FFCRA

FAMILIES FIRST CORONAVIRUS RESPONSE ACT

THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT (FFCRA)

The FFCRA, passed on March 18, 2020 contained 2 major Acts with requirements for employers of fewer than 500 employees:

  1. The Emergency Paid Sick Leave Act
  2. The Emergency Paid Family and Medical Leave Expansion Act

Click here for new government guidance through July 14, 2020.

FFCRA Regulations: Definitions and Descriptions
for All Covered Employers

  • Definition of Covered Employers
  • Determining my number of employees
  • Determining an affected employee’s hours worked and wage
  • “Stay at Home” and “Shelter in Place” orders and these regulations
  • What an employee must do to be eligible for paid leave
  • Employers’ responsibility regarding FFCRA compliance poster
  • What we know today about tax relief and credits available to employers

GUIDANCE VIDEO: Less than 50 Employees

  • Determining your exemption eligibility
  • How to file for an exemption
  • Defining what an exemption means
  • Best practices for retaining talent if exempted

GUIDANCE VIDEO: 50-500 Employees

  • The impact of childcare considerations and paid leave
  • Considerations for companies close to either end of the compliance parameters
  • How to treat staff effectively able to work from home
  • Best practices to consider if potentially eligible for exemption

GUIDANCE VIDEO: MORE than 500 Employees

  • Why this group was exempted
  • Consideration for the expectations the public holds for large employers
  • Remember to promote the value of the benefits you offer

All employees of covered employers (500 or fewer employees) are eligible

No matter when they were hired

  • Includes full-time and part-time employees
  • A “full-time” employee is one who is normally scheduled to work 40 hours per week. A “part-time” employee is one who is normally scheduled to work less than 40 hours per week
  • Special rules apply to Health Care Providers and First Responders (those are not covered in this Summary)
  • The number of employees is counted at the time an employee’s leave is to be taken

The Act expires (as it stands now) on December 31, 2020

Leave is in addition to any other employer benefits an employee has or could accrue

  • Even if, prior to April 1, the employer gave an employee paid sick leave for a qualifying reason under E-PSL, the employee is still entitled to the 80 total hours of paid sick leave for qualifying reasons after the April 1 effective date

Eligible employees are entitled to:

Up to 80 hours’ paid sick time for any combination of the following 6 qualifying reasons: 

  1. Employee is “subject to a Federal, State or local quarantine or isolation order related to COVID-19”
  2. Employee has been advised by a health-care provider to self-quarantine
    3. Employee is experiencing COVID-19 symptoms and seeking a medical diagnosis
    4. Employee is caring for an individual covered under Nos. 1 or 2
    5. The employee is caring for his/her son or daughter if their school or place of care has been closed, or the child care provider is unavailable, due to COVID-19 precautions; AND/OR
    6. Employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor

Fulltime employees are entitled to 80 hours’ E-PSL.  Part-time employees receive leave equal to the number of hours per week the employee works, on average, over a 2-week period

  • Leave must be granted for the total number of regularly scheduled hours per week (to a total maximum of 80 hours)

Example: if a full-time employee is regularly scheduled to work 45 hours per week, s/he must be given 45 of the 80 hours during the first week of E-PSL.  The remaining 35 hours would be used during the second week of E-PSL

Other requirements of E-PSL:

  • Employees cannot be required to find their own replacements before using E-PSL
  • Any other paid leave given by the employer before April 1, 2020 does not “count” toward E-PSL
  • Unless an employee is teleworking, E-PSL being taken for qualifying reasons related to COVID-19 must be taken in full-day increments.
  • Unless an employee is teleworking, once s/he begins taking paid sick leave for one or more of the 6 qualifying reasons, the employee must continue to take paid sick leave each day until the employee either (1) uses the full amount of paid sick leave or (2) no longer has the qualifying reason for taking paid sick leave.
    • Unless the employer and employee agree that the employee may take intermittent paid sick leave to take care of his/her child whose school or care situation is unavailable because of COVID-19. 
  • Employer may require employee to follow reasonable notice procedures
  • E-PSL does not carry over to the next year
  • Employees forfeit any emergency sick days they don’t use
  • If the employee went on leave before April 1 for one of these reasons, the employee is still permitted to take the full 80 hours of E-PSL after April 1
  • E-PSL is capped at 80 hours for any combination of qualifying reasons

Required pay under E-PSL:

