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Posts Tagged ‘Families First Coronavirus Response Act’

U.S. Department of Labor Issues Temporary Regulations for Families First Coronavirus Response Act

Posted on: April 8th, 2020

By: Catherine Scott, Natalie Pulley and Gregory Blueford

On April 6, 2020, U.S. Department of Labor (“DOL”) published its most comprehensive interpretation of the paid leave provisions of the Families First Coronavirus Response Act (the “FFCRA”). These temporary regulations expand on the additional guidance provided by the DOL, which our firm previously discussed here.

Key highlights of the temporary rule include:

EMERGENCY PAID SICK LEAVE ACT (“EPSLA’)

  • How to Calculate Entitlement to Paid Sick Leave

Full-Time Employees: Full time employees are entitled to 80 hours of paid sick leave. Employees with varying schedules should take the weekly average of six-months of their employment or the average since their start date (whichever time period is less) prior to the date on which leave is requested to determine if employee is a full-time employee. An individual employee is limited to a maximum of two weeks under the EPSLA (even if this employee changes jobs in a calendar year).

Part-Time Employees:  A part-time employee, scheduled to work fewer than 40 hours per week, is typically entitled to paid sick leave equal to the number of hours he or she is scheduled to work over a two-workweek period. For a part-time employee with a varying schedule who has worked at least 6 months with the employer, the employee is owed fourteen times (14x) the average number of hours the employee was scheduled to work per calendar day over the six month period ending on the date on which the employee takes paid sick leave. An employer may also use twice the number of hours that an employee was scheduled to work per workweek, on average, over the six-month period.

If the employee has been employed for less than 6 months, the employee is entitled to fourteen times (14x) the expected number of hours the employee and employer agreed to at the time of hiring that the employee would work, on average, each calendar day. In the absence of an agreement, a part-time employee with a varying schedule who has been employed for less than six months is entitled to fourteen times (14x) the average number of hours per calendar day that the employee was scheduled to work over the entire period of employment, including hours for which the employee took leave of any type.

  • Six Qualifying Reasons Employees Are Entitled to Emergency Paid Sick Leave (“EPSLA”)

Reason #1:  Subject to Federal, State or Local Quarantine or Isolation Order.  If an employee is unable to work or telework because he or she is subject to a COVID-19 quarantine or isolation governmental order (including the now well-known “Stay-in-Shelter” and “Shelter-in-Place” Orders), the key consideration is whether the employee would be able to work or telework “but for” the quarantine or isolation order.   For example, an employee who is subject to a Stay-in-Shelter Order, but whose worksite is closed because of a Stay-in-Shelter Order (even the same one), would not qualify for EPSLA leave.  If, on the other hand, an employee’s worksite is open, but the employee cannot go into the worksite because of a Stay-in-Shelter Order, then the employee would be eligible under this category of the EPSLA.  Also, an employee permitted to telework would not qualify for paid leave under the EPSLA.

Reason #2: Healthcare Provider Advises Employee to Self-Quarantine for COVID-19. Advice to self-quarantine must be based on the health care provider’s belief that the employee has, may have or is particularly vulnerable to COVID-19.

Reason #3: Employee is Experiencing COVID-19 Symptoms and is Seeking Medical Diagnosis. This is limited to the time the employee is unable to work because he or she is taking affirmative steps to obtain a medical diagnosis. Note, the employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis.

Reason #4: Employee Caring For Another. An employee may be eligible under the EPSLA because: (a) they need to care for an individual who is subject to quarantine or isolation order (the individual must be an immediate family member, roommate, or similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person) and, but for that order, the employee would be able to work; or (b) the employee’s family member has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.

Reason #5: Unable to Work Due to Childcare. This applies if an employee is unable to work because the employee needs to care for his or her son or daughter because: (a) the child’s school or place of care has closed; or (b) the childcare provider is unavailable, due to COVID-19 related reasons. This will apply only when the employee needs to, and actually is, caring for his or her child (and another suitable individual such as a co-parent, co-guardian, or the usual childcare provider cannot). The definition of “son or daughter” includes children under 18 years of age or 18 years of age or older and incapable of self-care because of a mental or physical disability.

