ESS Explains FFCRA & its Requirements for Employers
On April 1, 2020, The United States Department of Labor (DOL) approved a temporary action as part of the Families First Coronavirus Response Act (FFCRA) which also effects the Family and Medical Leave Act. The action will benefit both employees and employers. The Act provides tax credits to covered employers who must provide paid sick leave to employees for specified reasons relating to COVID-19. At Employer Support Services (ESS), we aim to be your trusted resource for regulations impacting your business due to the COVID-19 outbreak. For more information or hands-on consulting on the new policies, contact us today.
The Temporary Ruling of the FFCRA Requirements
The temporary ruling of the FFCRA requires employers to provide employees with paid sick leave if they are unable to work for reasons relating to COVID-19. This includes as specified by the DOL :
- Up to two weeks (80 hours) of paid sick leave at their normal rate of pay if the employee can’t work due to experiencing symptoms of COVID-19 and is seeking medical attention or quarantined after testing positive.
- Up to two weeks (80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay if an employee needs to care for an individual who is quarantined or is caring for a child whose school or place of care is closed for reasons relating to COVID-19.
The temporary act reimburses employers with tax credits for the cost of providing that paid sick leave as well to help bolster the economy during the outbreak. It is set to expire on December 31, 2020.
FFCRA Also Temporarily Expands the Family and Medical Leave Act
Effective April 2, 2020, companies with fewer than 500 employees must offer FMLA to employees who have worked at the company for at least 30 days. If an employee asks for leave due to a COVID-19 designated reason, they must provide a notice of the necessity for leave.
Under the Act, a portion of the leave must be paid leave. The first 10 days of leave for the employee is unpaid, however, on day 11 employers must provide paid leave for up to 12 weeks. The pay itself must be at least two-thirds of the employee’s regular wages (not to exceed $200 per day and $10,000 in total).
Qualifying reasons for paid sick leave under the FMLA includes caring for a minor child who cannot attend school or their place of care due to COVID-19 related reasons, including closures.
This expansion also provides an opportunity for small businesses to obtain exempt status if they have fewer than 50 employees and can establish that the requirement would jeopardize the viability of their business. The Act expansion ends on December 31, 2020, and excludes certain health care workers and emergency responders.
Employers Who are Covered by the FFCRA & What You Need to Do
Covered employers include public and private employers with fewer than 500 employees. It does not cover federal government companies. Companies with fewer than 50 employees may qualify for exemption of providing paid leave due to child care if it would jeopardize the business. Contact ESS for more information on qualifying businesses.
Employers are required to post a notice of the FFCRA requirements by April 1, 2020, in a visible place on their premises. For companies that are teleworking, you may meet this requirement by emailing the notice directly to employees or posting the information on an accessible internal or external website. Find the poster here.
Employee Qualifiers for Leave Due to COVID-19
The FFCRA specifically outlines the qualifying reasons for paid sick leave due to COVID-19. Reasons include:
- If the employee is subject to federal, state, or local quarantine or isolation orders
- If the employee is advised by a health care provider to self-quarantine
- If the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
- If the employee is caring for an individual ordered to self-quarantine
- If the employee is caring for a child whose school or care place is closed due to COVID-19
- If the employee is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury
Documentation You Should Collect as the Employer Under FFCRA
The Act states that an employer may require that employees provide reasonable notice as soon as practicable for paid sick leave. Employers may also request sufficient information to determine whether or not the FFCRA will cover the requested leave. As an employer, you should collect:
- The employee’s name
- The date for which the leave is requested
- The qualifying reason for the leave relating to COVID-19
- A statement from the employee stating they are unable to work or telework due to the qualifying reason
As the employer, you should also require documentation from the government entity that issued a quarantine order or the name of the health care provider who recommended the self-quarantine for either the employee or for the individual the employee is caring for.
Employees caring for a child must provide the child’s name, the place of care that is closed, and a statement that no one else is available to care for the child.
Tax Credits for Covered Employers
Employers who are covered by the FFCRA are eligible for a dollar-for-dollar reimbursement through tax credits for all wages paid that qualify under the Act. The tax credits will not exceed the payment caps for an employee who takes leave for a qualifying reason. To claim the tax credits, employers must also retain:
- Form 941 Employer’s Quarterly Federal Tax Return
- Form 7200 Advance of Employer Credits Due To COVID-19
- Any other applicable filings made to the IRS requesting the credit
ESS is Here to Help You Navigate the FFCRA
At Employer Support Services, we are dedicated to helping our clients navigate the new policies and challenges they are facing due to COVID-19 with hands-on consulting. We are actively assisting in furlough decisions and document navigation, as well as other human resource challenges during this time. Contact ESS today if you need employer support during these difficult times.