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The Feds Are Coming, Is Your Business Ready? Part 2: FFCRA

June 14 - Posted at 9:00 AM Tagged: , , , , , ,

This is the second in our four-part series designed to let you know what changes have taken place that may affect your business. AAG is a benefit brokerage that specializes in working alongside an employer’s Human Resource/Management Team to assist with keeping companies in compliance with the ever-changing state and federal regulations. 

The Family First Coronavirus Response Act (FFCRA) was amended earlier this year under the American Rescue Plan Act (“ARPA”). The amended act encompasses the same covered categories as the Federal law required last year with some expansions, options, and more room for abuse. 

If you are a private employer with less than 500 employees, you have the option to voluntarily extend FFCRA paid leave from April 1, 2021 through September 30, 2021 and receive a tax credit. However, you must proceed with caution because the rules have changed and if not followed you may not be eligible for the tax credit.

In addition to the previous six reasons for emergency paid sick leave (EPSL) under the FFCRA, if an employer chooses to offer, you must allow for the following three reasons:

  • An employee seeking or awaiting results of a COVID-19 test or diagnosis;
  • An employee obtaining a COVID-19 vaccine;
  • An employee recovering from an injury, disability, illness, or condition related to the COVID-19 vaccine.

The change also includes 10 new days of available leave effective April 1, 2021. If an employee took 80 hours of EPSL leave prior to April 1st, they will be eligible for a new bank of paid leave after April 1, 2021. 

The emergency family medical leave (EFML) under the FFCRA also has some key changes to be aware of:

  • Includes “all” of the EPSL reasons for leave, including the 3 additional reasons
  • Expanded to include the first 10 days of leave and increases the maximum paid leave over 12 weeks from $10,000 to $12,000

Employers will not have the option of whether to apply the new reasons for leave or the fresh 10-day bank. Should you decide to offer EPSL to employees, it must be offered completely and available to all employees. Strict compliance is required in order to be eligible for the tax credit.

As the world continues to open and more employees return to work, changes to these paid leave revisions will no doubt continue. With AAG on your side, you can focus on your employees while we stay on top of required changes and keep you informed! If you have any questions or would like additional information please reach out, we are here to help!

What Employers Need To Know About Biden’s American Rescue Plan

March 11 - Posted at 9:06 AM Tagged: , , , , , , , , , , , , , , , , , ,

President Biden’s latest COVID-19 stimulus package – the American Rescue Plan – has been passed by Congress and will become law once the president signs it into effect this Friday (3/12/21). The measure provides $1.9 trillion in economic relief, with many of the specific items directly affecting employers. What do businesses need to know about this finalized legislation?

What Is Not Included In The American Rescue Plan?

Before examining the areas of law that changed, it is just as important to review portions of the initial proposal which were not included in the final version signed by the president. The three most critical pieces NOT included:

  • $15 Minimum Wage: Despite House passage of a bill including a minimum wage hike and efforts by Senator Bernie Sanders and others, the Senate (with bipartisan support) removed the minimum wage provisions from the American Rescue Plan before sending it to Biden for signature.
  • Elimination of Tip Credit: Though it has gotten little press, buried in the provisions to raise the minimum wage was language which would have phased the tip credit out of existence. Hospitality employers hope this is more than a temporary reprieve.
  • Paid Leave: The White House originally planned for the plan to include paid leave for employees needing to be absent for COVID-19 reasons, including to get vaccinated or to recover from side effects related to the vaccination. These paid leave benefits were not included in the House bill and were not added as the bill proceeded.

What You Should Do: While these provisions did not make it into the final American Rescue Plan, the White House and Democratic leaders have stated their intent to introduce new legislation in the future to fulfill these campaign promises.

Extension Of FFCRA Tax Credits

The federal Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020 – and with it, covered employers’ obligation to provide emergency paid sick leave and emergency family and medical leave. Shortly before the end of the year, Congress extended the tax credit for employers who voluntarily continued to provide such paid leave through March 31, 2021. 

President Biden’s original vision for the American Rescue Plan proposed to extend and expand emergency paid leave obligations in several key areas. However, the House version of the current COVID-19 relief bill does not extend the employer obligation to provide paid leave. Instead, the legislation merely extends the tax credit for voluntary provision of leave through September 30, 2021 and makes related changes. These provisions of the relief bill include the following:

  • Extends the tax credits available for employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021.
  • Provides that the tax credits are available for paid sick leave and paid family leave provided for the additional following qualifying reasons:
    • the employee is obtaining immunization (vaccination) related to COVID-19;
    • the employee is recovering from any injury, disability, illness or condition related to such vaccination; or
    • the employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 (or their employer has requested such a test or diagnosis).
  • Adds non-discrimination rules to provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. This provision appears designed to compel employers who make the decision to voluntarily provide leave do so in a uniform manner, without discriminating against certain categories of workers.
  • Re-sets the 10-day limit for the tax credit for paid sick leave under the FFCRA beginning April 1, 2021. As a result, an employer could voluntarily provide an additional 10 days of FFCRA paid sick leave beginning April 1, 2021, and would be eligible for a tax credit for doing so. But employers are not required to do so.