Reason 6: Catch-All for Unknown Future Considerations. An employee is unable to work because the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT (“EFMLEA”)

The DOL clarified that the first two weeks of unpaid leave are defined as 14 calendar days and not 10 workdays.

The DOL also provided calculations for the rate of pay for employees, again differing between employees with “normal schedules” and those with variable schedules.

  • Normal (i.e. Routine) Workweek Pay: Two-thirds (2/3) of an employee’s full regular rate of pay times the number of hours the employee would normally be scheduled to work that day;
  • Variable Schedule (6+ Months Work): Average number of hours the employee was scheduled per day over the six-month period ending on the date on which the employee takes such leave, including hours for which the employee took leave of any type; and
  • Variable Schedule (Less Than 6 Months Work): The reasonable expectation of the average number of hours per day that the employee would normally be scheduled to work at time of hire. Absent an agreement, employer should use the average number of hours per workday that the employee was scheduled to work over the entire period of employment, including hours for which the employee took leave of any type.

Nevertheless, all employees are due up to a maximum of $200 per day or $10,000 in total for the additional ten workweeks.

LEAVE TO CARE FOR A CHILD DUE TO SCHOOL OR PLACE OF CARE CLOSURE OR CHILD CARE UNAVAILABILITY: INTERSECTION OF EPSLA, EFMLEA AND FMLA

Both the EPLSA and the EFMLEA permit an employee to take paid leave when needed to care for his or her son or daughter whose school or place of care is closed, or childcare provider is unavailable due to COVID-19 reasons. Where an employee qualifies under both Acts, the employee may take paid leave under the EPSLA, which would run concurrently with any leave entitlement under the EFMLEA. Employers cannot, however, force employees to use paid EPSLA in lieu of unpaid EFMLEA.

Where an employee has already taken FMLA leave in the current 12-month leave year as defined by the employer, the maximum 12 weeks of EFMLEA leave is reduced by the amount of FMLA leave entitlement taken in that year. Therefore, if an employee has taken 12 weeks of FMLA leave in the calendar year as defined by the employer and prior to April 1, 2020, then the employee is not entitled to any EFMLEA leave.  However, even if an employee has already used his or her 12 weeks of FMLA leave, he or she may still take EPSLA leave for COVID-19 qualifying reasons. If an employee first takes leave under the EPSLA for a different qualifying reason, it does not prevent an employee from later taking EFMLEA (only the first two weeks will be unpaid.)

Employees are limited to a total of twelve weeks of leave under the EFMLEA, even if the applicable time period (April 1, 2020, to December 31, 2020) spans two twelve-month leave periods under the FMLA. Employers and employees may agree, where federal or state law permits, to have employee’s accrued, unused paid leave supplement pay under the EFMLEA so the employee receives the full amount of his or her pay. For example, an eligible employee and employer may agree to supplement the EFMLEA by substituting one-third hour of accrued vacation leave for each hour of EFMLEA.

NOTICE REQUIREMENTS

  •  Employer Notice Requirements

The FFCRA requires employers keep posted in a conspicuous place where employees or job applicants at a worksite may view it a notice of the law’s requirements, which can be downloaded, free of charge, from the WHD website at https://www.dol.gov/whd. The DOL has not adopted employer notice requirements or employer-specific notice obligations that are adopted in the FMLA regulations. However, the DOL suggests that employers should apply their FMLA practices to EFMLEA leave users if possible.

  •  Employee’s Notice Requirements

An employee must provide his or her employer documentation in support of paid sick leave or expanded family and medical leave. Such documentation must include a signed statement containing the following information: (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.

  • Under Reason #1, the employee must also provide the name of the government entity that issued the quarantine or isolation order to which the employee is subject.
  • Under Reason #2, the employee must also provide the name of the health care provider who advised him or her to self-quarantine for COVID-19 related reasons.
  • Under Reason #3, the normal FMLA certification requirements still apply.
  • Under Reason #4, the employee must also provide either (1) the government entity that issued the quarantine or isolation order to which the individual is subject or (2) the name of the health care provider who advised the individual to self-quarantine, depending on the precise reason for the request.
  • Under Reason #5, the employee must also provide: (1) the name of the child being care for; (2) the name of the school, place of care, or child care 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. The employee must give notice as soon as practicable. If 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 requested leave.

The employer also may request an employee to provide such additional material as needed for the employer to support a request for tax credits pursuant to the FFCRA.