  • For leave taken for reasons 1-3: the regular hourly rate up to $511/day or $5,110 in the aggregate
  • For leave taken for reasons 4 or 6, employees are entitled to pay at 2/3 of their regular rate or 2/3 applicable minimum wage (whichever is higher), up to $200/day and $2,000 in the aggregate over a 2-week period
  • For leave taken for reason 5, employees are entitled to pay at 2/3 of their regular rate or 2/3 of the applicable minimum wage (whichever is higher) up to $200 per day and $12,000 in the aggregate over a 12-week period

Employers subject to multi-employer bargaining agreements:

  • Employers signatory to multi-employer agreements may fulfill their obligation by paying into the multi-employer fund, program or plan the amount equivalent to the E-PSL Act to which covered employees are entitled
  • Employers must follow the plan and any bargaining requirements

Notice posting under E-PSL

  • Covered employers must post the E-PSL Act notice in a conspicuous place
  • The appropriate notice has been made available by the Secretary of Labor (dol.gov)

Enforcement of E-PSL

  • Penalties are the same as for violations of the Fair Labor Standards Act
    • Employees will be entitled to lost wages; an additional amount equal to the lost wages; attorneys’ fees; and reinstatement 
    • Non-compliance is a criminal act 
    • Fines of up to $10,000

The Emergency Family and Medical Leave Act Expansion Act (E-FMLA)

Expands FMLA coverage to employers of fewer than 50 employees

  • Act thus applies to all employers of fewer than 500, regardless of site location
  • Employees must have been employed for at least 30 days
    • The CARES Act (Stimulus Bill passed on March 26, 2020) clarified that, for the purposes of E-FMLA, “employed for at least 30 days” includes employees laid off on or after March 1, 2020, who had worked for the employer for not less than 30 of the last 60 calendar days prior to their layoff AND were rehired
    • NOTE: Employees employed for less than 30 days are entitled to two weeks’ expanded family and medical leave (Under Emergency Paid Sick Leave) for the 6 reasons specified in E-PSL.
  • Covered employers must provide a total 12 weeks of paid (see below) FMLA leave in the preceding 12 months (any FMLA leave taken by the employee during the preceding 12 months may be deducted from this emergency leave allowance)

Qualifying reason(s) for E-FMLA leave:

  • If employee is unable to work or telework due to need for leave to care for his/her child under 18 who was affected by school or child care closures or whose child care provider is unavailable due to public health emergency
    • A child care provider is one who is paid for the services
  • NOTE:  The definition of ‘telework’:  Working remotely from the employee’s normal place of work, if the employer permits it AND the employer has work available for the employee.  Telework is work for which normal wages must be paid and is not compensated under the paid leave provisions of FFCRA.  E-FMLA may be taken intermittently when teleworking IF the employee and the employer agree.  The employee and employer may also agree that the employee can work a different schedule than his/her normal hours when teleworking.
  • If the need for leave is foreseeable, employees must provide as much notice as practicable under the circumstances

Job restoration requirement under E-FMLA

  • Employees must be restored to an equivalent position upon their return to work from E-FMLA, except that:
    • Employers of 25 or fewer must (only) make reasonable efforts to restore the employee to an equivalent position, unless the position was eliminated due to:
      • Economic conditions; OR
      • Other changes in operating conditions affecting employment AND caused by the coronavirus emergency
    • If an equivalent position is not available, employer must make reasonable efforts for one year (after the employee’s leave begins OR the COVID-19 emergency concludes) to contact the employee with any equivalent positions that become available
  • Employers of health care providers and emergency responders are excluded from the E-FMLA provisions
  • The US Department of Labor may exempt businesses with fewer than 50 employees IF complying would jeopardize the viability of the business as a going concern. USDOL will issue more guidance on this 
  • E-FMLA leave does not carry over from one year to the next. Employees are not entitled to reimbursement for unused leave upon termination, resignation, retirement, or other separation from employment

Enforcement of E-FMLA

  • Violation is subject to same enforcement provisions as FMLA
  • Employer can be subject to fines and penalties
  • Employees may be eligible for back wages, benefits, monetary losses, reinstatement and/or attorneys’ fees

Interplay between E-FMLA and E-PSL

  • Employee may be eligible for both types of leave, but only for a total of 12 weeks of paid leave (some of that leave is paid at 2/3 employee’s regular pay)
  • Employee could take both paid sick leave and expanded family leave to care for his/her child whose school or daycare is closed (or paid child care provider is unavailable). E-PSL provides 80 hours of paid leave which could be used to cover the first 10 working days of the E-FMLA leave (which are otherwise unpaid)
    • Employee could, in the alternative, elect (but may not be required to) to use already-accrued employer-provided paid time off to cover this time
  • Employee may use the E-PSL to cover any combination of the 6 qualifying reasons, but the benefit is capped at 80 total hours of E-PSL

Specifics of Both the E-PSL and E-FMLA

Counting the 500-employee threshold for E-PSL and E-FMLA

A “full-time” employee is one who is normally scheduled to work 40 hours per week.  A “part-time” employee is one who is normally scheduled to work less than 40 hours per week.

