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Key Provisions of the CARES Act

March 30 - Posted at 10:43 AM Tagged: , , , , ,
On Friday (3/27/2020), the President officially signed into law an additional stimulus bill referred to as the CARES Act (Coronavirus Aid, Relief and Economic Security Act).

The bill includes:
 
  • Direct dollars to Americans (up to $1,200 per adult and $500 per child for individuals that make less than $75,000, ($150,000 for a couple) decreasing until an individual makes $100,000 and a couple make $200,000)
  • Enhanced unemployment benefits – $600 per week in benefits over the state allocation for four months
  • $367 billion for small businesses
  • $500 billion for large businesses
  • $150 billion for state and local governments
  • $130 billion for hospitals and medical providers
  • $30 billion for education payments
  • $25 billion for transit districts
  • $339 billion for federal agency programs of which the vast majority goes out through state and local governments

Key Legislative Provisions

  • The Paycheck Protection Program (the $367 billion for small businesses) – This program is designed to preserve small businesses and the paychecks of small business employees. The definition of small businesses is broad. It includes businesses and non-profit institutions that employ 500 or less.
  • Importantly, the law defines that small businesses that are located in more than one location can count each location as a separate small business, for certain industries. The bill allows businesses to borrow up to 250% of its average monthly payroll costs as long as the business can show that it was in existence on February 15th. The maximum loan is $10 million. If the borrowing firm maintains its payroll, and if the funds are used for payroll, benefits, mortgage payments or rent and utilities, the loan may be forgiven, and the Small Business Administration will pay the loan back.
  • Unemployment Benefits – In the U.S., unemployment programs are run by the states. The states administer the programs and the states set the benefits levels. The CARES Act continues to run the programs through the states but makes a number of changes. First, in the past, the unemployed had to wait a week to get benefits. The CARES Act waives that. Second, the bill increases the payments by $600 a week over the state set amount. This increased amount will run for four months.
  • The CARES Act provides the above mentioned $1,200 per person ($2,400 per couple) and $500 per child to individuals and families under the income guidelines.
  • The bill waives the 10% penalty for early withdrawals from retirement accounts.
  • The bill changes the charitable deduction laws. Taxpayers can deduct up to $300 in contributions even if they do not itemize their deductions.
  • The bill provides that there will be no costs for Coronavirus tests.
  • The bill allocates $500 billion for loans for larger businesses. The funds are administered by the Treasury. The money is only for loans and there are restrictions for firms that accept the loans. The loans run 5 years.
  • The bill allows firms to delay the payment of employer social security payroll taxes until the end of the year. The funds must be repaid – one half by the end of 2021 and the rest by the end of 2022.
  • The bill provides for a refundable payroll tax credit of wages paid by employers whose operations were suspended by the virus or whose gross receipts declined by 50 percent for the first $10,000 of wages.

CARES Act Expands Usages for HSAs, FSAs, and HRAs

- Posted at 10:35 AM Tagged: , , , , ,

The Coronavirus Aid, Relief, and Economic Security Act (CARES ACT) was signed into law by the President on Friday.

There are three direct inclusions that immediately expand the usage of health savings accounts (HSA), flexible spending accounts (FSA), and health reimbursement arrangements (HRA) for employees.

1. Telehealth services can now be covered pre-deductible under a High Deductible Health Plan. The end date of this provision is Dec 21, 2021.

2. Over the counter (OTC) drugs and medicines are now eligible for reimbursement from an HSA, FSA or HRA. This is a permanent change.

3. Menstrual products are now eligible for reimbursement from an HSA, FSA or HRA. This is a permanent change.

DOL Throws COVID-19 Curveball In Latest Guidance Suggesting Shut Down Employees Won’t Qualify For Leave

- Posted at 10:19 AM Tagged: , , , , , , , , , ,

The Department of Labor (DOL) continues to update its guidance document on implementation of the Families First Coronavirus Response Act (FFCRA), and the latest update caught many employers by surprise. The updated document released by the agency appears to suggest that employees who cannot work because their businesses are subject to a government shutdown order or they are ordered to shelter at home will not qualify for Emergency Paid Sick Leave or Emergency FMLA. This clarification should now be integrated into employers’ plans for developing best practices and compliance tools to deal with the rapidly changing situation.

Last week, the DOL issued FAQs that covered the effective date of the FFCRA (April 1), how to calculate whether your business meets the 500-employee threshold, whether the law will be retroactive in nature, and how the Emergency FMLA and Emergency Paid Sick Leave provisions should be applied in leave situations caused by school closures. In the latest update, DOL covered several additional issues you will want to review to ensure compliance. 

