DOL DOES AN ABOUT-FACE ON SMALL BUSINESS EXEMPTIONS UNDER THE FFCRA

Families First Coronavirus Response Act 

DOL DOES AN ABOUT-FACE ON SMALL BUSINESS EXEMPTIONS UNDER THE FFCRA

 

Last Updated:  March 30, 2020

The Federal DOL has been publishing updates on the FFCRA in the form of Q&As on their website, pending formal regulations that we are told will be published in April. Please refer back to our previous articles:  Urgent HR Law COVID-19 Update 3/19/20 and Mandatory Notice for Employees as of 3/25/20  for the basic information.

As a reminder, the FFCRA provides for a number of relief actions that directly impact employers and employees:

  • Expanded Family and Medical Leave – which provides for a new type of paid FMLA leave.
  • Emergency Paid Sick Leave – which provides for a new type of paid sick days benefit.

This update will focus on the areas clarified by the DOL that have been the most confusing for employers.

Effective Dates – The law goes into effect on April 1, 2020 and does not apply retroactively. Employees who experienced a job loss or loss of wages and hours prior to this date (layoff or furlough) would not be eligible for FFCRA as the law requires being currently employed on the date it becomes effective.

 Exemptions

  • Employers with Fewer than 50 Employees who can establish that compliance would jeopardize the viability of the business can be exempt from the FFCRA but ONLY for Paid Sick Leave or Extended Family Medical Leave for employees requesting time off due to the unavailability of children’s schools or childcare. This is a huge and surprising clarification from the DOL and means that no employers are exempt from providing Paid Sick Leave for employees with a COVID-19 related illness or quarantine for themselves or family members.

To claim this exemption, an authorized officer of the company would need to establish that:

  • Providing the FFCRA paid time off would cause the business’s expenses and financial obligations to exceed available revenues and cause the company to cease operating at minimal capacity; OR
  • The absence of the employee(s) asking for FFCRA paid time off would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; OR
  • There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee(s) requesting FFCRA paid time off, and these labor or services are needed for the business to operate at a minimal capacity.
  • Emergency Responders and Health Care Providers do not have to be provided FFCRA paid time off. For details about which types of employees would meet these definitions, see the DOL’s Q&As.

Business Closures – For any businesses that close prior to 4/1/20 due to “lack of work” or because the business “was required to close pursuant to a Federal, State, or local directive,” impacted employees would not be eligible for FFCRA paid time. For businesses that close after that date, employees would need to be paid for any FFCRA paid time to which they were entitled prior to the closure but not after. While still not 100% clear, this language appears to suggest that employees who are sent home and unable to telework due to a “Stay at Home” order or other similar directive would not qualify for FFCRA paid time off.

Furloughs – If employees are furloughed, they are not eligible for FFCRA paid time during their hiatus from work. Should they return to work, they would again be eligible.

Reduced Work Hours – If employees’ work hours are reduced due to lack of work, they are not eligible for FFCRA paid time because they are not prevented from working due to a COVID-19 qualifying reason, even if the reduction in hours is related to COVID-19. However, if employees need to work a reduced schedule due to one of the qualifying reasons, the amount of paid time off to which they would be entitled would be calculated based on their work schedule prior to the hours being reduced.

Recordkeeping and Notices

  • Employers who will be seeking reimbursement for these paid benefits through refundable tax credits should keep track of exactly what is paid to employees and will be provided additional instructions from the IRS. Our recommendation is to create distinct earning codes in your payroll system so that any FFCRA paid time does not get commingled with other paid leave offered by the employer such as PTO or other paid sick days.
  • Employees who take Expanded Family and Medical Leave to care for children can be required to provide documentation attesting to the fact that school or childcare is unavailable to due COVID-19. Such documentation could include notices, emails, texts, or even newspaper or online publishing from the school or day care.
  • For all other leaves under FMLA, the existing notice and certification requirements remain unchanged.

Teleworking – If employees are permitted to telework during the pandemic and are paid their normal wages, they are not eligible for FFCRA paid time. If during teleworking they become unable to work, paid time off would be available as long the inability to work meets one of the qualifying reasons under the law.

Intermittent Work while Teleworking – Employees can use FFCRA paid time intermittently if they are not able to work their full schedule due to a qualifying reason as long as the employer agrees. Employers are allowed to determine the increments in which the FFCRA paid time may be taken and are being encouraged to be as flexible as possible.