 POST-LEAVE REQUIREMENTS

  • Return to Work

In most instances, an employee is entitled to be restored to the same or an equivalent position upon return from paid sick leave or expanded family and medical leave in the same manner that an employee would be returned to work after FMLA leave. For employers with fewer than 25 employees, the restoration provisions do not apply if all four of the following conditions are met:

(a) The employee took leave to care for his or her son or daughter whose school or place of care was closed or whose childcare provider was unavailable;

(b) The employee’s position no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by a public health emergency (i.e., due to COVID-19 related reasons) during the period of the employee’s leave;

(c) The employer made reasonable efforts to restore the employee to the same or an equivalent position; and

(d) If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position becomes available. The period of time is specified to be one year beginning either on the date the leave related to COVID-19 reasons concludes or the date twelve weeks after the employee’s leave began, whichever is earlier.

  • Recordkeeping

An employer is required to retain all documentation provided pursuant to EPSLA and/or EFMLEA for four years, regardless of whether leave was granted or denied. If an employer denies an employee’s request for leave pursuant to the small business exemption (under 50 employees), the employer must document its authorized officer’s determination that the prerequisite criteria for that exemption are satisfied and retain such documentation for four years.

A more detailed explanation of how Employers may claim tax credits can be found at https://www.irs.gov/forms-pubs/about-form-7200 and https://www.irs.gov/pub/irs-drop/n-20-21.pdf.

  • Prohibited Acts and Enforcement

Under the EPSLA, employers are prohibited from discharging, disciplining, or discriminating against any employee because the employee took paid sick leave, initiated a proceeding under or related to paid leave, or testified or is about to testify in such a proceeding. An employer who violates the paid sick leave requirements is considered to have failed to pay the minimum wage required by section 6 of the FLSA, and an employer who violates the prohibition on discharge, discipline, or discrimination is considered to have violated section 15(a)(3) of the FLSA. However, an employee may not bring a private action against an employer under the EFMLEA if the employer, although subject to the EFMLEA, is not otherwise subject to the FMLA.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include COVID-19’s impact on finances and loans, the FFCRA, the CARES Act and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

U.S. Department of Labor Issues Two Additional Rounds of Guidance in Advance of April 1, 2020, Effective Date for the Families First Coronavirus Response Act

Posted on: April 1st, 2020

By: Robert Young

Over the weekend, the Department of Labor (DOL) Wage and Hour Division (WHD) issued two additional rounds of guidance to help employers navigate issues relating to the Families First Coronavirus Response Act (FFCRA or the Act), as the effective date of the Act rapidly approaches on April 1, 2020. 

The new guidance adds to the DOL’s “Questions and Answers” document it posted last week (we analyzed Q&As 1 – 14 here) and addresses critical questions regarding teleworking, intermittent leave, furloughs and definitions of certain employers/employees in response to the Emergency Family and Medical Leave Expansion Act (FMLEA) and the Emergency Paid Sick Leave Act (EPSLA).

Here are some key highlights:

Teleworking Employees Are Not Entitled to Paid Leave:

  • An employee whose employer allows them to telework his/her normal schedule (even if, for example, the teleworking employee works early in the morning or late at night) is not eligible for leave under the FFCRA unless a COVID-19 qualifying reason prevents them from working that schedule.
  • If an employee cannot telework for a qualifying reason, the employee is entitled to emergency paid sick leave or expanded FMLEA, depending on the qualifying reason. This leave can be taken in any increment, so long as the employer and he employee agree on the amount.

Employees Can Only Take Intermittent Leave to Care for Children:

  • An employee who still is permitted to go into work cannot take intermittent paid sick leave under the EPSLA, except to care for a child whose school or place of care is closed, or whose childcare provider is unavailable, because of COVID-19 related reasons. Even when an employee is taking care of his/her child, intermittent leave can only be taken with the permission of the employer. For any other qualifying reason, the employee must take all their paid sick leave at the same time.
    • For example, if the employer agrees, an employee may take intermittent paid sick leave on Mondays and Wednesdays to care for their child and may return to work at their normal worksite on Tuesdays, Thursdays and Fridays. 
  • Likewise, an employee may take intermittent expanded FMLEA to care for his/her child at home, provided he/she has permission from his/her employer.