Employees Forced Home By Shutdown Orders Alone Excluded From Paid Leave?

The DOL’s guidance appears to suggest that if employers send home workers and stop paying them, these workers are not entitled to paid sick leave or expanded family and medical leave if the “employer closes [the] worksite for lack of business or because it is required to close pursuant to a Federal, State, or local directive.” This would be true whether the closure occurs before or after April 1st, the effective date of the law, and even if workers requested leave prior to the closure.

Similarly, if an employer closes its business while workers are already out on Emergency Paid Sick Leave or Emergency FMLA, it must still pay for any paid sick leave or expanded family and medical leave used before the closure, but it has no further obligation to provide Emergency Paid Sick Leave or Emergency FMLA as of the date of the closure.

Instead, the agency directs workers to determine whether they are eligible for unemployment insurance benefits, pointing them to their state workforce agency or unemployment insurance office for specific eligibility questions. The guidance also reminds workers that they will not be eligible for unemployment insurance if their employer is still paying them pursuant to a paid leave policy or state or local requirements.

Furlough v. Layoff: Distinction Without A Difference?

Questions have also been raised over the difference between “furloughs” and “layoffs.” For purposes of paid sick leave or emergency family and medical leave, DOL’s updated comments appear to suggest that the agency equates “furlough” to any layoff where employees are no longer working. And, as explained above, furloughed employees are not entitled to Emergency Paid Sick Leave or Emergency FMLA regardless of whether their employment has officially ended.

Certification Confusion

As of late Thursday (3/26/2020), the FAQs posted on the DOL’s website instructed all employers to maintain detailed documentation about any Emergency Paid Sick Leave or Emergency FMLA taken by their workers in order to later prove eligibility for tax credit reimbursement. But, by late Friday evening (3/27/2020), the answer changed. The DOL now says employers must collect documentation in support of leave “as specified in applicable IRS forms, instructions, and information.” To date, the IRS has not yet released any such certification forms.

The DOL also says that employers can require workers to provide additional documentation in support of Emergency FMLA taken to care for children whose school or place of care is closed, or if a child care provider is unavailable, due to COVID-19-related reasons.  This could include a notice of closure or unavailability from a school, place of care, or child care provider, including a notice that may have been posted on a government, school, or day care website, published in a newspaper, or emailed from an employee or official of the school, place of care, or child care provider.  

The Reality Of Telework

The DOL also provided a series of questions and answers addressing the increasing reality of compulsory telework around the nation and its interplay with FFCRA benefits. The agency indicates that employers can adjust typical work schedules to accommodate remote workers, and so long as the employees are able work their regularly scheduled hours, such workers would not be eligible for Emergency FMLA or Emergency Paid Sick Leave.

But, if a worker is unable to work remotely or otherwise perform work the required hours because of one of the qualifying reasons, then the employee would be entitled to take Emergency Paid Sick Leave. Similarly, if because of COVID-19 related reasons an employee is unable to perform teleworking tasks or work the required teleworking hours because of a need to care for a child whose school or place of care is closed, the worker would be entitled to take Emergency FMLA.

Intermittent Leave

Finally, the DOL confirmed that employees may be able to take Emergency FMLA or Emergency Paid Sick Leave intermittently while teleworking – if the employer agrees. If an employee is unable to telework their normal schedule of hours due to one of the qualifying reasons in the Emergency Paid Sick Leave Act, an employer may agree to allow an employee to take paid sick leave on an intermittent basis while teleworking. Similarly, if someone is prevented from teleworking their normal schedule of hours because they need to care for a child whose school or place of care is closed, or their child care provider is unavailable because of COVID-19 related reasons, an employer may allow the employee to take Emergency FMLA leave intermittently while teleworking.

Intermittent leave can be taken in any increment, provided that the employer and employee agree. For example, if you agree on a 90-minute increment, an employee could telework from 1:00 PM to 2:30 PM, take leave from 2:30 PM to 4:00 PM, and then return to teleworking. “The Department encourages employers and employees to collaborate to achieve flexibility and meet mutual needs,” the DOL’s updated Q&A says, “and the Department is supportive of such voluntary arrangements that combine telework and intermittent leave.”

