The U.S. Department of Labor (DOL) announced that the paid leave provisions of the Families First Coronavirus Response Act (FFCRA) are effective on April 1, 2020. President Trump signed the order on March 18, 2020, and it stated that leave provisions would take effect not later than 15 days after the enactment, leading many to assume the DOL would implement the law on April 2, 2020. We now know it will be a day sooner.
To support our clients, we offered an FFCRA webinar with a live Q&A session. As a result, we’ve compiled a list of frequently asked questions and answers to help employers prepare.
Q: Can you provide an update on emergency family and medical leave entitlement for rehired employees?
A: The CARES Act added new language to the EFMLA to address leave entitlement for "rehired employees." The new language states that, for the purpose of EFMLA, the term "employed for at least 30 calendar days" includes an employee who was laid off on or after March 1, 2020, had worked for the employer for not less than 30 of the last 60 calendar days prior to their layoff, and was rehired. This means that rehired employees who meet those criteria will be eligible for EFMLA without "restarting the clock" on the 30-day requirement.
Q: If I am an employer with under 50 employees, how do I get an exemption to FFCRA?
A: The Secretary of Labor has the authority to exempt employers if the provision of the FFCRA would jeopardize the viability of their business. You should document why your business, with fewer than 50 employees, meets the criteria. The Secretary of Labor will provide further guidance on this.
Q: What if my employees do not meet the requirements under FFCRA, but I pay them to stay home anyway because I do not have any business? Am I eligible for credits?
A: No. Credits are for the Families First Coronavirus Response Act leaves only.
Q: How will I receive the tax credits?
A: You will be able to reduce the employment tax burden for any wages paid to your employees by the amount you pay in family and sick leave subject to the appropriate limits.
Q: If an employee is at home with their child because the school/place of care closed or the child care provider is unavailable, do they get sick leave, expanded family and medical leave, or both. How would it work?
A: The Emergency Paid Sick Leave Act (EPSLA) provides for an initial two weeks of paid leave. This covers the first ten days of the Emergency Family Medical Leave Expansion Act (EFMLEA), which is unpaid unless the employee elects to use existing PTO under the employer’s policy. After the first ten days, the employee gets 2/3 of their regular rate of pay for the hours they would have been scheduled to work in the subsequent ten weeks.
Q: Can EFMLEA be intermittent? Is paperwork required for EFMLEA?
A: Guidance has not yet been published on this. EFMLEA is an expansion of traditional FMLA, so best practices would be to allow for intermittent leave. Traditional FMLA does require certification/other documentation, so something similar will most likely be required.
Q: What happens if the employee’s position is eliminated while they are on EFMLEA leave?
A: If the employee had been terminated even if he/she had not taken FMLA leave, the employer would not have to reinstate the employee returning from FMLA leave. Employers with under 25 employees are generally excluded from reinstatement if the employee’s position no longer exists due to an economic downturn or other circumstances caused by a public health emergency.
Q: What is the regular rate of pay for the FFCRA?
A: For purposes of the FFCRA, the regular rate of pay is the average of the regular rate over a period of up to six months before the date on which the leave is taken. If the employee has not worked for their employer for six months, the regular rate used to calculate paid leave is the average of the regular rate of pay for each week the employee has worked.
Q: When calculating pay due to employees, must overtime hours be included?
A: Yes. The EFMLEA requires you to pay an employee for hours the employee normally would have been scheduled to work even if it is more than 40 hours a week. However, the EPSLA requires that paid sick leave be paid only up to 80 hours over two weeks. For instance, an employee who is scheduled 50 hours a week may take 50 hours of paid sick leave the first week and 30 hours the second week. Total hours are capped at 80.
Q: What if I already offer paid time off?
A: Emergency paid sick leave is in addition to whatever paid time off is already offered (including state and local requirements). An employer may not require an employee to use other paid time off provided by the employer before the employee uses the paid sick leave under this Act.
Q: If I had to put some of my employees on unpaid leave/furlough (their employment has not terminated), do I have to provide these leaves to them?
A: The law is not clear about that, but if they are still considered active employees, it is recommended to provide leave and pay them under these laws if they meet a qualifying reason.
Q: What if I terminate employees before the effective date? Then I won’t have to provide these leaves, correct?
A: If an employee is not employed on April 1, they are not entitled to these benefits. There is a risk, so you should consult with legal counsel before terminating employees.
Q: What should I do if I have an employee that refuses to come to work?
A: You should tread lightly. Communicate with the employee and listen to why they do not want to come to work. An employer should communicate current expectations but also be flexible and work with the concerned employee. An employer should consult with legal counsel before taking adverse action.
For additional information, visit the U.S. Department of Labor's FFCRA Questions and Answer page.
Legal Notice – The purpose of the information above is to assist in the discussion of risk, concerns, and general requirements. It is not tax or legal advice. It is recommended that you seek qualified tax and legal counsel familiar with your circumstances before taking any action.