The DOL and IRS have issued updated guidance about the new Families First Coronavirus Response Act (FFCRA) since our last blog. Let’s take a look at some highlights.
Some employers are exempt
While the act applies to public sector employers and private businesses with fewer than 500 employees, some could be exempt.
- Organizations with fewer than 50 employees may be exempt from the FFRCA if compliance would jeopardize their ability to continue operations. They’ll have to document their reasons, but the details about how to do that are not yet available.
- To count employees (for either the 500+ exemption or the limited exemptions for employers with fewer than 50 employees), employers must include all full-time and part-time employees within the U.S. or its territories. This calculation should be done as of the date an employee’s leave is taken. If you hover around the 50 or 500 employee mark, your exemption status could fluctuate daily.
- Employers of health care providers or emergency responders aren’t required to provide sick leave or family leave to those employees, but if they do, they will be eligible for the associated tax credits.
Employees furloughed before April 1 are exempt
If you decide to furlough employees before April 1, you will not be required to offer them these expanded benefits.
- Be sure to work with your general counsel to determine whether the WARN Act applies to you, and comply with the notice requirements for laying off employees in the act. Here’s a good article discussing the WARN Act and COVID-19.
- You’ll also need to offer COBRA to employees currently covered by a group health plan.
- Furloughing your employees has many implications apart from whether it will relieve you from compliance with the FFCRA. While we can help you assess many issues, you may ultimately need to work through them with your attorney.
Hours and rate of pay defined
The amount of Paid Sick Leave required is 80 hours for full-time employees and the equivalent of two weeks of work for part-time employees. You’ll find details on how to calculate the rate of pay and hours in the DOL’s Q&A.
The Q&A also explains that emergency paid sick leave and expanded family medical leave are available only once, regardless of a recurrence. They can, however, be taken intermittently, depending on the conditions. Please review the Q&A for details.
Both types of leave often apply
Workers who have to stay home to care for children due to mandatory school or daycare closure are likely to qualify for both benefits – Paid Sick Leave for the first 10 days, which is available regardless of tenure, followed by the advanced FMLA leave, which is available to those with 30 days’ employment.
Tax relief to come quickly
The IRS guidance issued March 20 says you’ll receive “fast and easy reimbursement” of paid leave provided in the form of an immediate dollar-for-dollar offset against payroll taxes, and they promise any refunds as quickly as possible. They’ll also have an expedited procedure for requesting accelerated payment if your payroll tax obligation is less than the qualified sick and childcare leave paid during that period.
FFCRA applies April 1 – December 31, 2020
The provisions of the act are effective during this date range only. They aren’t retroactive, so they won’t apply to any days of leave taken before April 1. That means you won’t be able to deduct paid leave taken before April 1 from the amount of paid leave you’re required to offer after April 1. Nor will you able to claim the tax credits for leave granted prior to April 1.
Poster must be distributed or posted
If the FFCRA applies to you, you’re required to distribute or post this poster about employee rights under the act.
More relief available
As a reminder, the Small Business Administration will work directly with state governors to provide targeted, low-interest loans to small businesses and non-profits affected by the Coronavirus. You can find more information at SBA.Gov/Disaster.
For COVID-19 updates and information from The Miller Group, visit our COVID-19 Page.