As for intermittent leave for those workers able to work at a job site, this would depend on the reason the employee is taking the leave and whether the employer agrees. Emergency Paid Sick Leave in non-telework situations must be taken in full-day increments. It cannot be taken intermittently if the leave is being taken because an employee:

  • Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • Is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • Is caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
  • Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

Once paid sick leave for one or more of these qualifying reasons begins in a non-teleworking situation, employees must continue to take paid sick leave each day until they either (1) use the full amount of paid sick leave or (2) no longer have a qualifying reason for taking paid sick leave. This limit is imposed because FFRCA’s intent is to provide such paid sick leave as necessary to keep you from spreading the virus to others.

However, if an employee and employer agree in non-telework situations, Emergency Paid Sick Leave can be taken intermittently to care for a child whose school or place of care is closed, or whose child care provider is unavailable, because of COVID-19 related reasons. Similarly, Emergency FMLA can be available in such a situation with an employer’s permission and when an employer can agree upon such a schedule with a worker.

Conclusion

While much confusion remains, and further clarity on these and other points will need to be made by DOL, this updated guidance begins to flesh out some of the more complicated issues that have been vexing those employers trying to figure out how to comply with the new law come April 1, 2020. Still, you should expect further revisions and clarifications as the agency – and employers – begin the process of implementing this unprecedented, new law. You should not be surprised if you see the FP COVID-19 Taskforce publish additional explanations on this and other aspects of the CARES Act.

We will continue to monitor the rapidly developing COVID-19 situation and provide updates as appropriate.

Remote Work in Times of Crisis: 3 Threats to Employee Engagement

March 27 - Posted at 2:08 PM Tagged: , , , , , ,

Did you know that the number of remote workers has grown by 140% since 2005? And with the current COVID-19 situation, even more people are working remote if even temporarily. Now consider this: 80% of employees reported they’d be more loyal if they had more flexible work options, such as working from home. These numbers prove my point: Remote work has tremendous value for both employees and organizations—and it’s here to stay.

But for all its rose-colored benefits, remote work has some pitfalls that can take a toll on employee satisfaction, productivity, collaboration, and engagement. This is especially true amid the current coronavirus pandemic.

Many businesses find themselves in a unique situation. Large workforces, who have traditionally worked full time at physical offices, have now been mandated by HR to work remotely for extended periods of time (some for 2 weeks and others for at least 1 month, possibly longer)—and rightfully so given the current situation. 

This is an opportunity for HR teams to inform, communicate, and nurture their newly remote workers through this new landscape and give them the resources and tools to be as productive, engaged, and collaborative as possible.

Threat #1

Social isolation can breed loneliness. And loneliness can spur disengagement.

Employees crave human contact and interactions. One of the great benefits of going into an office every day is the relationships with colleagues. Office workers sit together for lunch (or go out to restaurants together); they share personal stories about their social experiences, families, and friends; they tell each other jokes; and they even share photos and videos from holidays, social outings, and more.

But when regular and meaningful human interactions are suddenly taken away, it can be hard for employees.

In light of the coronavirus pandemic, many business executives have been asking employees to embrace the practice of “social distancing” right now for the sake of keeping employees safe and healthy.

But that’s inevitably going to lead to feelings of loneliness. This is supported by the findings of Buffer’s 2019 State of Work report, which found that 19% of the surveyed remote workers struggled with loneliness. This can, in turn, take a toll on employees’ mental health and well-being.

Now consider this: According to a meta-analysis coauthored by Julianne Holt-Lunstad, PhD, a professor of psychology and neuroscience at Brigham Young University, loneliness and social isolation are twice as harmful to physical and mental health as obesity.

How to tackle it: 

  • Take several breaks throughout the day so you can be refreshed and re-energized to do great work.
  • Keep the camera turned on when using video conferencing tools.
  • Disconnect (both mentally and digitally) when the workday has ended. That means enabling the “Do Not Disturb” feature on your mobile devices and apps you regularly use like Slack.
  • Don’t be afraid to set up online one-on-one meetings with colleagues just to catch up (without a specific business purpose).
  • Get more personal during one-on-one meetings with teammates. Instead of jumping straight into work-speak, make a concerted effort to spend the first 10 minutes just catching up personally and talking about current events.

Threat #2

Distractions are everywhere, making it hard to stay productive.

In a home setting, the types and number of distractions multiply drastically from those employees might find in office environments. No one is sitting nearby to hold employees accountable. It can be so tempting for employees to watch online videos, scroll through Facebook and Instagram to see what friends are up to, and hop on personal phone calls with friends and family.