Even though the current legislation does not extend the employer mandate to provide paid FFCRA leave, this is likely not the last conversation on this topic. There are indications that the Biden administration may attempt to resurrect pieces of the American Rescue Plan that did not make it into this bill into subsequent legislation in the near future.  

What You Should Do: Determine which, if any, state and local paid sick leave laws may apply to you as many have been extended beyond the December 31, 2020 expiration of the FFCRA paid leave mandate. In addition, you should continue to monitor developments at the federal level. Although an extension of paid leave was not included in this stimulus package, it is still on the Biden administration’s and many members of Congress’s “to do” list. We could see new leave mandate proposals in the immediate future, so this will be one area to watch closely.

Boost For Vaccine Efforts

The American Rescue Plan provides over $15 billion aimed toward enhancing, expanding and improving the nationwide distribution and administration of vaccines, including the support of efforts to increase access, especially in underserved communities, to increase vaccine confidence and to fund more research, development, manufacturing, and procurement of vaccines and related supplies as needed. The upshot? We may see the widespread proliferation of vaccine availability even earlier than expected.

What You Should Do: Despite developments indicating that vaccines are likely to become much more widely available in the short term, many employers remain unprepared to deal with related issues. Those issues include not only the initial administration process, but also the extent to which the greater prevalence of vaccinated employees may (or may not) affect your safety protocols in terms of mask mandates, physical distancing, and related rules. 

Relief For Small Businesses

The American Rescue Plan Act provides additional funding for small businesses, with a focused effort on those in hard-hit industries like restaurants and bars. The new bill provides $25 billion for a new Small Business Administration program focused on supporting restaurants and other food and drinking establishments. These grants are available for up to $10 million for those eligible and can be used to pay expenses like payroll, mortgage, rent, utilities, and food and beverages.

The bill provides an additional $7 billion for the Paycheck Protection Program, which provides small businesses with the potential for 100% forgivable loans. The additional PPP funding brings the total for the current round of the program to over $813 billion. Likewise, both bills expand PPP eligibility for certain nonprofit organizations.

The new law also provides $15 billion to the Economic Injury Disaster Loan (EIDL) Advance program designed to provide economic relief to businesses currently experiencing a temporary loss of revenue due to COVID-19. Like the PPP, the EIDL program is administered through the SBA to help qualifying businesses meet financial obligations and operating expenses that could have been met had the disaster not occurred. Priority funding is also allocated to businesses with less than 10 employees that the pandemic has severely impacted.

Finally, the law includes funding under the Shuttered Venue Operators Grant (SVOG) program, which had previously appropriated $15 billion in the December 2020 stimulus package. Eligible entities for the SVOG include live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, and talent representatives. Eligible entities for the SVOG program can also qualify for loans under the PPP.

What You Should Do: If you’re a small business operating in a hard-hit industry such as the hospitality sector, you should quickly determine eligibility for funding. Even if you’re not a bar or a restaurant, you might still be eligible for economic assistance through the various grants or loan programs detailed in the plan if the COVID-19 pandemic has severely impacted your business.  

Unemployment Benefits

President Biden considers it imperative that workers impacted by the pandemic not lose out on emergency enhanced unemployment benefits, but the expanded unemployment assistance under the CARES Act and Stimulus 2.0 are set to expire soon in mid-March. Without an extension, millions of unemployed Americans impacted by the COVID-19 pandemic would be impacted. Luckily, both the House’s and Senate’s versions of the American Rescue Plan increase and further extend these unemployment benefits. However, there were some key differences between the two versions of the proposal, and the finalized version differs from the initial proposal.

The finalized legislation retains the $300 per week unemployment benefits, however, the version signed into law extends these benefits until September 6, which is more in alignment with Biden’s proposed outline for the American Rescue Plan. 

Another major change related to the unemployment benefits in the finalized version is the addition of a provision making the first $10,200 in unemployment received in 2020 non-taxable for households with incomes under $150,000. This provision will go a long way to address the looming concerns for the millions of Americans currently on unemployment insurance.

What You Should Do: There is not much for employers to do in response to this provision of the bill, as it is primarily geared toward workers. However, it is important to understand the lay of the land in terms of unemployment insurance, as certain industries may face obstacles in hiring for certain positions for the time being. You should be aware that the benefits will expire on September 6 and adjust your hiring plans accordingly.

