FAQ Guide: Families First Coronavirus Response Act | Aldrich Benefits

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

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

Presented by Aldrich Benefits |

With the passage of the Families First Coronavirus Response Act, many companies have questions about how the new emergency sick leave and emergency paid family leave laws will impact their employees. This guide helps you determine eligibility, covered events, benefit duration and benefit amount. See the FAQ below for further explanation of the new law.

The effective date is 15 days after it was signed by President Trump on March 18, which would be April 2, and would not be retroactive.

Update: On March 24, 2020, the U.S. Department of Labor released a preliminary questions and answers page. The Q&A guidance moves the effective date of the new law to April 1, 2020.

Keep in mind that with Congress working on additional legislation every day, these details are fluid and may change. This article was updated with the most recent information on April 21, 2020.

Emergency Paid Sick Leave Emergency Paid Family Leave
Who’s Eligible? All employees of employers with fewer than 500 employees, regardless of their tenure with their employer All employees of employers with fewer than 500 employees, who have worked for the employer for at least 30 days.
Covered Events Employees who are unable to work (or telework) due to any of the following events:

1. Employee who is subject to federal, state, or local quarantine

2. or an employee who is in self-quarantine upon advice from a medical professional due to COVID-19

3. Employees experiencing symptoms of COVID-19 and seeking medical diagnosis

4. An employee who is caring for an individual (not currently limited to immediate family but this may be clarified later) who is subject to quarantine or isolation due to COVID-19 or concerns related to COVID-19

5. An employee who is caring for their child whose school or place of care is closed or unavailable due to COVID-19 concerns

6. An Employee who is experiencing conditions specified by the Secretary of HHS in consultation with Secretaries of Treasury and Labor. The meaning of this clause will be clarified by the Secretary of HHS at a later date

 Employees who are unable to work (or telework) due to the following events:

1. An employee who must care for their child (under 18) whose school or place of care is closed or otherwise unavailable due to the COVID-19 Public Health Emergency
Benefit Duration Full Time Employees: 80 Hours

Part-Time Employees: Equivalent number of hours they would work on average during a two-week period (a separate calculation is available for part-time employees whose schedules vary significantly from week to week)

 

 12 weeks total, the first two weeks (10 work days) may be unpaid
Benefit Amount For covered events 1-3: The benefit is paid out at their regular rate, however the benefit is capped at $511 per day and $5,110 in total

For covered events 4-6: The benefits is 2/3 of the employee’s regular pay with a cap of $200 a day not to exceed $2,000 total

 The first 10 days of leave are unpaid, however, an employee can choose to use any accrued PTO during those 10 days. However, employers cannot compel employees to do so.

After the initial 10 days, the employee will receive 2/3 of their regular pay rate for the hours they would normally be scheduled to work, not to exceed $200 a day or $10,000 in total

Frequently Asked Questions: What The Families First Coronavirus Response Act Means For You

Click a question to skip to the answers you need.

 

Are employers with fewer than 50 employees required to provide the benefits?

  • For the most part, yes. However, the DOL has recently released new information regarding the possible exemption for employers with fewer than 50 employees. They have provided clarification that small groups will only be able to apply to be exempt from the child care-related paid sick leave and paid family leave portion of the Act. This means that employers with fewer than 50 employees, even if approved for a hardship waiver, will still be required to provide emergency paid sick leave to employees for reasons 1-4 and 6.
  • To determine if a small business is exempt from the paid expanded family leave and paid sick leave (for reason 5 only), an authorized officer of the company must have determined that all three of the following apply:
    • The employer employs fewer than 50 employees
    • The leave is requested because the child’s school or place of care is closed, or child care provider is unavailable due to COVID-19 related reasons; and
    • The authorized officer has determined that at least one of the following three conditions is satisfied:
      1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity
      2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities, or
      3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity
  • The authorized officer and business should clearly document this information.
  • The DOL has stated that employers should not mail anything to the DOL or HHS, but rather that employers should retain the documentation for their own records.

How do I determine if my business has more than 500 employees? What if I am above 500 now and drop below later?

  • The determination as to whether or not you are subject to the act is going to be based on whether you have fewer than 500 employees at the time that an employee’s leave is to be taken. When counting how many employees you have you would include all full-time and part-time employees, any employees on leave, employees who are jointly employed by you and another employer and day laborers supplied by a temp agency.