Intermittent Work while Working at the Regular Job Site – Paid Sick Leave for those working at their regular job sites must be taken in full-day increments if the leave is needed due to the employee being quarantined, having been advised to self -quarantine, is experiencing COVID-19 symptoms, or is caring for another who is in one of these situations. The employee would need to take Paid Sick Leave either until the full amount of leave has been used or the qualifying reason to take leave no longer exists. If the full amount of leave is not taken, it can be used again for another qualifying reason prior to 12/31/20. For example, if an employee needs to take 5 days off due to a personal quarantine order and is then medically released to return to work, he/she would use up 5 full days of FFCRA and still have 5 days remaining for use at a later time. If the employee needs to take Paid Sick Leave or Paid Expanded Family and Medical Leave to care for children, it may be taken intermittently as long as the employer agrees to the schedule – even if in increments of less than a full day.

Partial Unemployment – While most states have their own unique programs for employees who experience some form of partial loss of wages (vs. full unemployment), the DOL has recently provided additional flexibility to the state programs for extending partial benefits. As employers really cannot predict or promise how unemployment benefits will be determined by their state agencies, they should encourage any employee who might qualify to apply for benefits.

Health Benefits – Employers must continue group health insurance benefits to employees taking Paid Sick Leave or Extended Family Medical Leave under the same terms and conditions. Employees may be required to continue to make their contributions towards these coverages. If employees are unable to return to work, depending upon the terms and conditions of your medical insurance plan, employees might have to be terminated from the plan and made eligible for COBRA or state “mini-COBRA” benefits. However, during these challenging times, most insurance carriers are allowing more flexibility for keeping employees covered in circumstances when they might ordinarily have lost coverage. We highly recommend checking with your own broker or insurance company. Any time taken off under FFCRA will be considered the same as hours worked for purposes of meeting eligibility requirements under group health insurance plans.

Supplementing Paid FFCRA – While employees are not entitled and cannot be forced to use any other type of paid leave provided by the employer to supplement FFCRA paid time, employers are free to allow this option. For example, employees who are only receiving 2/3 of their regular wages or who have maxed out on the daily or cumulative caps might want to use existing PTO benefits to make up the missing wages. Likewise, an employer is permitted to simply pay the employees to make up any difference. Either form of supplemental wages would not be subject to the reimbursement provisions via tax credits that apply for FFCRA paid time.

Existing Time Off Policies – Employers who already provide any type of paid time off benefits such as vacation, sick, or PTO are not permitted to use these benefits to offset their obligation to provide paid FFCRA time.

Coordination with “Regular” FMLA Leave:

  • Paid Sick Leave – Employees who have a qualifying reason to take Paid Sick Leave are eligible for the full paid time off regardless of any prior FMLA taken before 4/1/20 as Paid Sick Leave is not considered a type of FMLA leave.
  • Emergency Family Medical Leave – If the employer was covered by FMLA prior to 4/1/20, any time taken off by an employee for a different FMLA leave will impact the amount of time available for Emergency Family Medical Leave. Using the regular method that the employer has adopted for tracking their FMLA 12-month period, prior time taken in the current year will be deducted from the total 12-week allowance. For example, an employee who previously used 6 weeks of FMLA due to his/her own serious medical condition or to care for a family member, would only have 6 weeks remaining in this year for Emergency Family Medical Leave. Likewise, an employee who takes less than a full 12 weeks of Emergency Family Medical Leave between now and 12/31/20, could potentially use the remaining 6 weeks of total leave allowed under FMLA for another qualifying (non COVID-19) reason during the remainder of the employer’s established 12-month period.

Mandatory Notice

  • GET YOUR COPY HERE: Employee Rights under the Families First Coronavirus Response Act
  • This notice must be posted at your place of business in a conspicuous place. Employers are permitted to mail or email the notice directly to employees or post on their company website.
  • NOTE that even small businesses who intend to take the limited exemption for providing FFCRA paid time off in childcare situations must still distribute this notice as Paid Sick leave for other purposes will still apply.

More Questions – We all still have so many more questions on this new law but are hopeful that the promised regulations will answer them. In the meantime, please reach out to us at Vantaggio for help understanding this new, complex law and or any assistance with what this means for your specific circumstances and staff.

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

MANDATORY NOTICE FOR EMPLOYEES 03/25/2020

MANDATORY NOTICE FOR EMPLOYEES

Families First Coronavirus Response Act

On March 24, 2020 the US Dept of Labor issued Q&As on the Families First Coronavirus Response Act (see our original blog post:  Urgent HR Law COVID-19) pending publishing of formal regulations and published a mandatory notice that must be provided to all employees.

As a reminder, the bill provided for a number of relief actions; however, this update will focus on the 2 directly related to employers and employees:

  • Expanded Family and Medical Leave – which provides for a new type of paid FMLA leave.
  • Emergency Paid Sick Leave – which provides for a new type of paid sick days benefit.