Stimulus Payments

The American Rescue Plan means that the federal government will send $1,400 stimulus checks on top of the $600 payments issued through the December stimulus bill. Under the structure agreed to during lawmaking negotiations, the payments will phase out at a quicker rate for those at higher income levels compared with the initial proposal floated by President Biden. Those earning $75,000 per year and couples earning $150,000 will still receive the full $1,400-per-person benefit but those earning more than $80,000 and couples earning more than $160,000 will not be eligible.

Tax Credits And Benefits

The bill expands three important tax credits: the child tax credit, the earned income credit, and the employee retention credit. The bill also increases certain health and pension benefits.    

  • The bill increases the child tax credit from $2,000 per child under age 17 to $3,000 for those age six through 17 and to $3,600 for those under age 6. Currently, the credit phases out at $200,000 for single tax return filers and $400,000 for joint filers. The new bill lowers those thresholds to $75,000 and $150,000 respectively. Another key provision makes the credit fully refundable – meaning that those who pay little or no taxes will still be able to take full advantage of the credit. Recipients can receive monthly installments (which would facilitate paying monthly living expenses) or a lump sum.
  • The earned income credit for lower income taxpayers has also been expanded. The amount has nearly tripled and the minimum age to claim to the credit is reduced from 25 to 19. No upper age limit is imposed under the new bill.
  • The employee retention credit (ERC) is extended through December 31, 2021. It also is expanded to include certain start-up businesses (with an ERC capped at $50,000 per quarter) that otherwise would not have qualified for the ERC.

The bill also provides for a 100% COBRA premium subsidy effective April 1 through September 2021 for those who are involuntarily terminated and want to remain on their employer’s health insurance. The employer would pass along the subsidy so that qualifying individuals would pay nothing for their COBRA coverage during this period.   

Finally, the bill expands the class of those who are entitled to help with the cost of their insurance under the Affordable Care Act. Consumers would be able to receive assistance if their premiums exceed 8.5% of their incomes rather than the current income cutoff of $51,000. The bill provides over $24 billion to shore up childcare facilities which have been hit particularly hard by the pandemic. It provides help to childcare workers making less than $12 per hour. 

Conclusion

We will keep a close eye on further legislative proposals and provide updates as warranted.

Will a Biden Administration Push to Expand Paid-Leave Benefits?

November 24 - Posted at 9:19 AM Tagged: , , , , , ,

Federal coronavirus-related paid-leave benefits are set to expire at the end of the year, and if those benefits aren’t extended, some workers may be left without coverage as the pandemic persists through the winter months.

The Families First Coronavirus Response Act (FFCRA), which took effect in April 2020, is a temporary measure that provides COVID-19-related paid-sick-leave and paid-family-leave benefits to certain eligible workers.

Will FFCRA’s emergency benefits be renewed as the coronavirus crisis continues? Will President-elect Joe Biden make expanding paid leave a priority? Here’s what employment attorneys had to say.

FFCRA Leave

Coronavirus cases in the U.S. recently hit record highs with more than 150,000 new cases reported each day since Nov. 16, according to the U.S. Centers for Disease Control and Prevention. FFCRA benefits will end on Dec. 31 unless Congress renews them. 

For now, many employers are required to provide up to 80 hours of paid-sick-leave benefits if employees need leave to care for their own or someone else’s coronavirus-related issues. The legislation also updated the Family and Medical Leave Act (FMLA) to provide workers with job-protected, paid leave when they can’t work—either onsite or remotely—because their son’s or daughter’s school or child care service is closed due to the public health emergency.  

FFCRA’s emergency paid-leave provisions apply to certain public employers and businesses with fewer than 500 employees, and there are exceptions available for small businesses and companies that employ health care workers.

Will FFCRA leave be extended? With the upcoming change in the presidential administration, employment attorneys are divided in their predictions.

“It will be renewed,” predicted Philip Voluck, an attorney with Kaufman Dolowich & Voluck in Blue Bell, Pa. He said it may be renewed by the Trump administration, noting the Biden administration does not assume office until Jan. 20, 2021. Voluck said new legislation may expand the FFCRA’s reach and clarify employer’s paid-leave obligations.

Employers covered by FFCRA earn refundable tax credits that reimburse them for the cost of providing paid leave related to COVID-19. “These need to be carried over to any new legislation to ease the financial strain on covered employers,” he noted.

Senate Majority Leader Mitch McConnell, R-Ky., said he wants Congress to finalize a new coronavirus economic stimulus bill before the end of the year, but that might be difficult during a lame-duck session, according to Politico.

Sara Jodka, an attorney with Dickinson Wright in Columbus, Ohio, believes that there will be a FFCRA extension or supplemental legislation but not until Biden takes office. Biden’s current COVID-19-related leave plans would expand FFCRA to provide for 100 percent wage coverage up to $1,400 a week, provide for paid leave during a mandatory quarantine or isolation period, and expand coverage to domestic workers, caregivers, gig-economy workers and other independent contractors. Employers would also continue to receive tax deductions and reimbursement for COVID-19-related paid leave.

