NAVIGATING THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA) - - PowerPoint PPT Presentation

NAVIGATING THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA)

Thursday, April 2, 2020 8:15 am PST

Email questions to elizabeth.evans@cu-northwest.com

Guest Speaker

Angela Hayes Senior Legal Counsel

Disclaimer: The opinions herein do not reflect those of CU*NorthWest. CU*NorthWest and its affiliates disclaim any and all liability pertaining to this webinar clip. It is made available as a public service in an effort share information on the ongoing global pandemic with our community.

Host

Mark Mazenko CU*Northwest

EVP, Market Development

Moderator

Terri Johnson CU*Northwest

Marketing

Welcome

Client Owner Advocate

Elizabeth Evans CU*Northwest

Business Development

Professional Experience

• Joined Associated Industries in January 2009.
• Practice area included Civil Litigation, Trust & Estate Dispute

Litigation, Guardianships and Medical Negligence Defense.

• Registered nurse
• Licensed in both Washington and Idaho
• Member of the Washington State Society of Health Care

Attorneys, the American Health Lawyers Association and the American Association of Nurse Attorneys

Guest Speaker

Angela Hayes Senior Legal Counsel

Disclaimer

• Training information is provided for general informational purposes only and is not and should not be

considered legal advice, nor does it establish an attorney client relationship between Associated Industries or its attorneys and any attendee or company.

• Where specific issues arise, attendees should seek legal advice from a licensed employment law

practitioner regarding the particular facts and circumstances of the matter at issue.

• The law changes rapidly and the regulations and interpretative guidance of the FFCRA is under
• development. These materials contain general information only and are current through April 1, 2020.

Agenda

• Brief overview of the FFCRA paid leave provisions
• Emergency Paid Sick Leave Act (EPSL)
• Emergency Family and Medical Leave Expansion Act (EFMLA)
• Key Guidance from the DOL on significant implementation questions
• IRS Guidance for tax credits

OVERVIEW OF FFCRA AND PAID LEAVE PROVISIONS

HR 6201 – Families First Coronavirus Response Act (FFCRA) Timeline

• HR 6201 Introduced on March 11
• Passed by the House on March 14
• “Technical Corrections” introduced on March 17
• Passed by the Senate on March 18
• Signed by President Trump on March 18
• Effective date of April 1, 2020
• Provisions we are discussing today sunset on December 31, 2020

FFCRA Final Law

• Law contains broad range of provisions
• Appropriations
• Nutrition Waivers
• Emergency Family and Medical Leave Expansion Act (EFMLA)
• Emergency Unemployment Insurance Stabilization and Access Act of 2020
• Emergency Paid Sick Leave Act (EPSL)
• Health Provisions
• Tax Credits for Paid Sick and Paid Family Medical Leave
• Budgetary Effects

Recap of Provisions of FFCRA

• EPSL and EFMLA are the two leave provisions of FFCRA
• Covered Employers subject to the paid leave provisions of EPSL and EFMLA :
• Private employers with fewer than 500 employees (throughout US)
• Includes full time, part time, temporary, day labor, employees on leave; NOT

independent contractors

• Employee count that exists at time employee seeks to take leave (so coverage

may change over time as employer grows or shrinks)

• Public agencies of any size
• Federal, state government; political subdivisions; schools
• EPSL and EFMLA sunset on December 31, 2020

EPSL recap

• “Eligible employee”: Full time, part time, temporary, seasonal, staffing company/day laborers

from agencies

• Eligible for EPSL benefits from day one of employment; no other criteria
• Full time employee eligible for up to 80 hours of paid leave for qualifying EPSL reason
• Full time = employee regularly scheduled to work 40 or more hours per week
• Part time employee eligible for the number of hours the employee works, on average, over

a 2-week period

• Part time = any employee who is not “full time”
• Variable work schedule – calculate average number of hours per day over 6-month period
• EPSL does not carry over (sunsets on 12/31/20); not paid out on separation

6 qualifying reasons for EPSL

Employee is unable to work or telework for one of the following reasons:

• 1. Employee is subject to a gvt. quarantine or isolation order related to COVID19

(includes “shelter in place” orders)