Count full-time and part-time employees within the U.S. or any territory or possession of the U.S. include:

  • employees on leave
  • temporary employees who are jointly employed with another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll
  • day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship)

Counting for Joint employers

  • Typically a corporation, including its separate establishments or divisions, is considered to be a single employer for purposes of counting the 500 employees
  • If 2 separate entities are considered joint employers under the Fair Labor Standards Act or integrated employers under the Family and Medical Leave Act, the employees must be counted toward the 500-employee threshold.

Employee may be eligible for both types of leave, but only for a total of 12 weeks of paid leave (some of that leave can be at 2/3 pay)

Employee could take both paid sick leave and expanded family leave to care for his/her child whose school or daycare is closed (or paid child care provider is unavailable). E-PSL provides 80 hours of paid leave which could be used to cover the first 10 working days of the E-FMLA leave (which are otherwise unpaid)

Employee could, in the alternative, elect to use already-accrued employer-provided paid time off to cover this time

Employee may use the E-PSL to cover any combination of the 6 qualifying reasons, but the benefit is capped at 80 total hours of E-PSL

Recordkeeping requirement under E-FMLA and E-PSL

For employers who intend to claim a tax credit under FFCRA for payment of emergency sick leave or emergency family leave, the following must be retained:

Appropriate documentation to be kept in your records

  • That would include employee’s requests, any documentation provided by an employee of the need for the leave; and payroll records relating to payments to employees
  • Employers should also consult Internal Revenue Service website for applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit
  • Documentation from an employee requesting leave to care for a child whose child-care options are closed due to COVID-19. This can include a notice of closure from his/her child’s school or daycare and documentation supporting paid sick leave for any of the specified 6 qualifying reasons.

Documentation required from the employee:

  • Employees are required to provide documentation in support paid sick leave as specified in applicable IRS forms, instructions, and information
  • Employers may require additional documentation in support of a request for expanded family and medical leave to care for a child whose school, day care, or care provider is closed or unavailable due to COVID-19
  • Existing FMLA documentation requirements are still in effect if an employee is taking FMLA leave for a qualifying reason for FMLA in effect before FFCRA

Treatment of Overtime under E-FMLA and E-PSL

Under E-FMLA

If an employee’s regular schedule is more than 40 hours, employer must use that regular schedule to determine the number of hours of E-FMLA paid for the ten weeks of paid leave.

If, for example, an employee regularly works 45 hours per week, s/he must be allowed 45 hours’ P-FMLA each week. 

The E-FMLA rate of pay, however, does not have to include any overtime pay into the rate calculation. (Example:  if an employee is regularly scheduled to work 45 hours per week, the employer would pay 2/3 of that 45 hours (29.7 hours) at the regular straight time rate).

Under E-PSL

The employee must be allowed to take the same number of hours’ P-ESL as s/he is normally scheduled in a regular work week, up to a maximum of 80 for any combination of the qualifying reasons in the Act.

Example: Employee is regularly scheduled for 45 hours/week. During the first week of E-PSL, the employee must be paid for 45 hours.  Thereafter, the employee has only 35 hours remaining to completely exhaust the benefit.

The pay required under E-FMLA and E-PSL, however, does not need to include a premium for overtime hours. Thus, the number of hours is “counted” but the extra pay for overtime worked is not included in the hourly rate calculation.

Small Business Exemption

An employer of fewer than 50 employees is exempt from E-PSL and E-FMLA if complying with the law would jeopardize the viability of the business as a going concern.

A small business (under 50 employees) may claim this exemption of an authorized officer of the business has determined that at least one of the 3 following conditions is satisfied:

  • Providing paid E-FMLA or E-PSL would result in the business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  • The absence of the employee(s) requesting E-PSL or E-FMLA would entail a substantial risk to the financial health or operational capabilities of the small 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 leave. These services must be necessary for the business to operate at a minimal capacity
NOTE:  This exception does not apply if the reason for E-PSL is any reason except caring for a child whose school or daycare is closed or the child care provider unavailable, due to COVID-19.

Closures, Furloughs, and Reduced Schedules

If an employer’s worksite was closed before April 1, 2020 (the effective date of FFCRA), employees are not entitled top paid sick leave of expanded family and medical leave.