Charles Thompson, an attorney with Ogletree Deakins in San Francisco, noted that the Biden administration may focus on other coronavirus priorities, such as putting money directly in people’s pockets.

Nationwide Paid Leave

In addition to the FFCRA’s paid-leave provisions, there is the longer-term consideration of whether a lasting nationwide paid-leave law may garner bipartisan support.

In the 116th Congress, Democrats and Republicans put forward several proposals to provide paid leave to new parents. In December 2019, Congress passed paid parental leave for qualifying federal employees. Senate Minority Leader Chuck Schumer, D-N.Y., has said he “will not stop fighting until this benefit is provided to all workers nationwide.”

Biden supports the Family and Medical Insurance Leave Act, which is known as the FAMILY Act. The proposed legislation would provide workers with paid time off to care for a newborn or recently adopted child, take care of themselves or family members with serious health conditions, or care for military family members and help them prepare for deployments.

Jodka noted, however, that the Biden-Harris campaign platform focused on expanding other employee rights, such as making it easier for workers to organize and collectively bargain, increasing the federal minimum wage, and extending overtime pay to more workers.

She thinks any paid-leave law will likely stem from an amendment to the FMLA, like the FFCRA did. “Employers, especially smaller ones, struggled—and continue to struggle—to meet the paid-leave requirements of the FFCRA,” she said, “so it is likely that first attention will be to the COVID-19 response with a discussion of a federal paid-leave law well off into the future.”

State and Local Trends

Some states and cities already provide paid leave, and their laws operate independently of federal law, Voluck explained. “States will likely become even more generous with paid leave,” he predicted.

SHRM has long advocated for a voluntary federal framework for paid leave, rather than a fragmented patchwork of state and local leave laws, and recently outlined employers’ need for consistency and simplicity in a letter to the U.S. Department of Labor’s Women’s Bureau.

Thompson thinks that states and local jurisdictions “will continue to be at the forefront of requiring that employers provide COVID-related leave.”

Many jurisdictions—including Arizona, California, Colorado, Michigan, New Jersey, New York, Rhode Island, Washington and Washington, D.C.—have enacted their own emergency paid-leave laws in response to the pandemic. Many cities in California and elsewhere have also passed supplemental leave ordinances. Employers should note that state and local COVID-19-related paid-leave laws may have different expiration dates.

“I think state laws will continue to trend upward in favor of paid-leave law mandates,” Jodka said. “The most typical is a paid-sick-leave mandate, and with COVID-19 cases rising, the need to value proper medical care and time away from work without risking losing a paycheck is at an all-time high.”

FFCRA Documentation and Record Keeping: What Employers Need to Know

April 06 - Posted at 1:31 PM Tagged: , , , , , , , , , ,
The close of March and open of April 2020 brought in both Q2 of 2020 and some updated guidance from the U.S. Department of Labor (DOL) and the U.S. Internal Revenue Service (IRS) on the documentation needed for leaves under the Families First Coronavirus Response Act (FFCRA). The DOL’s Regulations, called a temporary rule, include substantial guidance related to the information an employer should (and in some cases must) obtain from an employee requesting leave. The DOL updated its FFCRA Questions and Answers (DOL Q&As) as well in conjunction with its Regulations.

When read in conjunction with the FAQs published by the IRS on March 31, 2020 (“IRS FAQs”) regarding the employer tax credits associated with paid FFCRA leave, the DOL’s Regulations answer some questions, but leave others unanswered. Somewhat surprisingly, the Regulations do not mention specific documentation for certain types of leave available under FFCRA, such as a copy of the doctor’s order or advice to quarantine or isolate. Any records that are required must be retained by the employer for a period of four years. 

Records Related to Small Employer Exemption

If a small employer decides to deny emergency paid sick leave or expanded family and medical leave to an employee whose child’s school or place of care is closed, or whose childcare provider is unavailable (which is the only type of leave a small employer can deny), the employer must document the basis for the exception. 

Although the employer should not send this documentation to the DOL, it should retain such records for its own files.

Information Supporting Reasons for Leave

The Regulations require that employees requesting leave provide their employers a “signed statement,” in addition to the documentation (and information) noted below, which must contain the following: (1) the employee’s name; (2) the date(s) for which leave is requested; (3) the COVID-19 qualifying reason for leave; and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. The Regulations also outline what an employee must provide his or her employer for each qualifying reason for leave. The information required for each qualifying reason is summarized below.
 