• 2. Employee is advised by health care provider to self-quarantine because of COVID19
• 3. Employee experiencing symptoms of COVID19 and is seeking a medical diagnosis
• 4. Employee is caring for an individual subject to gvt quarantine order or advised by health

care provider to self-quarantine due to concerns related to COVID 19

• 5. Employee is caring for a son/daughter under age 18 whose school or place of care is closed,
• r childcare provider is unavailable, due to COVID19 precaution
• 6. The employee is experiencing substantially similar conditions as specified by the Secretary
• f Health and Human Services (catch all provision)

EPSL payment

• Leave taken for EPSL Reasons 1/2/3: 100% of regular rate or pay; max $511 per day

($5110 total)

• Leave taken for EPSL Reasons 4/5/6: Two-thirds of employee’s regular rate of pay, max

$200 per day ($2000 in total)

• Regular rate of pay = incudes commissions and piece rate compensation; tips included in

calculation too if employer takes a tip credit toward payment of minimum wage for FLSA tipped employees (no tip credit in WA, so tips are not included in the regular rate calculation)

• Employer must pay employee for hours the employee would normally have been

scheduled to work – including OT (i.e., if employee scheduled to work 50 hours in a week, employee’s EPSL would be 50 hours for that week, but OT premium not included in regular rate calculation)

Use of EPSL leave; interaction with

• ther leave
• Employer MUST allow employee to use EPSL leave first if desired
• Employer cannot require employee to use accrued leave under an employer-

provided policy first

• Leave that an employer provided before April 1st does not count against EPSL

requirements or entitlements

• Leave/leave payments provided to an employee prior to April 1, are not eligible for

federal tax credit

EFMLA Recap

• Which employers are covered?
• A private employer with fewer than 500 employees (“snapshot in time”)
• “20 or more calendar weeks” provision of “classic” FMLA does not apply
• No 75-mile requirement for EFMLA
• A public agency of any size (state/fed gvt.; schools; political subdivisions)
• Which employees are eligible?
• Any full-time or part-time employee that has been on the employer’s payroll for

30 calendar days prior to the need for leave

• The “classic” FMLA eligibility criteria [12 months/1250 hours/75-mile

requirements] DO NOT APPLY to this EFMLA qualifying reason

• “Classic” FMLA employers may be dealing with 2 different eligibility criteria

EFMLA Single qualifying reason

• SINGLE QUALIFYING REASON FOR EFMLA:
• When the employee is unable to work or telework due to the need to care for

employee’s son or daughter under age 18 whose school or place of care has been closed or the childcare provider of such son or daughter is unavailable, due to a public health emergency specifically relating to COVID 19.

• DOL interpretive guidance clarified that “child” (under both EPSL and EFMLA) also includes

a child 18 years or older with a mental or physical disability who is incapable of self care due to the disability.

• EFMLA may overlap with EPSL reason #5
• Employee may (but is not required to) use available EPSL for income during first 2

weeks of unpaid EFMLA

EFMLA payment provisions

• Employee entitled to up to 12 weeks for EFMLA (minus any other FMLA leave time the

employee has already taken in their leave year)

• Weeks 1-2 are unpaid (unless receiving payment under different source, such as EPSL
• r employer-provided benefit like PTO);
• Weeks 3-12 are paid at 2/3 employee regular rate of pay for the number of hours

the employee typically works each week; capped at $200 per day, $10,000 total

• EFMLA does not provide additional weeks of FMLA leave – it provides an additional

qualifying reason for leave and broadens the scope of employers who are covered by the emergency provisions.

• Health insurance to continue during leave on same terms and conditions

Job protection and restoration

• Employee is entitled to return to the same or equivalent position they held at the time

leave commenced

• Job restoration also required with EPSL
• Employers with fewer than 25 employees may be excused from job restoration

requirements where employee takes leave due to school closure/child-care needs if all the following are met:

• Employee’s position no longer exists following leave due to operational changes

caused by public health emergency;

• Employer has made reasonable efforts to restore employee to an equivalent position at

end of leave; and

• Employer makes “reasonable efforts” to contact a displaced employee for up to one

year after displacement if an equivalent position becomes available

DOL ISSUES GUIDANCE

Small Business Exemption guidance

• DOL has clarified the small business exemption from EFMLA and EPSL #5 (FAQ 58-59)

: Small employers (>50) including non-profits and religious organizations may claim an exemption from EFMLA and EPSL #5 obligations if the employer’s authorized

• fficer determines that one of the following applies:
• Providing EFMLA and EPSL #5 would cause the business’s expenses and financial
• bligations to exceed its revenues and cause the business to cease operating at a

minimal capacity;

• The employee’s absence would entail a substantial risk to the business’s financial

health or operational capabilities b/c of specialized skills, knowledge, or responsibilities; OR

Small Business Exemption, cont.