A big part of hiring smart people is instilling trust in them to do great work and be responsible for meeting their goals. So instead of panicking about the sudden shift to full-time remote work (or taking on a “Big Brother” mentality/approach to managing them), give employees the necessary technology and digital tools to be as productive as possible. They’ll thank you for it.

How to tackle it:

  • Create a schedule, and stick to it. Accept the meetings that are time-critical and impact-related first. Add in additional meetings as they make sense.
  • Don’t send employees messages or requests outside of regular working hours (even if they are at home). And make sure managers are cognizant of scheduling meeting times that would be inconvenient and cut into their early mornings/evenings. You’d be surprised by how often this actually happens, according to a recent Work-Life Survey.
  • Integrate internal communications tools, like Slack, your employees already use on a daily basis into your scheduling software.
  • Be strategic with time management. Implement time blocking within calendars (to focus on key projects for specified periods of time and avoid wasteful meetings).

Threat #3

Social distancing can cause misunderstandings and breakdowns in communication. 

There’s an art to effective, engaging communication. It’s hard enough to do when your employees are standing (or sitting) face-to-face with colleagues, teammates, customers, partners, and other stakeholders. So as large workforces now set out to work remotely full time for a prolonged period of time, communication will get even trickier.

What will likely ensue are misunderstandings, miscommunication about project expectations/deliverables, and possibly even performance issues. Those can lead to tension and animosity among coworkers, which will inevitably give employees more reasons to avoid, or even cancel, meetings that are necessary to brainstorm, innovate, manage projects, and deliver business results. No business wants these outcomes.

How to tackle it:

  • Enable the video functionality when holding virtual meetings. Facial expressions and body language can say a lot and work wonders to establish personal, human connections with team members, colleagues, and even clients.
  • Be selective in who you invite (and keep group meetings to smaller sizes). Elon Musk has a critical rule for running efficient meetings: If a person isn’t adding value, he or she doesn’t need to be there.
  • Be mindful of other people’s times, and be punctual to scheduled meetings.
  • If you want meetings to run smoothly (and have the desired input and action items), make sure to ask participants the necessary questions ahead of the meeting.

 

Families First Coronavirus Response Act- DOL Poster

March 26 - Posted at 8:55 AM Tagged: , , , ,
The Department of Labor published a Families First Coronavirus Response Act (FFCRA) notice that employers with fewer than 500 employees are required to post.  You can download a copy of the poster here.

When sharing electronically with employees, you may wish to remind them that it does not currently appear that county-required “stay at home” orders qualify as a “quarantine or isolation order”. 

Below we have included the 13 Q&As that were put out by the DOL in relation to the FFCRA poster. 

  1. Where do I post this notice? Since most of my workforce is teleworking, where do I electronically “post” this notice?

    Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

  2. Do I have to post this notice in other languages that my employees speak? Where can I get the notice in other languages?

    You are not required to post this notice in multiple languages, but the Department of Labor (Department) is working to translate it into other languages.

  3. Do I have to share this notice with recently laid-off individuals?

    No, the FFCRA requirements explained on this notice apply only to current employees.

  4. Do I have to share this notice with new job applicants?

    No, the FFRCA requirements apply only to current employees. Employers are under no obligation to provide the notice of those requirements to prospective employees.

  5. Do I have to give notice of the FFCRA requirements to new hires?

    Yes, if you hire a job applicant, you must convey this notice to them, either by email, direct mail, or by posting this notice on the premises or on an employee information internal or external website.

  6. If my state provides greater protections than the FFCRA, do I still have to post this notice?

    Yes, all covered employers must post this notice regardless of whether their state requires greater protections. The employer must comply with both federal and state law.

  7. I am a small business owner. Do I have to post this notice?

    Yes. All employers covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA (i.e., certain public sector employers and private sector employers with fewer than 500 employees) are required to post this notice.

  8. How do I know if I have the most up-to-date notice? Will there be updates to this notice in the future?

    The most recent version of this notice was issued on March 25, 2020. Check the Wage and Hour Division’s website or sign up for Key News Alerts to ensure that you remain current with all notice requirements: www.dol.gov/agencies/whd.

  9. Our employees must report to our main office headquarters each morning and then go off to work at our different worksite locations. Do we have to post this notice at all of our different worksite locations?

    The notice needs to be displayed in a conspicuous place where employees can see it. If they are able to see it at the main office, it is not necessary to display the notice at your different worksite locations.