If I already offer my employees two weeks sick pay or PTO, do I still have to offer them the emergency paid sick time on top of it?

  • This Act does not replace your existing sick pay or PTO policy, this is in addition to any currently offered benefits. Employers are not allowed to modify their existing leave benefits and policies after the enactment in an effort to avoid the new requirements.

Do employers have to pay out unused emergency paid sick time when an employee leaves the company?

  • The Act specifically states that employers are not required to pay out any unused emergency paid sick leave at the end of employment.

Does unused emergency paid sick time rollover to next year?

  • No, the benefits cease to be available at the end of this year.

Can employers require that employees give advance notice of intent to take emergency paid sick time?

  • No, the Act states that employees are not required to give notice prior to the first workday they plan to take paid sick time. However, after the first day of benefits, employers may require the employee to follow reasonable notice procedures in order to continue paid sick time.

Can employers require employees to use up all other forms of available PTO prior to taking advantage of these new emergency benefits?

  • With regard to FFCRA sick leave, employers may not mandate that employees use other available benefits prior to using the emergency FFCRA sick leave and employers cannot dictate the sequence in which the leaves are taken.
  • However, the DOL has recently released additional information regarding mandated benefit exhaustion as it relates to FFCRA EFMLA. If an employer’s existing FMLA policy, prior to April 1, 2020, was that employees must exhaust their accrued PTO while taking FMLA, then employers may continue to enforce such a policy. However, it is important to note that the employer will be responsible for paying the employee what they would normally be entitled to under the PTO policy even if that amount exceeds the $200/day or $10K aggregate. Employers will still only be entitled to a tax credit for the $200/day and the $10K aggregate. Please note that if the employer had no such policy in place prior to April 1, or if the employer was not subject to FMLA prior to April 1, then they may not mandate employees exhaust their PTO.

If an employee has already used their entire allotted FMLA allowance, are they still eligible for receive paid leave under FFCRA?

  • No, the FFCRA emergency paid family leave is simply an amendment to the existing FMLA law that allows an additional qualifying reason for covered leave and provides a paid component. It does not, however, grant additional leave in addition to the allotted FMLA time. Conversely, if an employee uses all 12 weeks of emergency paid family leave under FFCRA, that will count against their FMLA allowance.

Can employers require that an employee find a replacement to cover their scheduled hours as a condition of taking the sick pay?

  • No, the Act specifically notes that the sick pay cannot be conditioned on finding coverage for the hours/shifts that the employee is going to miss.

What is my total potential exposure per employee?

  • Based on the limits in place, the maximum exposure per employee is $15,110 ($5,110 maximum pay out available for paid sick time and $10,000 maximum pay out for paid family leave).

If we lay off an employee after April 1, will they still be eligible for these benefits?

  • Generally, no. It is presumed that if an employee is on leave without pay, or terminated, they would not be entitled to the benefits under FFCRA. The Act specifies that an employee has to be out of work due to one of the specified conditions, therefore, if they are on leave or terminated for a reason other than listed they would not be eligible. We strongly advise employers speak and consult with counsel before taking any adverse employment actions in light of the new bill.

What is considered as an employee’s normal pay rate under this law? Are commissions included?

  • Under the FFCRA, the regular rate of pay is the average of the regular rate over a period of up to six months prior to the date on which the employee takes leave. If an employee has not worked for the current employer for at least six months, then the calculated pay rate is the average of the employee’s regular rate of pay for each week that they have worked for the current employer. Commissions, tips and piece rates are all included as wages when calculating the pay rate.

Are there any tax credits or financial support options for employers?

  • Employers who are subject to the FFCRA will receive financial assistance in the form of tax breaks. Eligible employers will receive a dollar-for-dollar reimbursement of all qualifying wages paid out under FFCRA via a payroll tax credit against the employer’s payroll tax liability. For more information about how the tax credits, read our breakdown of the program.

Where can I find the new notice posters that the DOL requires us to post?

Which records must I collect and retain from employees who paid sick leave or expanded family and medical leave under FFCRA?