  • Leave because of a federal, state, or local quarantine or isolation order related to COVID-19. The employee must supply the employer with the name of the government entity that issued the order.
  • Leave because a health care provider advised the employee to quarantine or self-isolate due to concerns related to COVID-19. The employee must supply the employer with the “name of the health care provider who advised” the employee to quarantine or self-isolate due to concerns related to COVID-19. Note that these “concerns” are limited to three COVID-19-related situations:  (1) the employee has COVID-19; (2) the employee may have COVID-19; or (3) the employee is particularly vulnerable to COVID-19. Although the Regulations do not state it is required, employers may want to at least include these situations on their request forms to show that the leave is being requested – and provided – for a covered reason.
  • Leave because the employee is caring for an individual who is subject to an order by a federal, state, or local official to quarantine or self-isolate or who has been advised by a health care provider to quarantine or self-isolate due to concerns related to COVID-19. The “individual” to whom the employee is providing care must be an employee’s immediate family member, a person who regularly resides in the employee’s home, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she were quarantined or self-isolated. For this type of leave, ‘‘individual’’ does not include persons with whom the employee has no personal relationship. Although not specifically required by the Regulations, this detailed definition implies the need to request information regarding the relationship, and the collection of such information is supported by the IRS FAQs. As with similar leaves for the employee’s own circumstances, the employee must supply the employer with the name of the governmental official or entity that issued the quarantine or isolation order or the name of the health care provider who advised the individual for whom the employee is caring to self-quarantine due to concerns related to COVID-19. If the leave relates to advice from a health care provider, the same limited “concerns” noted above also apply to this form of leave, and employers may want – at a minimum – to include that list on their request forms to show that the leave is being requested for a covered reason.
  • Leave because the employee is caring for his/her son or daughter whose school, place of care or childcare provider has been closed, or the childcare provider of such son or daughter is unavailable, for reasons related to COVID-19. An employee must supply the employer with (1) the name of the son or daughter for whom the employee is caring; (2) the name of the school, place of care or childcare provider that has closed or become unavailable; and, (3) a representation that no other suitable person will be caring for the child during the leave.
    • NOTE: The answer to IRS FAQ No.44 notes that, in order to receive a tax credit for the paid sick leave or expanded family and medical leave for this reason, if the child is older than 14 and the leave is during daylight hours, the employee must provide a statement that special circumstances exist requiring the employee to provide care.
The Regulations do not list any additional information required for the purpose of a leave taken because the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

The Regulations state that employers may not require documentation beyond what is allowed for by the Regulations. In addition to the information specified above, the Regulations state generally, that employers may also request additional information or documentation needed to support a request for tax credits pursuant to the FFCRA. According to the IRS, employers are not required to provide leave if employees requesting leave fail to provide “materials sufficient to support the applicable tax credit.” Taken together, the Regulations and the IRS FAQs suggest that employers can require the information specifically listed under the FCCRA Regulations and any specific information that the IRS requires for a tax credit (such as the information noted above concerning children older than 14). Requiring anything beyond those categories potentially violates the FFCRA.

Notably, if an employee fails to provide the required information or documentation, the employer must provide that employee an opportunity to correct the error and provide the required documentation before denying the request for leave.

What Employers Need to Keep (and for How Long)

An employer is required to retain all documentation provided to support the need for leave for four years, regardless of whether leave was granted or denied. If an employee provided oral statements to support his or her request for paid sick leave or expanded family and medical leave, the employer is required to document and retain such information for four years also. Similarly, if an employer denies an employee’s request for leave pursuant to the small business exemption, the employer must document its authorized officer’s determination that the criteria for that exemption are satisfied and retain such documentation for four years.

The Regulations and the IRS FAQs also explain what documents the employer should create and retain to support its claim for tax credits from the IRS. Employers must maintain the following records for at least four years: 
 
  1. Documentation to show how the employer determined the amount of emergency paid sick leave and expanded family and medical leave paid to employees that are eligible for the credit, including “records of work, telework and qualified sick leave and qualified family leave;”
  2. Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages;
  3. Copies of any completed IRS Forms 7200 that the employer submitted to the IRS;
  4. Copies of the completed IRS Forms 941 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 IRS Form 941; and
  5. Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit.
Although the DOL’s Regulations and the IRS’s FAQs appear to be in agreement regarding the documentation needed to support an employer’s claim for tax credits from the IRS, we expect more detail from the IRS on this topic in the near future. We hope the additional detail from the IRS provides more clarity on categories 1, 2, and 5 of the records that need to be retained by employers. A more detailed explanation of how employers may claim tax credits, and what information will be needed, can be found at https://www.irs.gov/forms-pubs/about-form-7200 and https://www.irs.gov/pub/irs-drop/n-20-21.pdf.

We continue to monitor future guidance from the DOL and IRS and other legislation that may affect employers during this challenging time. 

Emergency Paid Leave Act Update

March 18 - Posted at 9:17 PM Tagged: , , , ,
Late this afternoon, the Senate passed its version of the paid leave bill that has been in the forefront of discussions this week. It does not appear that the text of the Senate’s version of the bill is available yet online, but we will make available a recap of  its contents once it is available. 
 