• There are insufficient workers who are able, willing and qualified to perform the

labor or services provided by the employee(s) requesting child-care leave and these labor or services are needed for the business to operate at a minimal capacity.

• CAVEAT: The exemption applies ONLY to EFMLA and EPSL #5 (school

closure/childcare needs). Small employers are not exempt from providing EPSL for reasons 1,2,3,4 and 6.

• Employers should document the reasons why their business meets the criteria. Per

earlier DOL guidance, documentation should NOT be sent to DOL – suggesting there is no formal application process but that employers may be subject to compliance reviews after the fact.

Closed worksite, furlough, reduced work hours

• DOL provides guidance on leave entitlement when workplace is closed, employees are

furloughed, or hours reduced (DOL FAQ #23-28):

• If worksite closed (for lack of business or due to public order) or employee is laid
• ff/furloughed at any time before or after April 1st, employee is not entitled to

EPSL or EFMLA, but may be eligible for unemployment benefits

• If employee is on EPSL or EFMLA and the worksite closes the employer must pay

for leave taken up to date of closing but as of the date of closure, the employee is no longer entitled to EPSL or EFMLA. Employee may thereafter be eligible for unemployment.

• If employee’s hours are reduced while on leave, the employee is not entitled to

paid benefits for the missed/reduced work hours

Documentation clarified, or not?

• As general rule, employers should request documentation for an employee’s paid leave

request (EPSL or EFMLA) if employer intends to claim the tax credit

• Unfortunately, DOL eliminated much of its previous guidance/discussion concerning the

specific type of documentation to support a paid leave request

• Most recent guidance (FAQ 15-16) directs employers to “retain appropriate documents”

and “consult IRS forms instructions and information for the procedures to follow to claim the tax credit.”

• IRS issued its own guidance late on 3/31/20 discussed later in webinar
• Employer is not required to provide leave if “materials sufficient to support the

applicable tax credit have not been provided”

Documentation, cont.

• DOL does provide guidance with respect to documentation for EFMLA (school

closure/child care leave):

• Employer may ask employee requesting EFMLA leave to provide additional

documentation (beyond any required IRS documentation) such as notice of closure posted on government site, day care website, newspaper notice, email notice from school or daycare official re closure

• Employer should retain this documentation in support of employees EFMLA leave

request

• Other legal resources and dependable analysis suggest that for EPSL leave taken for

medically necessary reasons for COVID19, employers may still request appropriate supporting documentation – but may need to relax usual documentation standards given the practicalities of the current situation

To telework, or not telework…..

• DOL clarifies that an employee is able to telework under the FFCRA when the employer

permits or allows employee to perform work while at home or other location other than normal workplace. (DOL FAQ #17). If the employee is able to telework, the employee is not entitled to EPSL or EFMLA.

• “Unable to work or telework” on the other hand means the employer has work for the

employee, but the employee is prevented from doing that work due to a COVID 19 qualifying reason - employee may be entitled to paid leave (DOL FAQ #18)

• If employer/employee agree employee will work normal number of hours but outside

regular schedule the employee is able to work and leave isn’t necessary unless employee otherwise prevented from working the schedule due to a COVID 19 reason.

Increments of leave

• DOL’s default stance is that under EPSL or EFMLA, leave must be taken in full day

increments (DOL FAQ #21). Once the employee starts taking paid leave under EPSL or EFMLA, the employee must continue to take paid sick leave each day until the employee either 1) uses their full amount of paid sick leave; or 2) no longer has a qualifying reason to take paid sick leave.

• The motivation behind the full day increment requirement is based on the intent of

the paid leave provisions, which is to provide “such paid sick leave as necessary to keep the employee from spreading the virus to others.”

• If the employee no longer has a qualifying reason for taking paid sick leave, and has

paid leave remaining, they can use the remainder for another qualifying event until 12/31/20.

Intermittent leave

• A telework employee may take intermittent leave under EPSL or EFMLA in any increment

as long as the employer and employee agree. (DOL FAQ #20)

• For work at the employee’s usual worksite, the availability of intermittent leave is more

limited (DOL FAQ #21-22)

• Intermittent leave is available, if both the employer and employee agree, for both EPSL

and EFMLA but only when the employee’s need for leave is due to child’s school or daycare closure. Presumably intermittent leave for this need could be taken in any increment, upon agreement by employer and employee.