  10. Do I have to pay for notices?

    No. To obtain notices free of charge, contact the Department’s Wage and Hour Division at 1-866-4-USWAGE (1-866-487-9243). Alternatively, you may download and print the notice yourself from https://www.dol.gov/agencies/whd/posters
     
  11. I am running out of wall space. Can I put the required notices in a binder that I put on the wall?

    No, you cannot put federal notices in a binder. Generally, employers must display federal notices in a conspicuous place where they are easily visible to all employees—the intended audience.

  12. We have break rooms on each floor in our building. Do I have to post notices in each break room on each floor or can I just post them in the lunchroom?

    If all of your employees regularly visit the lunchroom, then you can post all required notices there. If not, then you can post the notices in the break rooms on each floor or in another location where they can easily be seen by employees on each floor.

  13. Our company has many buildings. Our employees report directly to the building where they work, and there is no requirement that they first report to our main office or headquarters prior to commencing work. Do I have to post this notice in each of our buildings?

    Yes. Where an employer has employees reporting directly to work in several different buildings, the employer must post all required federal notices in each building, even if the buildings are located in the same general vicinity (e.g., in an industrial park or on a campus).
Update 3/27/2020- The DOL has issued additional FAQs (which now total 37 Q&A) on how the paid sick leave and expanded FMLA leave under FFCRA will apply. To view the full updated list of FAQ click here. 

FFCRA Poster & Update

- Posted at 8:00 AM Tagged: , , , , , , , , , ,
Two items to bring to your attention today:

1. Latest COVID-19 relief bill was passed by Senate last  night. This bill was passed to help funnel funds into the US economy to assist workers and businesses survive the pandemic. The bill has not yet passed the House or been signed by the President. We are working on a summary of key points and will get those out once it’s though the house.

2. FFCRA Poster- The DOL published a Families First    Coronavirus Response Act notice you are required to post. You can download the poster here. 
 
When sharing electronically with staff, you may wish to remind them that it does not currently appear that county-required “stay at home” requirements qualify as a “quarantine or isolation order”. 
 
 Below we condensed and included some of the questions & answers the DOL provided regarding the posting.  Call us with any questions. 
 
Q. Where do I post this notice? If most of my workforce is teleworking, do I electronically “post” this notice?
 
Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.
 
Q. Do I have to post this notice in other languages that my employees speak? Where can I get the notice in other languages?
 
You are not required to post this notice in multiple languages, but the Department of Labor (Department) is working to translate it into other languages.
 
Q. Do I have to share this notice with recently laid-off individuals or new applicants?
 
No, the FFCRA requirements explained on this notice apply only to current employees, including new hires.
 
Q. I am a small business owner. Do I have to post this notice?
 
Yes. All employers covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA (i.e., certain public sector employers and private sector employers with fewer than 500 employees) are required to post this notice.
 
Q. Our employees must report to our main office headquarters each morning and then go off to work at our different worksite locations.  Do we have to post this notice at all of our different worksite locations?
 
The notice needs to be displayed in a conspicuous place where employees can see it. If they are able to see it at the main office, it is not necessary to display the notice at your different worksite locations.

Q. Our company has many buildings. Our employees report directly to the building where they work, and there is no requirement that they first report to our main office prior to commencing work. Do I have to post this notice in each of our buildings?

Yes. Where an employer has employees reporting directly to work in several different buildings, the employer must post all required federal notices in each building, even if the buildings are located in the same general vicinity (e.g., in an industrial park or on a campus).

Labor Department Offers Guidance On Families First Coronavirus Response Act, Effective As Of April 1

March 25 - Posted at 1:54 PM Tagged: , , , , , , , ,

The U.S. Department of Labor released a preliminary “Questions and Answers” page today, attempting to answer some preliminary compliance questions related to the new Families First Coronavirus Response Act, which will bring emergency family and medical leave, as well as paid sick leave, for many employers across the country. The agency stated it also will be issuing implementing regulations regarding the new law in the near future. The big news is that the law will take effect April 1, 2020 – not April 2 as originally expected – but there are also plenty of other helpful pieces of information in the document. What do employers need to know about this latest development? 

Not An April Fool’s Joke: Law Effective April 1, 2020

As a major surprise, the Department of Labor (DOL) announced the paid leave provisions of the Families First Coronavirus Response Act (FFCRA) are effective on April 1, 2020 and will apply to leave taken between April 1, 2020 and December 31, 2020.

