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

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