Effective Dates – Although we originally expected the laws to take effect on April 2, both will be in effect on April 1, 2020.

Employer Coverage – As the laws apply to companies with fewer than 500 employees, how do employers assess their headcount?

  • At the time the leave is taken, you count all full time and part-time employees within the US including territories and possessions.
  • All employees count – those on leave, temporary employees jointly employed by you and another entity, day laborers through a temp agency. True independent contractors may be excluded.
  • A corporation and all its separate establishments and divisions are considered one single employer.
  • For a corporation with an ownership interest in another corporation, both would be separate employers unless considered a “joint employer” under the Federal Fair Labor Standards Act in which case both groups of employees would be counted.
  • Other related entities will be considered separate employers unless they meet the “integrated employer” test under the Federal Family Medical Leave Act.

Exemptions – The laws allow employers with fewer than 50 employees to be exempt if compliance would jeopardize the viability of the business. We’ve had many, many questions asking for details about how such an exemption would be obtained. For now, the DOL advises businesses to document why your business would meet the criteria and have promised more details in the upcoming regulations. They have asked that no one send any information at the current time to the DOL.

Pay During Emergency Paid Sick Leave

  • When calculating pay for hourly employees, any overtime the employee would normally have been scheduled to work must be included even if the total weekly hours is over 40; however, the premium portion of overtime may be excluded. For example, an employee who typically works a 50-hour workweek with 40 hours paid at straight time and 10 hours paid at time and a half, would get 50 hours of emergency paid sick leave paid at straight time for that week.
  • The total number of hours that an employee is entitled to for emergency paid sick leave is still 80 hours for full-time employees and a pro-rated amount for part-time. In the example above, the employee who got 50 hours in his/her first week of leave would only have 30 left in the second week.

Regular Rate of Pay – Both types of leaves must use an hourly employee’s “regular rate of pay” when calculating pay. For purposes of FFCRA this will be the average of the employee’s regular rate over a period of up to 6 months prior to the date on which the leave commences. Keep in mind that the regular rate of pay must factor in all additional forms of non-discretionary compensation such as commissions, tips, piece rates, etc.

Multiple Reasons to use Emergency Paid Sick Leave – If an employee takes 80 hours of emergency paid sick leave for one permissible reason such as caring for him/herself due to being ill with COVID-19, the person will have exhausted all available leave and would not be entitled to another 80 hours even if there is then another qualifying reason to take leave such as caring for a quarantined family member.

Coordination of Extended FMLA and Emergency Paid Sick Leave – Extended FMLA is available for up to 12 weeks if an employee cannot work or “telework” due to needing to care for a child whose school or childcare is not available due to COVID-19. The first 10 days of this leave would be unpaid during which time the employee could use existing sick or PTO but could also use the new Emergency Paid Sick days. Using any other paid time off available during these initial 10 days does not increase the maximum about of time off of 12 weeks.

Mandatory Notice

  • GET YOUR COPY HERE: Employee Rights under the Families First Coronavirus Response Act
  • This notice must be posted at your place of business in a conspicuous place. Employers are permitted to mail or email the notice directly to employees or post on their company website.
  • Additional language versions are being developed but are not yet available and are not required.

More Questions – We all still have so many more questions on this new law but are hopeful that the promised regulations will answer them. In the meantime, please reach out to us at Vantaggio for help understanding this new, complex law and or any assistance with what this means for your specific circumstances and staff.

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

URGENT HR LAW COVID-19 UPDATE 03/19/2020

URGENT HR LAW COVID-19 UPDATE 03/19/2020

Vantaggio HR will be providing a series of regular HR updates to our valued clients and colleagues during these very uncertain times. We know that many of you have questions about the many changes in government policy and how they can affect the current state and future of your business and what that means for your employees. We’re here to help.

Today’s update will focus on the new federal Families First Coronavirus Response Act, signed into law by the President last night. Please note that the final version of the law differs in important areas from the version passed a few days ago by the House. There are a lot of articles on the web that may cause confusion.

While the bill provides for a number of relief actions, this update will focus on the 2 directly related to employers and employees:

  • Emergency Family and Medical Leave Act – which provides for a new type of paid FMLA leave.
  • Emergency Paid Sick Leave Act – which provides for a new type of paid sick days benefit.

Effective Dates – Both acts take effect on April 2, 2020 and remain in effect through December 31, 2020.

Employer Coverage – Both acts apply to all private businesses in the United States with fewer than 500 employees.