This effective date took many by surprise. The FFCRA states the leave provisions “shall take effect not later than 15 days after the date of enactment.” As the FFCRA was signed by President Trump on March 18, 2020, many assumed DOL would implement the law on April 2, 2020.

The DOL gave no reason why it chose to move up implementation by one day, but there is speculation this was done to line up the effective date of the law with the calendar quarter.

How Do You Count To 500?

Both leave provisions of the FFCRA apply to private employers with fewer than 500 employees. One of the most common questions for employers regarding the FFCRA involves uncertainty as to how and when you count employees for these purposes, and when you consider separate entities to be a single employer for these purposes. The DOL’s Questions and Answers attempt to address the following by stating:

You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and 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). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold.

Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a 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. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.

In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.

Therefore, the DOL provides the opinion that an employer is covered if, at the time the leave is to be taken (a “snapshot” approach), the business employs fewer than 500 employees.  Moreover, the analysis addresses important issues regarding whether separate entities are counted as one employer for purposes of the new leave laws. First, the DOL states that if two entities are found to be “joint employers” under the FLSA, all of their common employees must be counted in determining whether leave must be provided under for Emergency Paid Sick Leave and Emergency Family and Medical Leave.

The DOL document also states that if two entities are an “integrated employer” under the Family Medical Leave Act (FMLA), all of the employees of the integrated employer will be counted in determining employer coverage for purposes of Emergency Family and Medical Leave.

The “joint employer” analysis under the FLSA and the “integrated employer” analysis under the FMLA are complicated and involve a critical analysis of specific facts. Employers with questions about how these tests may apply to their specific situation should reach out for legal opinion.

Is The FFCRA Retroactive?

Another common inquiry was whether employees can take paid sick leave under the FFCRA prior to the effective date (that would count towards their FFCRA paid sick leave entitlement), and whether the law will have retroactive effect. The DOL attempted to address these issues by stating:

Can my employer deny me paid sick leave if my employer gave me paid leave for a reason identified in the Emergency Paid Sick Leave Act prior to the Act going into effect?

No. The Emergency Paid Sick Leave Act imposes a new leave requirement on employers that is effective beginning on April 1, 2020.

Are the paid sick leave and expanded family and medical leave requirements retroactive?

No.

Does Emergency Paid Sick Leave And Emergency FMLA Run Concurrently For Leave Related To School Closures?

The qualifying reason for leave under the Emergency FMLA involves caring for a child when their school or place of care is closed. One of the six qualifying reasons for Emergency Paid Sick Leave similarly addresses this same reason. Therefore, many employers have inquired as to whether these leaves will run concurrently when taken for the same qualifying reason. The DOL addressed this issue when it stated:

If I am home with my child because his or her school or place of care is closed, or child care provider is unavailable, do I get paid sick leave, expanded family and medical leave, or both—how do they interact?

You may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. You may take both paid sick leave and expanded family and medical leave to care for your child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons. The Emergency Paid Sick Leave Act provides for an initial two weeks of paid leave. This period thus covers the first ten workdays of expanded family and medical leave, which are otherwise unpaid under the Emergency and Family Medical Leave Expansion Act unless the you elect to use existing vacation, personal, or medical or sick leave under your employer’s policy. After the first ten workdays have elapsed, you will receive 2/3 of your regular rate of pay for the hours you would have been scheduled to work in the subsequent ten weeks under the Emergency and Family Medical Leave Expansion Act.

Next Steps

Employers should note that this is an initial and informal compliance assistance document from DOL. These answers may change or be added to over time. Moreover, the DOL will be developing more formal guidance and regulations that may definitively answer these questions and may do so in a different manner. Nevertheless, this preliminary “Questions and Answers” document may give some indication about how the agency is likely to formally interpret and enforce the new law in the near future.

We will continue to monitor the rapidly developing COVID-19 situation and provide updates as appropriate. 

Stay At Home Orders & FFCRA Update

- Posted at 10:00 AM Tagged: , , , , , , ,
Many counties are issuing “stay at home” orders where only businesses deemed as “essential” can continue remain open. These lists of “essential” businesses are not uniform from county to county so you will need to check your county’s Emergency Executive Order to determine if your business would qualify as “essential” or not. We have a copy of the Orange County, Florida Executive Order that was signed yesterday (3/24/2020) and will continue to obtain copies from other counties as those are signed/passed.

If your business is deemed as “essential”, we also have sample letters you can provide to employees to use for travel. Please let us know if you need copies of these samples for use.