Employers Are Not Obligated to Pay FMLEA or EPSLA Leave Following Worksite Closures, Furloughs and Reductions in Employee Hours:

  • If an employer closes a worksite or business prior to or after April 1, 2020 because of a lack of work or in response to a governmental order, then expanded FML or emergency paid sick leave cannot apply once the worksite is closed.
  • Likewise, if an employer furloughs an employee or reduces their hours prior to or after April 1, 2020 because of lack of work or in response to a governmental order, the employee cannot get expanded FML or emergency paid sick leave (unless the employee returns to work and then has a qualifying reason). 
  • If an employer closes its worksite because of lack of work or in response to a governmental order while an employee is already on emergency paid sick leave or extended FMLEA, the employer must pay that employee’s benefits up until the date the worksite closed, at which point the obligation to pay leave benefits ends.

Employees Cannot “Double Dip” FFCRA Leave with Unemployment Benefits or PTO:

  • If an employee is collecting FFRCA paid sick leave or expanded FMLEA, he/she is not eligible for unemployment insurance. However, if the employee’s hours or pay have been reduced, the employee may be eligible for partial benefits depending on the unemployment guidelines in his/her State.
  • If an employee is eligible to take paid sick leave or expanded FMLEA under the FFCRA, as well as paid leave that is already provided by his/her employer, the employee must choose one type of leave to take. The employee cannot simultaneously take both unless the employee is receiving two-thirds of his/her pay under the FFCRA and the employer and employee agree to allow the employee to supplement his/her leave with PTO time in order to receive full pay. 
    • Employers who allow employees to supplement their FFCRA leave should note they will only receive a tax credit for leave they are obligated to pay under the FFCRA.
  • Employees are allowed to continue health insurance while on expanded FML (in the same way they are permitted to under traditional FMLA).

Employees Generally Have a Right to Return to Work After Taking Emergency Paid Sick Leave or Expanded FML:

  • Employers are required to provide the same (or a nearly equivalent) job to an employee who returns to work following leave.
  • Employers are also prohibited from firing, disciplining or otherwise discriminating against an employee because he/she took leave under the FFCRA or because an employee filed a complaint or proceeding regarding taking leave under the FFCRA
  • Employers, however, are permitted to lay off an employee on FFCRA leave, but (similar to a traditional FMLA analysis) the employer must be able to demonstrate it laid an employee off for legitimate business reasons (such as closure of a worksite).

Public Sector Employees Are Generally Covered Under the FFCRA:

  • If an employee works for a public agency or other unit of government, he/she is generally entitled to paid sick leave under the EPSLA, with the exception of health care professionals and emergency responders as described below. 
  • Federal employees are most likely not entitled to expanded FML. However, non-federal public agency employees, such as employees who work for the government of a State, the District of Columbia, a Territory or possession of the United States, a city, a municipality, a township, a county, a parish, or a similar entity, are likely eligible for expanded FML.

Health Care Providers and Emergency Responders Are Generally Excluded from Paid Sick Leave or Expanded FML:

  • As previously reported, the FFCRA provides that employers of health care providers and emergency responders can exempt such employees from the provisions of the FMLEA or the EPSLA.
  • Prior to the DOL Guidance, the open question was the correct definition of “health care providers” and “emergency responders.”
  • The DOL has now clearly answered that question in a broad manner by providing that 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. 
  • Further, the definition of “emergency responders” also is quite broad and includes any employee who is necessary for the transport, care, health care, comfort, and nutrition of COVID-19 patients, or whose services are otherwise needed to limit the spread of COVID-19. Specifically, emergency providers include:
    • Military or national guard members, law enforcement officers, correctional institution personnel, firefighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility.

Small Businesses with Fewer Than 50 Employees May Be Exempt From The FMLEA and the EPSLA:

  • A small business with fewer than 50 employees, including religious and non-profit organizations, can claim this exemption if providing FMLEA or EPSLA leave would:
    • Result in the small business’s expenses and financial obligations exceeding available business revenues and would cause the small business to cease operating at a minimal capacity;
    • Result in a substantial risk to the financial health or operational capabilities of the small business because of its employees’ specialized skills, knowledge of the business, or responsibilities; or  
    • Result in a shortage of employees who are able, willing, qualified and available to perform the labor or services necessary for the small business to operate at a minimal capacity.
  • Importantly, a small business with fewer than 50 employees can only claim this exemption if the employee is seeking FMLEA or EPSLA leave due to a school or place of care closure or childcare provider unavailability for COVID-19 related reasons.