The President must still sign any bill passed by Congress BEFORE it will become law, although it is expected that the President could sign the bill as early as tonight and probably no later than tomorrow (Thursday) morning. Once he signs the bill, it will still be 15 days before it become effective.

House Passes COVID-19 Coronavirus Law: Prepare For Paid Sick Leave

March 16 - Posted at 10:22 AM Tagged: , , , , , ,

In an effort to boost the government’s response to the COVID-19 coronavirus outbreak, the U.S. House of Representatives passed the Families First Coronavirus Response Act yesterday, an economic stimulus plan aimed at addressing the impact of COVID-19 on Americans. It includes many provisions which apply to employers, such as paid sick leave for employees impacted by COVID-19 and those serving as caregivers for individuals with COVID-19. 

The Act (H.R. 6201), which passed on a bipartisan 363-40 vote, will be presented to the Senate on Monday afternoon and is expected to pass the Senate with few revisions. President Trump has publicly supported the bill, and it will likely be signed into law late Monday, March 16, or Tuesday, March 17.

While the Act also contains several provisions to increase funding for familiar benefit programs, like WIC and SNAP, this post summarizes the key benefit provisions of the Act which affect employers. Please note the Act has not yet been finalized and the enacted law may vary from the below summary.

Paid And Unpaid Leave For Coronavirus-Related Reasons

There are three provisions relating to employees being forced to miss work because of the COVID-19 outbreak: an emergency expansion of the Family Medical Leave Act (FMLA), a new federal paid sick leave law, and expanded unemployment insurance benefits.

Emergency Family And Medical Leave Expansion Act

  • Expanded Coverage And Eligibility – The Act significantly aims to amend and expand the FMLA on a temporary basis. The current employee threshold for coverage would be changed from only covering employers with 50 or more to employers covering any workplace with fewer than 500 employees. It also lowers the eligibility requirement such that an employee who has worked for the employer for at least 30 days prior to the designated leave is eligible to receive paid family and medical leave. This means that thousands of employers not previously subject to the FMLA must provide job-protected leave to employees for a COVID-19 coronavirus-designated reason.
  • Reasons For Emergency Leave – Specifically, any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of paid, job-protected leave to allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) to care for an at-risk family member who is adhering to requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; or to (3) to care for the employee’s child if the child’s school or place of care (including if the childcare provider is unavailable) has been closed due to a public emergency.
  • Paid Leave – The first 14 days of Emergency FMLA may be unpaid, but an employee may elect to substitute any accrued paid time off, including vacation or sick leave, to cover some or all of the 14-day unpaid period. After the 14-day period, the employer must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking Emergency FMLA. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. Employers with bargaining unit employees would apply the Emergency FMLA provisions consistent with the bargaining agreement.
  • Expanded Definitions – The Act also expands the definition of who is eligible as a “parent’ under FMLA, which includes a parent-in-law of the employee, a parent of a domestic partner of the employee, and a legal guardian or other person who served as the employee’s parent (also know as in loco parentis) when the employee was a child.
  • Small Business And Other Exemptions – The bill also gives the Secretary of Labor the authority to issue regulations to exempt some small business with fewer than 50 employees (when the imposition of such requirements would jeopardize the viability of the business as a going concern), and to exclude certain healthcare providers and emergency responders from the list of those employees eligible for leave.
  • Effective Date And Expiration – This program will become effective within 15 days of enactment and remain in effect until December 31, 2020.

Emergency Paid Sick Leave Act

This provision requires employers with fewer than 500 employees to provide employees (regardless of the employee’s duration of employment prior to leave) with 80 hours of paid sick leave at the employee’s regular rate (or two-thirds the employee’s regular rate to care for a child whose school or daycare has closed due to coronavirus, or to care for a family member who is self-isolating due to a coronavirus diagnosis, who is exhibiting symptoms and needs to obtain medical care, or who is complying with a requirement or recommendation to quarantine).

  • Reasons For Paid Sick Leave – This portion of the new law would allow the employee to (1) comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; (2) self-isolate because the employee is diagnosed with coronavirus; (3) obtain a diagnosis or care because the employee is exhibiting symptoms; (4) to care for or assist an at-risk family member who is self-isolating due to a diagnosis, who is exhibiting symptoms of coronavirus and needs to obtain medical care, or who is adhering to requirement or recommendation to quarantine due to a exposure to, or symptoms of, coronavirus; or (5) to take care of the employee’s child if the child’s school or place of care has been closed due to the COVID-19 coronavirus (including if the childcare provider is unavailable).
  • Carryover – This paid sick leave will not carry over to the following year and is in addition to any paid sick leave currently provided by employers.
  • Calculating Rate Of Pay – Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave. Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work. A business employing fewer than 500 employees is required, at the request of the employee, to pay the employee for 14 days of mandated emergency paid leave instead of the initial 14 days of unpaid leave required by the Emergency Family and Medical Leave Expansion Act (summarized above).