  • Employers must require that employees provide supporting documentation for their leave request.
  • For employees requesting paid sick leave under FFCRA, employers should collect a written and signed statement from the employee that includes:
    1. The employee’s name
    2. The date or dates for which leave is requested
    3. A statement of the COVID-19 related reason that the employee is requesting leave; and
    4. A statement that the employee is unable to work, including by means of telework, for such reason.

     

  • If the employee is seeking leave due to a quarantine order or self-quarantine advice, the employer should also collect a statement from the employee that includes:
    1. The name of the government entity ordering the quarantine or the name of the health care professional advising the self-quarantine
    2. If the person subject to the quarantine, or self-quarantine advice, is not the employee, that person’s name and relation to the employee

     

  • For employees requesting paid sick leave to care for a child or if they are requesting expanded paid family leave under FFCRA, the employer should collect a written and signed statement from the employee that includes:
    1. The employee’s name
    2. The date or dates for which leave is requested
    3. The name and age of the child(ren) being cared for
    4. The name of the school that has closed or the place of cared that is unavailable
    5. A representation that no other person will be providing care for the child during the periods for which the employee is receiving the leave
    6. A statement with respect to the employee’s inability to work or telework because of a need to care for a child older than 14 during daylight hours, and a statement that special circumstances exist requiring the employee to provide care

     

  • These records must be retained for at least 4 years.

What information can I request when an employee requests to take the emergency paid family leave?

  • You may require the employee provide you with any additional documentation to support such a leave request to the extent permitted under the certification rules for conventional FMLA leave requests. Examples of documentation that the employee can provide could include: a notice that has been posted on a government, school, or day care website, a newspaper article or an email from an employee or official of the school, place of care or child care provider. As an employer you should retain these notices or documentation that was used to support the expanded family leave request.

How does the law define being “unable to work, including telework, for COVID-19 related reasons?”

  • An employee is considered unable to work if the employer has work available for the employee but the employee is unable to complete such work either under normal circumstances at your normal worksite or via telework, due to one of the specific COVID-19 qualifying reasons as listed in the FFCRA.
  • Note – to the extent you are able to telework while caring for your child, paid sick leave and expanded family and medical leave is not available.

Can an employee take FFCRA leaves intermittently while teleworking?

  • Yes, employees may take intermittent leave in any increment, provided that the employee and employer agree. For example, if you agree on a 90-minute increment, you could telework form 1:00 pm – 2:30 pm and then take leave from 2:30 pm – 4:00 pm and then return to teleworking. The DOL strongly encourages employers and employees to collaborate to achieve flexibility that supports both.

Can an employee take FFCRA leaves intermittently if they are still reporting to a physical worksite or jobsite?

  • The DOL and IRS are allowing considerably greater flexibility to those who work from home and telework versus those who still need to physically attend a worksite. Employees who still report to a worksite may only be allowed intermittent leave for instances in which they are caring for a child whose school or place of care is closed. That means that intermittent leave is limited to FFCRA sick leave reason 5 and to FFCRA EFMLA. This is an effort to shield the workplace from potential exposure. If an employee reporting to a worksite wishes to take leave for any reason other than sick leave reason 5 or EFMLA, they would need to do so in full day increments and continue to take leave until they have exhausted such leave or are no longer eligible.

If an employer closed their offices prior to April 1, 2020 (the effective date of the FFCRA), are employees still eligible for FFCRA leaves?

  • No. If an employer sent employees home and stops paying them because it does not have work for them to do, the employees will not be eligible for FFCRA benefits. However, these employees may be eligible for unemployment.
  • Note – this is true whether the employer closed the worksite for lack of business or because it was required to close due to a Federal, State, or local directive.

If an employer closes their worksite on or after April 1, 2020, but before the employee takes leave, can the employee still receive FFCRA leave benefits?

  • No. If the employer closes after the FFCRA effective date, the employee will not be eligible for FFCRA benefits but may be eligible for unemployment.
  • Note – this is true whether the employer closed the worksite for lack of business or because it was required to close due to a Federal, State or local directive.

What happens if an employer closes their worksite while an employee is already out on FFCRA leave?

  • If an employer closes while an employee is out on FFCRA leave then the employer must pay for any benefits used before the worksite closed. However, as of the date that the employer closes the worksite the employee is no longer entitled to FFCRA leave benefits.
  • Note – this is true whether the employer closed the worksite for lack of business or because it was required to close due to a Federal, State, or local directive.