The DOL’s published guidance so far includes a Fact Sheet for EmployersFact Sheet for Employees, the Questions and Answers document described above, as well as required workplace posters for federal and non-federal employers. We will update you if the DOL issues any additional guidance.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include the CARES Act, education claims, law enforcement, the real-world impact of business restrictions, and the viruses’ impact on the construction industry. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.** 

U.S. Department of Labor Issues Guidance on the Families First Coronavirus Response Act Before Legislation Goes into Effect on April 1, 2020

Posted on: March 25th, 2020

By: Robert Young

In the time since the President signed the Families First Coronavirus Response Act (FFCRA or the Act) into law a few days ago, employers have asked many questions about how the new legislation will affect them once it goes into effect. To answer these questions, the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) recently issued its first round of published guidance for employers.

The DOL guidance addresses critical questions employers may face in response to the (i) Emergency Family and Medical Leave (FML) Expansion Act, which adds a basis for FMLA leave related to employees whose children’s schools closed due to an emergency order, and (ii) Emergency Paid Sick Leave Act, which requires emergency paid sick leave for certain COVID-19 related absences, in addition to any PTO that the employer already provides.

DOL Guidance for the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act

In addition to providing a detailed overview of which employers and employees are covered and the duration of leave and calculation of pay under the FFCRA (explained in depth here), the WHD guidance provided answers to several previously unanswered questions. The latest guidance provides as follows:

Effective Date:

  • The FFCRA’s paid leave provisions are effective on April 1, 2020, not April 2, 2020 as previously indicated, and apply to leave taken between April 1, 2020 and December 31, 2020.
  • The FFCRA is not retroactive. Leave eligibility begins April 1, 2020. Therefore, if an employer is currently offering an employee paid sick time due to COVID-19 concerns, these employees would be still be eligible for 80 hours of emergency paid sick leave as of April 1, 2020.

FFCRA Coverage:

  • Covered employees who qualify towards the 500-employee threshold under the FFCRA include:
    • All full-time and part-time employees within the United States, including any State of the United States, the District of Columbia, or any Territory or possession of the United States;
    • Employees on leave;
    • Temporary employees who are jointly employed by the employer and another employer (regardless of which employer maintains the employee’s payroll); and
    • Day laborers supplied by a temporary agency (regardless of whether the employer is the temporary agency itself or the client firm of the temporary agency, as long as there is a continuing employment relationship).
  • For purposes of calculating the 500-employee threshold:
    • The number of employees is determined on the date the employee takes leave.
    • A corporation (including its separate establishments or divisions) is a single employer and its employees must each be counted towards the 500-employee threshold.
    • If two entities are found to be joint employers under the FLSA, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency FML Expansion Act.
    • For purposes of the Emergency FML Expansion Act, if two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave.
    • Independent contractors are not covered for purposes of the 500-employee threshold.
  • Small businesses with fewer than 50 employees will be required to document why they meet certain criteria set forth by the DOL to qualify for an exemption to the FFCRA, which will be established by the DOL in a forthcoming regulation. We will update you when this regulation is published.

Interaction of the Emergency FML Expansion Act and Paid Sick Leave Act:

  • An employee may be eligible for both types of leave, but only for a total of twelve weeks of paid leave.
  • Employees who qualify under the Emergency FML Expansion Act may use 80 hours of paid sick leave under the Emergency Paid Sick Leave Act for the first ten workdays. After the first ten workdays have elapsed, a covered employee will receive 2/3 of his/her regular rate of pay for the hours he/she would have been scheduled to work in the subsequent ten weeks under the Emergency FML Expansion Act.
  • Importantly, an employee can only receive the additional ten weeks of expanded family and medical leave under the Emergency FML Expansion Act for leave to care for a child whose school or place of care is closed or if child care provider is unavailable, due to COVID-19 related reasons.