An employer may not change its current paid leave policy after enactment to avoid the obligations of the additional leave mandated by the Emergency Paid Sick Leave Act. This program will be administered by the Social Security Administration over the next year until these requirements expire on December 31, 2020.

Emergency Unemployment Insurance Stabilization And Access Act Of 2020

This section provides $1 billion in 2020 for emergency grants to states for activities related to unemployment insurance benefit processing and payment, under certain conditions.

Half of the resources are to be allocated to provide immediate funding to all states for administrative costs so long as they meet some basic requirements, including: (1) requiring employers to provide notification of the availability of unemployment compensation at the time of separation; (2) ensuring applications for unemployment compensation and assistance with the application process are accessible in at least two ways (in-person, by phone, or online); and (3) notifying applicants when their application is received and being processed, as well as providing information about how to ensure successful processing if the application cannot be processed. 

The other half would be reserved for emergency grants to states which experience an increase of unemployment compensation claims of at least 10% in comparison to the same quarter in the prior calendar year. Those states would be eligible to receive an additional grant to assist with costs related to such an unemployment spike if they meet additional requirements, including: (1) expressing of commitment to maintain and strengthen access to unemployment compensation; and (2) taking or planning to take steps to ease eligibility requirements and access (like waiving work search requirements and the waiting period). This provision will remain in effect until December 31, 2020.

Tax Credits For Paid Sick And Paid Family And Medical Leave

 This section provides a series of refundable tax credits for employers who are required to provide the Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave described above. These tax credits are allowed against the tax imposed by Internal Revenue Code Section 3111(a), which deals with the employer portion of Social Security taxes. While this limits application of the tax credit, employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.

Specifically, employers are entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter in adherence with the Emergency Paid Sick Leave Act. The qualified sick leave wages are capped at $511 per day ($200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter. 

Similarly, employers are entitled to a refundable tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the Emergency Family and Medical Leave Expansion Act. The qualified family leave wages are capped at $200 per day for each individual up to $10,000 total per calendar quarter.

Coverage For Testing For COVID-19

This section requires private health plans to provide coverage for COVID-19 diagnostic testing, including the cost of a provider, urgent care center and emergency room visits in order to receive testing. Coverage must be provided at no cost to the employee and any others covered under the employee’s health plan.

Next Steps

As mentioned above, the Senate is expected to pass the legislation on Monday, and the President is expected to sign it shortly thereafter. There may be changes made by the Senate before the legislation is finalized, and there may be follow-up “clean-up” legislation. In addition, many states are proposing similar emergency legislation to enact or expand their own paid sick leave or family and medical leave laws to cover coronavirus-related issues. Some of these state laws may be in addition to any new requirements at the federal level.  

We will continue to monitor this rapidly developing situation and provide updates as appropriate.

Controlling Intermittent FMLA Leave Abuse

April 11 - Posted at 2:01 PM Tagged: , , , , , , , , , , , , ,

The Family Medical Leave Act (FMLA) allows employees to take 12 weeks of leave to care for their own or a family member’s serious health condition and up to 26 weeks for military caregiver leave. An employee can take this leave in one block, over several stretches of time or intermittently. For an employee to take intermittent leave, they need to provide a certification that there is a medical need for such leave.

 

While longer FMLA leaves are typically straightforward, the ability of an employee to take small increments of FMLA leave periodically can generate administrative headaches for employers and raises concerns about employee abuse of intermittent leave. The FMLA offers a number of tools (many of which are not employed) that employers can use to discourage abuse of intermittent leave. Below are eight of the best strategies for helping to get a handle on the problem.

 

Tip #1- Question the Original Certification

There are a number of opportunities to ensure that a certification calling for intermittent health related absences is sufficient, valid, and supports the need for intermittent leave. When an employee submits a certification for a chronic condition that will flare up and require intermittent leave (such as asthma or migraines), the HR professional reviewing the certification should consider these options:

 

Incomplete or insufficient certification

When a certification has missing entries or is vague, you may ask the employee the provide complete and sufficient information. The request must be made in writing and must specify the reason the certification was considered incomplete or insufficient. The employee must then provide the additional information within 7 days. If the employee fails to provide this information, leave may be delayed or denied.

 

Authentication and Clarification

You may contact the health care provider to ensure that they actually prepared the certification or to clarify the meaning of a response, but an HR professional, health care provider, leave administrator or management official to make the contact. The employee’s direct supervisor may not be the one who contacts the health care provider. During this process, be careful not to request more info than what is required to authenticate or clarify the form. This can be used at the recertification stage as well as the initial certification.

 

Tip #2- Ask for a Second Opinion

Employers who have reason to doubt the validity of an initial certification may ask for a second opinion. The physician may be one of the employer’s choosing, but it can not be one the employer uses on a regular basis. It is the employer’s responsibility to pay for the second opinion. If the first and second opinions differ, the employer may require a third health care provider certification, again at the expense of the employer. The third provider’s opinion is binding. Although there are a number of opportunities to ask for recertification of an employee’s serious health condition, you may not seek second or third opinions on recertification.