Exemptions – Both acts allow:

  • Employers of employees who are healthcare providers or emergency responders to exclude such employees from coverage.
  • The Secretary of Labor to issue regulations that would:
    • Exclude certain healthcare providers or emergency responders from the definition of employees under the act
    • Exempt small businesses with fewer than 50 employees if compliance would jeopardize the viability of the business.

Note that we have no further information at the current time about how such exemptions would be requested or approved.

Tax Credits – The cost for providing the benefits under these acts will be reimbursed to employers by the federal government through credits that the employer will receive against their Social Security and Medicare tax liabilities. Additionally, these reimbursements can be “grossed up” to include a share of the employees’ health insurance costs associated with the paid time off provided.

Note there is also a formula available for similar credits for certain self-employed individuals.

Notices – Both acts require the posting of notices that will be developed by the Department of Labor. With regards to other notices and certifications required under FMLA and other legally mandated paid sick leave, we have no further information at the current time.

Employee Protections – Both acts prohibit employers from disciplining, discharging, or discriminating against employees who exercise their rights to these benefits.

Emergency Family and Medical Leave Act

  • Employee Eligibility – Applies to any employee working for a covered employer for at least 30 days (unlike “regular” FMLA leave which is available only to employees with 1250 hours and 12 months of prior service at a work location with 50 or more employees in a 75-mile radius).
  • Reason to Take Leave – Employees who are unable to work or “telework” due to the need to care for a son or daughter under 18 years of age whose school is closed or whose childcare is unavailable as a result of a public health emergency. This is the only reason to take FMLA leave and does not cover individuals who are ill or are caring for others who ill due to COVID-19.
  • Duration of Leave – up to 12 weeks.
  • Pay During Leave:
    • First 10 Days – are allowed to be unpaid. Employees may choose, but the employer may not require, use of existing paid time off such as vacation, sick, or PTO.
    • Remainder of Leave – The employee must be paid by the employer:
      • 2/3 of the employee’s regular wages
      • Up to a maximum of $200 per day and an aggregate maximum of $10,000
      • Part time employees – must be paid at FLSA regular rate of pay times the number of hours the employee would normally have been scheduled to work. Special rules apply for employees with varying schedules.
  • Job Restoration – Similar to “regular” FMLA leaves, employees are entitled to be returned to the same or a “substantially similar” position. However, the bill does provide for relief from guaranteed job restoration for certain employers with fewer than 25 employees if specific conditions are met.
  • Notice – Employees can be required to provide advance notice to the employer when practicable.

Emergency Paid Sick Leave Act

  • Reason to Take Leave – Employees who are unable to work or “telework” due to one of the following reasons:
    • 1- The employee is subject to quarantine due to COVID-19;
    • 2- The employee has been advised by a healthcare provider to self quarantine due to COVID-19;
    • 3- The employee is experiencing symptoms and is seeking medical care;
    • 4- The employee is caring for an individual (that does not have to be a family member) who is experiencing either #1 or #2 above;
    • 5- The employee is caring for a son or daughter whose school is closed or whose childcare is unavailable due to COVID-19;
    • 6- The employee is experiencing other substantially similar conditions as specified by the Secretary of Health and Human Services
  • Employee Eligibility– Applies to any employee working for a covered employer with no length of service requirement.
  • Amount of Paid Time Off:
    • Full Time Employees – 80 hours
    • Part Time Employees – the average number of hours the employee works in a 2-week period. Special rules apply for employees with varying schedules.
    • Benefits do not rollover or carry over and cease after the need for the leave goes away.
    • Employees cannot be required to find coverage for their shifts if they are absent.
    • Employers may not require the use of other paid time off such as sick, vacation, or PTO prior to using Emergency Paid Sick Days.
    • While the prior version of the bill made it clear that the entitlement to these new Paid Sick Days was in addition to any other paid time off currently required by law or offered by the employer, the final bill remained silent on this issue. At Vantaggio, out of an abundance of caution, we are presuming that other paid time off could not be used to meet these new requirements.
  • How Pay is Determined:
    • If an employee takes time off for his/her own health situation under #1, #2, or #3 above, the employee is to be paid
    • 100% of his/her regular wages
    • Not to exceed $511 per day and an aggregate maximum of $5,110
  • If an employee takes time off under #4, #5, or #6 above, the employee is to be paid
    • 2/3 of his/her regular wages
    • Not to exceed $200 per day and an aggregate maximum of $2,000
    • No less than minimum wage at the employee’s location

These new laws will require a lot of internal administration and interpretation as we’re awaiting further guidance.

Please reach out to any of us at Vantaggio if you need help with getting quickly in compliance. We’re here to support you.

Call: 877-VHR-RELX

Email: info@vantaggioHR.com

 

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