Families First Coronavirus Response Act: COVID-19 Paid Sick Leave and Expanded Family and Medical Leave Requirements

By XpertHR

The Families First Coronavirus Response Act (H.R. 6201 or FFCRA), signed into law on March 18, 2020, includes the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA). Both the EPSLA and EFMLEA take effect April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. They do not apply retroactively.

The Department of Labor (DOL) released regulations on the FFCRA, which are incorporated below. The regulations became operational on April 1, 2020, and are effective from April 2, 2020, through December 31, 2020.

The DOL has also published various pieces of guidance explaining the FFCRA’s paid sick leave and expanded family and medical leave requirements. The guidance includes a Fact Sheet on FFCRA Employer Paid Leave Requirements and FFCRA Questions and Answers (Q&As). The Fact Sheet and Q&As do not have the force of law. However, they do express the enforcement agency’s interpretation of employers’ obligations under the law.

Covered Employers

Under both the EPSLA and EFMLEA, a covered employer means any person engaged in commerce or in any industry or activity affecting commerce and includes private employers with fewer than 500 employees and public agencies with one or more employees.

Employer size is determined at the time the employee takes leave. To determine coverage, an employer must count all employees regardless of their length of service, including:

• Full-time and part-time employees (counted as full-time employees) working in any US state, the District of Columbia or any US territory or possession;
• Employees on any type of leave (e.g., FMLA, sick leave, vacation leave);
• Employees of temporary placement agencies who are jointly employedunder the FLSA with another employer (regardless of which employer’s payroll the employee appears on); and
• Day laborers supplied by a temporary agency (regardless of whether the employer is the temporary agency or the client firm if there is a continuing employment relationship).

Properly classified independent contractors are not considered employees and are not counted towards the employer coverage threshold. An employer also should not count employees who have been laid off or furloughed and have not subsequently been reemployed.

All common employees of joint employers or all employees of integrated employers must be counted together.

Typically, a corporation (including its separate establishments or divisions) is considered a single employer and all of its employees must be counted together. If two entities are found to be joint employers, all of their common employees must be counted.

Where one corporation has an ownership interest in another corporation, the two corporations are separate employers, unless they are joint employers under the FLSA, with respect to certain employees.

In general, two or more entities are separate employers unless they meet the integrated employer test under the FMLA. If two entities meet this test, then employees of all entities making up the integrated employer must be counted.

29 CFR 826.40(a).

Small Business Exemption

Businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide paid sick leave or expanded family and medical leave due to school closings or child care unavailability if the requirement would jeopardize the viability of the business. A small business may claim this exemption if an authorized officer of the business has determined that:

• The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
• The absence of the employee or employees requesting leave 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 or employees requesting leave, and the labor or services are needed for the business to operate at a minimal capacity.

To elect the small business exemption, an employer must document that a determination was made according to the above criteria. The employer should retain the records in their files; do not send the documentation to the DOL.

Regardless of whether the employer chooses to exempt one or more employees, the employer must still post the required notice.

29 CFR 826.40(b).

Employer Posting Requirements

Every employer covered by the FFCRA’s paid leave provisions is required to post and keep posted on its premises, in conspicuous places, a notice explaining the FFCRA’s paid leave provisions and providing information on the procedures for filing complaints of FFCRA violations with the DOL’s Wage and Hour Division.

The DOL published the Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave Under the Families First Coronavirus Response Act (FFCRA) Poster, which must be provided to current or newly hired employees only. As of April 1, 2020, covered employers are required to post the notice. An employer may duplicate the text of the DOL’s notice or it may use another format, as long as it includes, at a minimum, all of the information contained in the DOL’s notice.

For employees who work from home, an employer may satisfy the posting requirement by emailing or directly mailing the notice to employees, or by posting the notice on an internal or external employee information website. Employers furnishing notices to sensory-impaired individuals must also comply with all applicable requirements under federal and state law.

Employers are not required to post this notice in multiple languages; however, the DOL has translated the poster into other languages.

For employers who are covered by the EFMLEA, but are not covered by the other FMLA provisions, posting this FFCRA notice satisfies their FMLA general notice obligation.

29 CFR 826.80.

To help an employer comply with the posting requirements, the DOL published FFCRA Notice FAQs. FAQs do not have the force of law. However, they do express the enforcement agency’s interpretation of employers’ obligations under the law. The FAQs on the FFCRA’s notice provisions specifically state that the notice cannot be placed in a binder. Also, if employees report directly to work in several different buildings, the employer must post the notice in each building, even if the buildings are located in the same general vicinity.

Benefits

When an employee takes leave under the EPSLA or EFMLEA, an employer must maintain the employee’s coverage under a group health plan, as defined by the FMLA, on the same conditions as if the employee had been continuously employed during the entire leave period. All employers covered by the EPSLA or EFMLEA are subject to this requirement.

The same group health plan benefits provided to an employee prior to taking paid sick leave or expanded family and medical leave must be maintained while the employee is taking leave. For example, if family member coverage is provided to an employee, then family member coverage must be maintained during the leave. Similarly, benefit coverage for medical care, surgical care, hospital care, dental care, eye care, mental health counseling, substance abuse treatment, etc., must be maintained while an employee is taking leave if it is provided in an employer’s group health plan, including a supplement to a group health plan, whether or not provided through a flexible spending account or other component of a cafeteria plan.

If an employer provides a new health plan or benefits or changes health benefits or plans while an employee is taking paid sick leave or expanded family and medical leave, the employee is entitled to the new or changed plan/benefits to the same extent as if the employee was not on leave. Any other plan changes (e.g., in coverage, premiums, deductibles) that apply to all employees of the workforce would also apply to employees taking leave.