The published guidance includes a Fact Sheet for Employers (linked here), Fact Sheet for Employees (linked here), and a Questions and Answers document (linked here). The DOL stated it will provide a workplace poster required for most employers later this week, as well as additional facts sheets and guidance. We will update you when the DOL issues this information.

Additional Information: 

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues every day for the next week. We will discuss the impact of Coronavirus for companies in general, but also for business in insurance, healthcare, California specific issues, cybersecurity, and tort. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Labor & Employment, Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients. Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest. As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce educational content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.** 

IRS and DOL Announce Employers Can Take Immediate Advantage of Tax Credit Offsets Under the Families First Coronavirus Response Act

Posted on: March 23rd, 2020

By: Jeffrey A. Hord

On Friday, the Internal Revenue Service and U.S. Department of Labor issued an announcement regarding the timing of reimbursement by the federal government to employers for paid emergency leave and expanded FMLA leave required under the new Families First Coronavirus Response Act (“FFCRA”). This guidance (available here) represents an important step towards providing employers with greater clarity as to how and when their businesses can obtain tax relief relating to the cost of providing Coronavirus-related leave to employees.

As we covered in this Blog last week, the FFCRA requires private employers with fewer than 500 employees to provide paid sick leave and paid family leave for certain individuals impacted by the COVID-19 pandemic. Understandably, small businesses have been extremely anxious about the financial burden of complying with these new requirements, particularly during this time of economic uncertainty and unrest. For this reason, the FFCRA created a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA leave.  As written, however, the FFCRA left unanswered many key questions regarding the process for obtaining these credits, the timing of subsequent reimbursement, and so on.

In Friday’s announcement, the DOL and IRS made clear that employers can begin to “take immediate advantage” of these tax credits by retaining and accessing funds that they would otherwise pay to the IRS in payroll taxes. Here are some of the “key takeaways” highlighted in the announcement:

  • Complete Coverage
    • The tax relief provisions of the FFCRA are intended to provide “dollar-for-dollar,” 100% reimbursement for Coronavirus-related employee leave.
      • Health insurance costs are also included in the credit: the amount of the credit is increased by the employer’s “Qualified Health Plan Expenses” that are allocable to the qualified sick leave wages.
    • Employers face no payroll tax liability.
  • Prompt Recoupment of Employer Costs
    • Employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
      • Payroll taxes available for retention include withheld federal income taxes and both the employer and employee shares of Social Security and Medicare taxes.
    • In other words, any taxes held in escrow for payment on FICA, Social Security and Medicare taxes now could be used to pay employees taking paid leave under the new law.
    • If these retained payroll taxes are not enough to cover the cost of leave paid out to employees, employers will be able file a request for an accelerated payment from the IRS.
      • The turnaround time for such requests is expected to be “two weeks or less.”
  • Relaxed Compliance
    • The Department of Labor is issuing a “temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act.”
      • Under this policy, DOL will not bring an enforcement action against any employer for violations of the FFCRA until May 2, 2020—thirty (30) days after its effective date—so long as the employer has “acted reasonably and in good faith” to comply.
        • According to DOL, “good faith” exists when: (i) violations are remedied and the employee is made whole as soon as practicable by the employer, (ii) the violations were not willful, and (iii) the employer submits a written commitment to comply in the future.
  • Small Business Protection
    • Businesses with fewer than 50 employees are eligible for an exemption from the leave requirements relating to school closings and/or unavailable child care.
      • As with the exemptions set forth in Sections 3102 and 5111 of the FFCRA, the employer must show that compliance would “jeopardize the viability of the business as a going concern”; i.e., the ability of the business to remain open and continue operating.
      • DOL will be providing emergency guidance establishing simple and clear criteria defining the circumstances that will meet the standard of “jeopardy to the viability of an employer’s business as a going concern.”
    • While not referenced in Friday’s announcement, small business (with fewer than 50 employees) are already exempt from civil liability in an FMLA lawsuit relating to the FFCRA’s expanded family leave provisions.[1]

This announcement is sure to give some comfort to employers worried about how they would cover paid leave mandates without knowing when they might be reimbursed for those substantial costs. Cash flow concerns have already caused many businesses to make difficult furlough and termination decisions; hopefully, this guidance will help employers navigate through this unprecedented time.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Labor & Employment, Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

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[1] See Emergency Family and Medical Leave Expansion Act, Section 3104.