• Intermittent leave is NOT available if the employee is in need of leave because the

employee (or family member/individual) is under quarantine, experiencing symptoms and seeking diagnosis (reasons 1,2,3,4 or 6)

Coordination with other benefits and topping off

• If an employer offers paid leave benefits (such as vacation, PTO, sick leave) the

employee gets to choose which benefits to use (employer-provided benefit vs FFCRA benefit) and in what order.

• The employer-provided benefits and FFCRA benefits cannot be used concurrently

UNLESS the employer allows the employee to supplement or “top off” their FFCRCA benefits, up to the employee’s normal earnings.

• If topping off is permitted by the employer, it is then up to the employee whether to

do so (cannot be compelled)

• If an employer elects to pay more than the amount required under the FFCRA, the

employer will not receive a tax credit for excess amounts paid.

• See DOL FAQ #31-34

IRS Guidance

• IRS published guidance and an FAQ document on 3/31/20 which outlines the

documentation that an employer can require to substantiate employee’s request for leave, and documents an employer must maintain to claim tax credits for EPSL and EFMLA payments

• IRS also takes the position that only one caretaker can take leave to care for a child

whose school or daycare is closed.

• If the child is over 14 years old, the employee must also explain special circumstances

which require the employee to provide care

• If the employee cannot identify or explain special circumstances requiring employee

to provide care to the child over 14, the employee cannot take EPSL or EFMLA

IRS guidance - documentation

• Employee’s request for paid leave starts with the employee’s written request which

must include:

• Employee’s name
• Date or dates for which leave is requested
• Statement of the COVID19-related reason employee is requesting leave and the

written support for such reason; and

• Statement that the employee is unable to work, including telework, for such

reason

• In case of Quarantine, employee’s statement should provide:
• Name of gvt entity ordering quarantine or name of health care provider advising

self-quarantine; and

• Name of person subject to quarantine/self quarantine and relation to e/ee

IRS guidance – documentation, cont.

• In case of child’s school or daycare closure, or care provider unavailable, due to COVID19,

employee’s statement must provide:

• Name and age of child/children to be cared for;
• Name of school that has closed or place of care that is unavailable;
• A representation that no other person will be providing care for the child during the

period for which the employee is receiving family medical leave;

• With respect to employee’s inability to work or telework due to need to care for a child
• lder than 14 during daylight hours, a statement that special circumstances exist

requiring the employee to provide care

• IRS takes position that employee alone must provide care, making it clear that leave is

unavailable if both parents or another individual is present to provide care

IRS guidance – documentation, cont.

• To claim tax credits, employer will need to create and maintain records with the

following information:

• Documentation to show how the e/er determined amount of qualified sick and

family leave wages paid to e/ees that are eligible for the credit, including records

• f work, telework, and qualified sick leave
• Documentation to show how the e/er determined the amount of qualified health

plan expenses that the employer allocated to wages (See IRS FAQ #31 for methods to compute this allocation)

• Copies of any completed Forms 7200, Advance of Employer Credits due to COVID

19, that the employer submitted to the IRS

• Copies of the completed Form 941, E/er’s quarterly Federal Tax Return, that the

e/er submitted to the IRS (or records submitted to 3rd party payer)

IRS guidance – Misc.

• Employer should retain all records of employment taxes for at least four years after the

date the tax becomes due or is paid, whoever comes later.

• Records should be available for IRS to review
• Benefit amounts paid to employee under EPSL and/or EFMLA are considered taxable

wages

• Outstanding question as to whether the FFCRA benefits are subject to premium

deductions for state PFML and whether they should be reported to the state as “wages paid and hours worked” on the employer’s quarterly report

Resource documents

DOL Resource document – FAQs on FFCRA (currently numbering 1-59, but the document is being added to frequently) https://www.dol.gov/agencies/whd/pandemic/ffcra-questions IRS Resource document – FAQs on Tax Credits for COVID 19 leave https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave- provided-by-small-and-midsize-businesses-faqs IRS Press Release on Tax Credits for FFCRA Paid Leave https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement- coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize- businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

Q&A

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Disclaimer: The opinions herein do not reflect those of CU*NorthWest. CU*NorthWest and its affiliates disclaim any and all liability pertaining to this webinar clip. It is made available as a public service in an effort share information on the ongoing global pandemic with our community.