Notice of any opportunity to change plans or benefits must also be given to an employee taking leave. If the employee requests the changed coverage, the employer must provide it.

An employee remains responsible for paying their portion of group health plan premiums that had been paid by the employee prior to taking paid sick leave or expanded family and medical leave. If premiums are raised or lowered, the employee must pay the new employee premium contribution on the same terms as other employees. The employee’s share of premiums must be paid by the method normally used during any paid leave, presumably as a payroll deduction. If leave is unpaid, or the employee’s pay during leave is insufficient to cover the employee’s share of the premiums, the employer may obtain payment from the employee in accordance with the FMLA.

An employee may choose not to retain group health plan coverage while an employee is taking paid sick leave or expanded family and medical leave. However, when the employee returns from leave, the employee is entitled to be reinstated on the same terms as prior to taking the leave, including family or dependent coverages, without any additional qualifying period, physical examination, exclusion of pre-existing conditions, etc.

Except as required by the Consolidated Omnibus Budget Reconciliation Act (COBRA), an employer’s obligation to maintain health benefits while an employee is taking paid sick leave or expanded family and medical leave ends if and when the employment relationship would have terminated if the employee had not taken leave (e.g., the employee fails to return from leave or the employer closes its business).

29 CFR 826.110.

Employee Notice Requirements

The EPSLA states that, after the first workday (or portion of a workday) an employee receives emergency paid sick leave, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time. Sec. 5110(5)(E).

The EFMLEA states that, if the need for expanded family and medical leave is foreseeable, an employee must provide the employer with notice as is practicable. Sec. 3102(b).

The DOL provides additional guidance in its regulations regarding employee notice requirements, which is applicable to both the EPSLA and EFMLEA. Generally, it will be reasonable for an employer to require employees to comply with its usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances. However, what is considered reasonable depends on the facts and circumstances of each situation. The DOL encourages, but does not require, employees to notify their employer of their paid sick leave or expanded family and medical leave request as soon as practicable. If an employee fails to give proper notice, the employer should give the employee notice of the failure and an opportunity to provide the required documentation prior to denying the leave request.

In any case where an employee requests leave in order to care for their child whose school or place of care is closed or whose child care provider is unavailable due to COVID-19-related reasons, if that leave is foreseeable, then the employee must provide the employer with notice of such paid sick leave or expanded family and medical leave as soon as practicable.

Otherwise, notice may not be required in advance, and may only be required after the first workday (or portion of it) for which the employee takes paid sick leave or expanded family and medical leave. After the first workday, it is reasonable for the employer to require notice as soon as practicable under the facts and circumstances of the particular case. Generally, it will be reasonable for notice to be given by the employee’s spokesperson (e.g., spouse, adult family member or other responsible party) if the employee is unable to do so personally.

Generally, it will be reasonable for an employer to require oral notice and sufficient information for the employer to determine whether the requested leave is covered by the EPSLA or EFMLEA.

29 CFR 826.90.

Employee Documentation Requirements

Prior to taking leave under the EPSLA or EFMLEA, an employee must provide the employer with documentation that includes:

• The employee’s name;
• The date(s) for which leave is requested;
• The qualifying reason for the leave; and
• An oral or writtenstatement that the employee is unable to work due to a qualifying reason.

Note that IRS FAQs specify that a written leave request will substantiate eligibility for the FFCRA paid leave tax credit.

A paid sick leave request based on a quarantine or isolation order (affecting the employee or an individual the employee is caring for) must also include the name of the government entity that issued the quarantine or isolation order. A paid sick leave request based on advice for the employee, or an individual the employee is caring for, to self-quarantine must also include the name of the health care professional advising self-quarantine.

A paid sick leave or expanded family and medical leave request based on the employee’s child’s school or place of care closing or child care provider unavailability must include:

• The name of the child being cared for;
• The name of the school, place of care or child care provider that has closed or is unavailable; and
• A representation that no other suitable person will be caring for the child during the leave period.

The employer may also request an employee to provide additional material as needed for the employer to support a request for tax credits according to the FFCRA. An employer is not required to provide leave if materials sufficient to support the applicable tax credit have not been provided.

29 CFR 826.100.

See the IRS FAQs for additional information. Note that the IRS stipulates that an employee who is unable to work or telework because of a need to care for a child older than 14 years of age during daylight hours should provide a statement that special circumstances exist requiring the employee to provide care.

Recordkeeping

An employer is required to retain all of the employee documentation specified above for four years, regardless of whether leave was granted or denied. If an employee provided oral statements to support the request for paid sick leave or expanded family and medical leave, the employer must document and maintain such information in its records for four years.

An employer that denies an employee’s EPSLA or EFMLEA leave request based on the small business exemption must document the determination by its authorized officer that it is eligible for the exemption and must retain the documentation for four years.

Additionally, in order to claim tax credits from the IRS, an employer must maintain the following records for four years:

• Documentation to show how the employer determined the amount of paid sick leave and expanded family and medical leave paid to employees that are eligible for the credit, including records of work, telework, and paid sick leave and expanded family and medical leave;
• 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 (or, for employers that use third-party payers to meet their employment tax obligations, records of information provided to the third-party payer regarding the employer’s entitlement to the credit claimed on Form 941); and
• Other documents needed to support its request for tax credits according to applicable IRS forms, instructions and information for the procedures that must be followed to claim the tax credit. For more information, seethe IRS FAQs.

Information obtained from XpertHR