If an employer is open but furloughs an employee on or after April 1, 2020, can the employee receive FFCRA leave benefits?

  • No. If an employer furloughs an employee because there is not enough work available then the employee is not entitled to benefits under FFCRA.
  • Note – this is true whether the employer closed the worksite for lack of business or because it was required to close due to a Federal, State, or local directive.

Are employees eligible for both unemployment benefits and FFCRA benefits?

  • No, if an employer provides FFCRA benefits to an employee then they are not eligible for unemployment and vice versa. However, each state has its own rules and the DOL recently clarified additional flexibility to the states to extend partial unemployment benefits to workers whose hours or pay have been reduced. Employers should consult with their state unemployment office for specific questions about eligibility.

Must employers continue to provide healthcare coverage while an employee is out on FFCRA leave?

  • Yes. Employees are entitled to continued coverage on the same terms as if they were still actively at work.

Who is considered a child under FFCRA?

  • A “son or daughter” is the employee’s own child – this includes a biological, adopted, foster, stepchild, legal word, or a child for whom the employee is standing in loco parentis. Additionally, an adult son or daughter (i.e. anyone 18 or older) is considered a child under FFCRA if they (1) have a mental or physical disability and (2) is incapable of self-care because of that disability.

How do I file for advance payment of employer tax credits due to COVID-19?

  • The IRS recently released the appropriate forms that will be used, along with the instructions, for getting the tax credits on the FFCRA and CARES Act. You can find the form and instructions here.

Can an eligible employer receive both the tax credits from FFCRA and the Employee Retention Credit under CARES?

  • Yes, if an eligible employer also meets the requirements for the employee retention credit, it may receive both credits, but not for the same wage payments. Qualified FFCRA wages for which the employer received tax credits under FFCRA will not be considered qualified wages for purposes of the employee retention credit.

Can an eligible employer receive both the tax credits from FFCRA and a Small Business Interruption Loan under CARES?

  • Yes. However, if an eligible employer receives tax credits for qualified FFCRA wages, those wages will not be eligible as “payroll costs” for purposes of receiving loan forgiveness under section 1106 of the CARES Act.

Can employers use loans received via the Payroll Protection Act to pay for FFCRA wages?

  • No. The PPP clearly states that payroll costs do not include FFCRA qualified wages.

If an employee who is suffering from COVID-19 symptoms is told that they do not meet the criteria for testing, can they still take sick leave for reason 3?

  • They may not be eligible to take leave under reason 3, however, if their physician advises them to self-quarantine as a precaution then the employee could be eligible for sick leave under reason 2.

Are employer contributions to HSAs or Archer MSAs considered qualified health plan expense eligible for tax credit?

  • No, the amount that an employer contributes to an HSA or MSA is not eligible for credit. The premium paid toward the cost of the underlying HDHP is, of course, considered a qualified expense and eligible for credit.

Are employer contributions/deposits to HRAs, health FSAs, and QSEHRAs considered qualified health plan expenses?

  • The amount contributed to the HRA or health FSA would be considered qualified health plan expenses. To allocate the contributions the eligible employer should use the amount of contributions made on behalf of the particular employee out on FFCRA leave. However, contributions to a QSEHRA would not be considered a qualified expense.

How long should employers retain these FFCRA related records for?

  • Employers are instructed to retain these records for a minimum of 4 years.

Who is considered an “individual” for covered reason 4 under the FFCRA paid sick leave?

  • The DOL recently clarified that an “individual” for purposes of sick leave reason 4 is someone who is an immediate family member, roommate or similar person with whom the employee has a relationship that creates an expectation that the employee would care for that person if he or she were self-quarantined or was quarantined.

If an individual changes employers are they entitled to a new allotment of FFCRA Leave?

  • No. FFCRA entitlements are per person, not per job. In other words, if an employee uses all 80 hours of FFCRA sick leave with one employer and then changes jobs and joins a new employer, they are not entitled to another 80 hours.

Aldrich is Here to Support You

As always, your Aldrich Benefits team is here to provide support for you however we can during these rapidly changing times. For further information, please contact your advisor. For more employer resources to help you navigate the developing impact of coronavirus on your business, visit our COVID-19 Resource Center.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

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