If your business qualifies as “essential”, push the fact that you are staying open as a positive. Make sure each employee understands that you are trying to keep them working and getting paid as long as you can so they can take care of their families. Under the Families First Coronavirus Response Act (FFCRA), the paid leave does not take effect until April 1st so anyone not working prior to 4/1 will not be eligible for payments under the FFCRA. 

Attached is an update to the presentation we sent out last week when the FFCRA was first passed with changes included.  You can access the updated presentation   here.

You may have heard the Senate stuck a deal late last night on an additional relief bill, but it still has not yet passed the House. More details on the provisions of this bill will be forthcoming once it is signed into law by the President.

What Employers Need to Know About the Families First Coronavirus Response Act

March 19 - Posted at 2:14 PM Tagged: , , , , , , , ,

The afternoon of March 18, 2020, the Senate passed H.R. 6201, the Families First Coronavirus Response Act. Division C of the Bill details the Emergency Family and Medical Leave Expansion Act, and Division E provides additional protections under the Emergency Paid Sick Leave Act. Both divisions apply to employers with fewer than 500 employees.

At a high level, these laws work together so that, under the Emergency Paid Sick Leave Act, qualifying employees will receive 80 hours of paid leave for immediate use, then they will received paid leave at two-thirds of the employee’s wages for the duration of a COVID-19 related Family and Medical Leave Act leave.

Key provisions of both laws are described below.

Emergency Family and Medical Leave Expansion Act (Effective 15 days after enactment)

This statute provides for additional benefits under the FMLA so that eligible employees will receive job protection and a paid component for certain COVID-19-related absences.

Which employers are covered? 

Employers with fewer than 500 employees are subject to the expansion. Part-time employees are included in this count to assess coverage.

The Secretary of Labor has authority “for good cause” to exempt (1) certain healthcare providers and emergency responders; and (2) small employers with fewer than 50 employees where the added expense would jeopardize the business. Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

Additionally, an employer of employees who are healthcare providers or emergency responders may exclude these employees.

As a practical matter, larger employers that break up their workforce across smaller employing entities should review the respective employee populations for each entity to determine whether the expansion will apply to that population. In making this decision, consider what company is listed as the employer on an employee’s pay statement or review each Employer Identification Number separately.

Which employees are eligible?

Employees who have been employed for at least 30 calendar days will qualify for leave. Notably, the other FMLA employee eligibility requirements (e.g., hours worked) do not apply here.

Employers appear to have the discretion to exclude healthcare providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

What events will trigger coverage?

Employees who are unable to telework may use this leave if they must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

How does paid leave apply?

The first ten (10) days of FMLA leave may be unpaid (but see the Emergency Paid Sick Leave Act provisions, below).  Employees may elect to use their accrued vacation, personal or sick leave to cover this window, but employers may not require it. After this initial period, the employer will be required to pay at least two-thirds of an employee’s regular wages, according to their normally scheduled hours.

Payment is capped at $200 per day and $10,000 total for the duration of the leave.

The statute provides a formula for calculating payments for employees with varying or irregular schedules.

The expansion allows for up to twelve (12) weeks of coverage for all eligible employees in addition to the initial 10-day supplement provided by the Act.

Emergency Paid Sick Leave Act (Effective 15 days after enactment)

This statute provides for immediate use of up to 80 hours of paid leave for eligible employees, in addition to any other leave policies afforded by the employer.

Which employers are covered?

Employers with fewer than 500 employees are subject to the statute.  Part-time employees are included in this count to assess coverage.

The Secretary of Labor has authority to exempt (1) certain healthcare providers and emergency responders; (2) small employers with fewer than 50 employees where the added expense would jeopardize the business.  Under certain circumstances, the requirement to restore employees to their employment will not apply to businesses with fewer than 25 employees.

Which employees are eligible?

All employees, full and part-time, are covered. Unlike the FMLA expansion, there is no tenure requirement.

However, an employer of employees who are healthcare providers or emergency responders may exclude these employees. Employers appear to have the discretion to exclude health care providers and emergency responders, though this language of the statute is in tension with the delegation of rulemaking authority to the Secretary of Labor to determine such exemptions.

When can employees take leave?

Immediately.  There is no accrual or waiting period.

What events will trigger coverage?

Employees who are unable to telework may use this leave for COVID-19 related medical leave, including self-isolation due to a positive COVID-19 diagnosis; obtaining a medical diagnosis or care if the employee is experiencing coronavirus symptoms; complying with a recommendation or order of a public health official or healthcare provider; caring for a family member who is self-isolating because of a positive diagnosis or experiencing coronavirus symptoms; or is experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor.

