On April 1, the DOL provided employers with further clarity on the FFCRA by publishing temporary regulations. These regulations will be effective from April 1, 2020, until December 31, 2020—the same effective period of the FFCRA. Also relevant to employers, the IRS issued guidance regarding the FFCRA tax credit. As with our other alerts on the FFCRA, the following highlights key aspects of the new regulations:
Not All Employees Subject to Stay-At-Home Orders Are Entitled to Paid Sick Leave
The temporary rule provides some insight as to whether employees covered by federal, state or local governmental “stay at home” or “shelter in place” type orders are entitled to 80 hours of paid sick leave. The answer may vary based on the facts. The law provides that employees who are “subject to a quarantine or isolation order” are entitled to paid sick leave. The temporary rule defines “subject to a quarantine or isolation order” to include Federal, State, or local quarantine, isolation, shelter-in-place, or stay-at-home orders, but only if these orders cause the employee to be unable to work even though their employer has work that the employee could otherwise perform. In other words, if the employer would have no work for the employee even without the stay-at-home order (for example, a coffee shop that has closed due to lack of business), the employee is not entitled to paid leave under the FFCRA. On the other hand, if the employer does have work and the only thing preventing the employee from working is the stay-at-home order, the employee is entitled to paid sick leave. Further, for employees who work in industries deemed “essential,” employees would likely not qualify for paid sick leave even though they are subject to a stay at home order. In this scenario, because such employees work in “essential” industries, they are not precluded from coming to work due to such stay at home orders.
Employees Seeking a Medical Diagnosis for COVID-19 Can Only Take Paid Sick Leave for Time Spent Affirmatively Seeking Such Diagnosis
Another qualifying reason for paid sick leave is if the employee is “seeking a medical diagnosis for COVID-19.” The temporary regulations make it clear that the paid sick leave taken for this reason is limited to the time the employee is unable to work because they are “taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.” The employee must be experiencing any of the following symptoms: fever; dry cough; shortness of breath; or other CDC identified symptoms. If the employee is then diagnosed with COVID-19, then further paid sick leave would be available if the advice by the employee’s health care provider is to self-quarantine. (Some local health orders may require FFCRA paid sick time for those with COVID-19 symptoms to self-quarantine or isolate.)
Laying Off Employees Does Not Necessarily Restart the Clock When Calculating 30 Days of Employment for Expanded Family and Medical Leave Eligibility
All employees of covered employers are eligible for paid sick leave under the Act, but in order to be eligible for expanded family and medical leave, an employee must have been employed for 30 days. The regulations provide guidance as to how to calculate that 30-day requirement. The simple case is where the employee has been on the payroll for at least 30 calendar days prior to the day the requested leave would begin—that employee is eligible for expanded family and medical leave. The more complicated case is if an employee is laid off or otherwise terminated after March 1, 2020, and reemployed by the employer on or before December 31, 2020. That employee is eligible for expanded family and medical leave, but only if the employee was on the employer’s payroll for 30 of the 60 days prior to being laid off or terminated.
Employees Can Only Take Intermittent Leaves if Both the Employee and the Employer Agree
The regulations make it abundantly clear that intermittent leave under the FFCRA can only be taken if both the employer and the employee agree. The agreement does not have to be in writing, but as a best practice, it would not hurt for an employer to keep documentation of the agreement. Further, if the employee is reporting to a worksite (as opposed to teleworking), the employee may only take intermittent leave to care for a child whose school is closed or whose child care provider is unavailable. For leaves under the other qualifying reasons, intermittent leave is not available. (Leave for child care is only available “if no suitable person [to provide the care] is available.”) Teleworking employees may take intermittent leave for any of the six qualifying reasons, assuming there is an agreement between employee and employer.
Employees Must Provide Employers With Requested Documentation in Order to Receive Leave
An employee must provide the employer with enough documentation to justify a paid FFCRA leave or else the employee is not entitled to leave; such documentation is needed for the employer to claim the payroll tax credit to recover the cost of the leave. What must be included in this documentation will vary slightly based on why the employee is taking leave, but all employees must provide documentation with their name, the date(s) they are requesting leave, the qualified reason for the leave, and a statement that the employee is unable to work because of the qualified reason. Based on the qualifying reason, the employee must also provide the following:
- “The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.” – The employee must provide the employer with the name of the government entity that issued the order.
- “The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.” – The employee must provide the employer with the name of the health care provider that advised the self-quarantine.
The employee is caring for an individual subject to a government quarantine or isolation order or who was instructed to self-quarantine by a health care provider. – The employee must provide the employer with either the name of the government entity that issued the order or the name of the health care provider who advised the individual to self-quarantine.
The employee is caring for their son or daughter whose school or place of care has been closed. – The employee must provide (1) the name of the child being cared for, (2) the name of the school, place of care, or child care provider that has closed or become unavailable, and (3) a representation that no other suitable person will be caring for the child while the employee takes paid sick leave or expanded family and medical leave. If the child is older than 14, the IRS guidance provides that the employer should request a statement that special circumstances exist requiring the employee to provide care.
The employer may also request any additional information necessary to support the employer’s request for a tax credit. If the employee does not provide the employer with enough information to request the tax credit, the employer does not have to provide the leave. The IRS guidance provides that an employer needs to retain the following documentation to support a request for the tax credit:
- Documentation demonstrating how the employer determined the amount of paid sick leave and expanded family and medical leave wages paid to eligible employees including records of any work or telework.
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
- 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 Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS.
- The IRS recommends keeping all records of employment taxes for four years after the tax becomes due or is paid, whichever is later.
- The IRS Provides Guidance for How to Pay for Leaves and Receive the Tax Credit
For employers wondering how they will pay for these leaves, the IRS guidance has some answers. The IRS instructs employers to access federal employment taxes related to wages paid between April 1, 2020, and December 31, 2020, that would normally be deposited with the IRS to help fund the paid leaves. The IRS states that Form 941 will have instructions on how to reflect these reduced amounts. In the case that these employment taxes do not cover the amount of the leaves, employers may complete Form 7200, Advance Payment of Employer Credits Due to COVID-19. The IRS expects to begin processing these forms this month.
The IRS Provides Guidance on EFMLEA Leave Taken for Children Over Age 14
While EFMLEA is available for employees who need to stay home (and cannot telework) due to their minor children’s school or daycare closings related to the coronavirus, the IRS requires documentary support of the need for the leave. In general, there must be a formal “representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave,” and, with respect to the employee’s inability to work or telework because of a need to “provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.”
Even with all of the new guidance from the government, questions remain and even more are triggered. For assistance in navigating these guidelines and now regulations, and to address related questions, contact any of the attorneys in Dykema’s Labor and Employment Practice Group.