken. The burden will be on the employer to demonstrate this.

Employers with fewer than 25 employees: The employer does not have to restore employment and is not subject to the above if the following conditions are met:

(1) The employee took leave to care for their child/son or daughter whose school or childcare was unavailable;
(2) The position no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by public health emergency during the period of the employee’s leave;
(3) The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
(4) If the reasonable efforts fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position comes available. This period is one year.

What Kind of Notices Must an Employer Provide of Leave Rights?

EPSLA

Employers need to post a notice in a conspicuous place where employee notices are usually posted that inform employees of their rights.

The model notice created by the Department of Labor is located here.

Employers may also send the notice to employees via email but are not required to. We recommend doing that, however, for teleworking employees to avoid any question during a potential enforcement action that an employer stood in the way with the employees’ rights.

EFMLEA

Employers need to post a notice in a conspicuous place where employee notices are usually posted that inform employees of their rights.

The model notice created by the Department of Labor is located here.

Employers may also send the notice to employees via email but are not required to. We recommend doing that, however, for teleworking employees to avoid any question during a potential enforcement action that an employer stood in the way with the employees’ rights.

What Kind of Notice Must an Employee Provide if they Wish to Take Leave?

EPSLA

An employer can require employees to provide notice and sufficient information for an employer to determine if leave is covered by the FFCRA as soon as practicable after the first workday or portion of a workday for which an employee receives paid sick leave.

Requests for documentation cannot go beyond what the FFCRA allows. All employees are required to provide a signed statement containing the following:

(1) The employee’s name;
(2) The date(s) for which leave is requested;
(3) The COVID-19 qualifying reason for leave; and
(4) A statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason.

Employees also must provide additional documentation, depending on the COVID-19 qualifying reason:

If the request is for Reason 1, an employee must provide the name of the entity that issued the quarantine or isolation order to which the employee is subject.

If the request is for Reason 2, an employee must provide the name of the healthcare provider that advised self-quarantine.

If the request is for Reason 4, an employee must provide either the government entity that issued the quarantine or isolation or to which the individual is subject or the name of the healthcare provider who advised the individual to self-quarantine, depending on the precise reason for quarantine.

If the request is for Reason 5, an employer must provide:

(1) The name and age of the child being cared for;
(2) The name of the school, place of care, or childcare provider that closed or became unavailable due to COVID-19 reasons;
(3) A statement representing that no other suitable person is available to care for the child during the period of requested leave. If an employee fails to give proper notice, the employer should give him or her notice of the failure and an opportunity to provide the required documentation prior to denying the request for leave; and
(4) If the child in question is older than  14 years of age, an explanation of  “special circumstances” requiring the employee to care for that child during daylight hours.

If an employee fails to give proper notice, the employer should give him or her notice of the failure and an opportunity to provide the required documentation prior to denying the request for leave.

EFMLA

An employer can require employees to provide notice and sufficient information for an employer to determine if leave is covered by the FFCRA as soon as practicable after the first workday or portion of a workday for which an employee receives paid sick leave.

Requests for documentation cannot go beyond what the FFCRA allows. Employees must provide a signed statement containing the following:

(1) The employee’s name;
(2) The date(s) for which leave is requested;
(3) The COVID-19 qualifying reason for leave; and
(4) A statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason.

Additionally, all employees are required to provide:

(1) The name of the child being cared for;
(2) The name of the school, place of care, or childcare provider that closed or became unavailable due to COVID-19 reasons; and
(3) A statement representing that no other suitable person is available to care for the child during the period of requested leave.
(4) If the child in question is older than 14 years of age, an explanation of  “special circumstances” requiring the employee to care for that child during daylight hours.

If an employee fails to give proper notice, the employer should give him or her notice of the failure and an opportunity to provide the required documentation prior to denying the request for leave.

What are the Penalties if an Employer Violates the FFCRA?

EPSLA

Employers that violate the requirements of the EPSLA or who discharge, discipline, or discriminate against employees that seek sick leave, take sick leave, or initiate a proceeding related to the same, will be held liable for damages equal to the federal minimum wage for each hour denied, an additional equal amount as liquidated damages, and an amount for costs and reasonable attorneys’ fees. If there are repeated or willful violations, employers can also be subject to a civil fine for each violation in addition to the forgoing.

EFMLEA

Employers that violate the requirements of EFMLEA or who discharge, discipline, or discriminate against employees that seek leave, take leave, or initiate a proceeding related to the same, can receive the same penalties available under the FMLA. These may include back pay, lost front pay, liquidated damages, emotional distress and punitive damages, and attorneys’ fees and costs.

How is the FFCRA Enforced?

EPSLA

An employee can initiate enforcement in federal or state courts with competent jurisdiction.

Complaints for violations of the EPSLA and/or the EFMLEA can be filed with the Secretary of the Department of Labor, who has the power to investigate and bring an action against noncompliant employers.

EFMLEA

An employee can only initiate an action against an employer that is subject to the FMLA.

Complaints for violations of the EPSLA and/or the EFMLEA can be filed with the Secretary of the Department of Labor, who has the power to investigate and bring an action against employers for their violations