As with the FMLA component above, coverage will also be triggered where an employee must care for a child following the closure of a school or daycare, or other unavailability of childcare due to the coronavirus.

How does paid leave apply?  

Full-time employees are entitled to 80 hours of paid leave. For part-time employees, employers should use the employee’s average weekly hours over a two-week period. State and local minimum wage rates are automatically adopted for calculating payments if they are higher than the employee’s effective hourly rate.

Payment is capped at $511 per day or $5111 in the aggregate if the employee is home due to any qualifying reason listed above other than school closure or care for an ill family member under specific circumstances. Payment is capped at $200 per day or $2000 in the aggregate if the employee is home caring for a family member with the virus or due to a child’s school closure.

How does the statute interact with state and local law?

This leave is to be given in addition to any required paid leave provided by state or local law.

Does this paid leave ever expire?

Yes. Leave will automatically expire on December 31, 2020 and cannot be carried over into the following calendar year.

What happens if an employer violates the Act?

Failure to pay sick leave will be treated as a minimum wage violation under the Fair Labor Standards Act (FLSA). Remedies for a private cause of action include unpaid wages, liquidated damages (double damages), attorneys’ fees and costs. Employers should be conscious of the heightened risk for a collective action for failure to comply, as well as the potential for personal liability for owners, corporate officers, and other supervisors provided by the FLSA.

Discrimination or retaliation against employees who take leave under the Act or file a complaint relating to the Act is also prohibited. Employers contemplating cost saving measures, including a reduction in force, layoff, or hours reduction, against employees availing themselves to this benefit are strongly encouraged to seek legal counsel to assess risk.

How do employers alert their employees of the Act?

Within seven days from enactment, the Secretary of Labor will provide a model notice to be posted in areas that are readily accessible to employees (e.g., kitchens and breakrooms). We anticipate direct notice might also be required in the form of an email or letter.

Refundable Payroll Tax Credits for Paid Leave (Effective 15 days after enactment)

The statute also provides for refundable payroll tax credits through 2020 for employers that provide paid leave in accordance with either the Emergency Family and Medical Leave Expansion Act or the Emergency Paid Sick Leave Act.

How is the tax credit determined?

Section 7001 of the act provides a tax credit for the cost of paid leave provided under the Emergency Paid Sick Leave Act. Section 7003 of the act provides a similar tax credit for the cost of paid leave provided under the Emergency Family and Medical Leave Expansion Act.

Both credits are applied against section 3111(a) or 3221(a) of the Internal Revenue Code, which imposes the employer portion of Social Security and Medicare (FICA) taxes.  Accordingly, even employers that do not pay income tax may benefit from the credit.  The credits are refundable to the employer.

Section 7001 permits a tax credit for up to 10 days of paid leave per employee under the Emergency Paid Sick Leave Act in the amount of up to (a) $511 per day for amounts paid to employees who must self-isolate, obtain a diagnosis, or comply with medical advice regarding a COVID-19 diagnosis, or (b) up to $200 per day for employees on paid leave due to caring for a family member or for a child due to school closures or unavailability of care.  In addition, employers may obtain a credit for “qualified health plan expenses” that are allocable to providing qualified paid sick leave determined above.

Section 7003 provides a similar tax credit for paid leave under the Emergency Family and Medical Leave Expansion Act, but that credit is limited to $200 per day and an aggregate of $10,000.  A credit is also available for the cost of providing qualified health plan expenses allocable to providing the qualified family leave determined above.

Similar refundable tax credits are available for self-employed workers.

When does the tax credit apply?

The tax credit applies only to paid wages beginning on the effective date of the law (15 days after its enactment), and will expire on December 31, 2020. The Internal Revenue Service (IRS) is expressly empowered to issue additional guidance implementing these changes, and the bill includes additional funding reserved to the IRS for this purpose.

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As with any new legislation, the Act will result in a lot of unanswered questions regarding implementation.  We will continue to make available guidance as it becomes available. 

Families First Coronavirus Response Act Update

- Posted at 9:00 AM Tagged: , ,
The President signed into law the Families First Coronavirus Respose Act late on March 18th. 
 
Attached is a summary of the 2 paid leave acts that will apply to employers once it officially takes effect no later than April 2nd.
You can access a summary recap of the acts  here. 
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