 

Tip #3-Ensure That All Absences Related To The Condition Are Counted

The job of managing intermittent leave is not over after an employee submits a certification that calls for sporadic health related absences. Employers must be certain that all absences related to the condition are counted against the employee’s FMLA entitlement, while at the same time ensuring that they are not counted against the employee under a no-fault attendance policy.

 

In larger organizations, front line supervisors must be the eyes and ears of the company and must pass along the information about FMLA covered intermittent absences to HR. This, in turn, requires employers to train supervisors to recognize absences that may be covered by FMLA.

 

Identifying FMLA absences may not be as simple as it may seem, in part because the US Department of Labor and the courts have held that the employee does not have to cite the FMLA in a request. If there is an existing certification, it is enough for the employee to notify the employer that they had a recurrence of the health condition covered by the certification. For first time health related absences, supervisors should be trained to notify HR any time an employee is out for more than three days with an illness, especially if an employee saw a physician during that time.

 

Tip #4-Require Employees To Follow Your Paid Leave Policy

Employers may require that employees use up paid leave time for their intermittent FMLA absences. In fact, all employers should include such a requirement in their FMLA policies and enforce the practice of using up paid time off during FMLA leave, in order to prevent the situation where an employee can take paid leave after their FMLA leave expires and thereby extend a leave of absence beyond the FMLA entitlement.

 

The 2008 FMLA regulations made it clear that employers may require employees to abide by your paid-time off policies in order to be paid for FMLA leave time.

 

Tip #5-Request Recertification

FMLA regulations offer a number of opportunities to seek recertification of the need for FMLA leave, including intermittent leave. Unless there are changed or suspicious circumstances, these rules of thumb apply:

 

  • employees may be asked for recertification any time they seek to extend an existing FMLA leave
 
  • for long term conditions or conditions that may require sporadic absences, an employer may request recertification every 30 days in connection with an absence
 
  • if the employee is taking a solid block of leave for more than 30 days, the employer may ask for recertification if the leave extends beyond the requested leave period
 
  • if the employee is out on a leave that has been certified to extend for more than 6 months, the employer may seek recertification every 6 months
 
  • employers may ask for a new certification at the beginning of each leave year

 

As with initial certifications, the employee has 15 days to provide the recertification.

 

Tip #6-Follow Up On Changed Or Suspicious Circumstances

You should always keep tabs on use of FMLA leave, and may want to pay special attention to patterns of intermittent leave usage. You may seek recertification more frequently than 30 days if: a) the circumstances described by the existing certification have changed, or b) the employer receives information that casts doubt on the employee’s stated reason for the absence or on the continuing validity of the certification.

 

“Changed circumstances” include a different frequency or duration of absences or increased severity or complications from the illness. The regulations allow you to provide information to the health care provider about the employee’s absence pattern and ask the provider if the absences are consistent with the health condition.

 

“Information that casts doubt on the employee’s stated reason for the absence” may be information you receive (possibly from other employees) about activities the employee is engaging in while on FMLA leave that are inconsistent with the employee’s health condition. An example provided in the regulations is an employee playing in the company softball game while on leave for knee surgery.

 

A note of caution- Employers who receive information from coworkers about an employee’s actions while on leave must be certain the information they receive is credible and that the coworker has no hidden motive against the person on leave. Always attempt to independently verify information received from coworkers before taking action or requesting recertification for suspicious circumstances.

 

Tip #7-Control The Way That Employees Schedule Planned Treatment

Employees may take intermittent leave for treatment, therapy, and doctor visits for serious health conditions. FMLA regulations specifically require that employees schedule those absences for planned medical treatment in a way that least disrupts the company operations. When you receive a request for this type of intermittent leave, communicate with the employee about the frequency of the treatment, the office hours of the health care provider and way that the employee may be able to alter their schedule to cut down on disruptions.

 

Tip #8-Consider Temporary Transfers

If the need for intermittent leave is foreseeable, you may transfer the employee during the period of the intermittent leave to an available alternative position for which the employee is qualified and which better accommodates the recurring periods of leave. The alternate position must have equivalent pay and benefits, but does not have to provide equivalent duties. If the employee asks to use leave in order to work a reduced work schedule, you may also transfer the employee to a part time role at the same hourly rate as the employee’s original position, as long as the benefits remain the same.

 

You may also allow the employee to work in the employee’s original position, but on a part time basis. You may not eliminate benefits that would otherwise not be provided to part time employees, but may proportionately reduce benefits such as vacation leave if it is the employer’s normal practice to base the benefits on the number of hours worked.

 

These tips will not entirely eliminate the problem of employees trying to take advantage of the intermittent leave regulations, but they will help.

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