If the employer closes the worksite on or after April 1, 2020, an employee is not entitled to E-PSL or E-FMLA, even if the request was made before the closure.

If the worksite is closed while an employee is on paid sick leave or expanded family and medical leave, the employer must pay for any sick leave of expanded family leave the employee used before the closure.

If an employer’s business is open but furloughs employees on or after April 1, 2020, a furloughed employee is not eligible for E-PSL or E-FML.

If an employer reduces an employee’s scheduled hours, the employee is not entitled to take E-PSL or E-FMLA for the hours that were eliminated.

Continued Health Coverage under E-PSL and E-FMLA

If the employer offers group health coverage and an employee has elected the coverage, s/he is entitled to continued coverage during E-PSL and E-FMLA on the same terms as if employee continued to work. Employee must make normal contributions.

Supplements or Adjustments to Pay under E-PSL and E-FMLA

Employee may not use pre-existing leave entitlements from the employer concurrently with the E-PSL or E-FMLA for the same hours unless the employer agrees to allow the employee to supplement the amount received from E-PSL or E-FMLA, up to employee’s normal earnings, with pre-existing leave benefits. 

An employer may not unilaterally decide to supplement E-PSL or E-FMLA with pre-existing leave benefits – employer and employee must agree to this.

An employer may pay employees more than that to which they’re entitled under E-PSL or E-FMLA but is not entitled to claim a tax credit for any amounts in excess of FFCRA’s requirements.

Definition of “son” or “daughter” (child) under E-PSL and E-FMLA

This includes the employee’s biological child as well as an adopted or foster child, a stepchild, a legal ward, or a child for whom the employee is standing in local parentis. A “son” or “daughter” is also an adult son or daughter (i.e. one who is 18 or older) who has a mental or physical disability, and is incapable of self-care because of that disability.

Job Restoration under E-PSL and E-FMLA

Employees generally have a right to return to work after either one of these leaves.

The terms under E-PSL and E-FMLA are to be interpreted consistently; thus, the US Department of Labor has clarified that both Acts require employers to provide the same (or nearly equivalent job) to an employee who returns to work following one of these leaves.

An employer may not retaliate against an employee for taking either of these leaves.

An employee is not protected from general employment actions, such as a layoff, that would have affected him/her regardless of whether s/he took the leave. 

An employer can lay off or close a worksite for legitimate business reasons.

The employer must demonstrate that the employee would have been laid off even if the employee had not taken the leave.

An employer may refuse to return an employee to work if s/he is a highly compensated “key” employee as defined under the Family and Medical Leave Act OR if the employer has fewer than 25 employees and the employee took leave to care for his/her own son or daughter whose school or place of care was closed or childcare provider unavailable due to COVID-19 IF all of the following hardship conditions exist:

  • the position no longer exists due to economic or operating conditions related to COVID-19 issues
  • the employer made reasonable efforts to restore the employee to the same or equivalent position
  • the employer makes reasonable efforts to contact the employee if an equivalent position becomes available AND the employer continues to make reasonable efforts to contact the employee for one year
  • beginning either on the date the leave related to COVID-19 concludes OR the date 12 weeks after the leave began, whichever is earlier

How can an employer determine if FFCRA is available for their employees with children returning to school

In an effort to try to simplify the possible situations that you may be trying to answer, ERA has created a decision tree to walk through whether or not FFCRA benefits are available under a particular situation.

Tax Credits

 Tax credit information has not been finalized by the Treasury Department. We are waiting on final details and will update as we collect that information.

  • Tax credits are available to employers for wages paid under FFCRA 
  • FFCRA created a refundable paid sick leave credit and the paid child care leave credit for eligible employer.
  • Eligible employers who pay qualifying emergency sick or emergency child care leave can retain an amount of the payroll taxes — they would normally pay over to the IRS — equal to the amount of qualifying emergency pay.
  • Payroll taxes that can be retained: withheld federal income taxes; employee share of Social Security and Medicare taxes; and employer share of Social Security and Medicare taxes of those employees who received emergency pay.
  • The credit is capped at $511 of wages paid per day to each employee to care for him/herself and capped at $200 of wages paid per day for each employee to care for a family member or child whose school is closed or day care provider unavailable.
  • Credit is generally limited to 10 days of wages per employee.
  • If there are insufficient payroll taxes to cover the cost of qualified sick and child care leave paid to the employees, employers will be able to request an accelerated payment from the IRS.
  • The IRS expects to process these requests in two weeks or less.