Tag: families first coronavirus response act

COVID-19 Update: FFCRA’s Mandatory Paid Leave Provisions Expiring December 31st; Tax Credits Extended Until March 31, 2021

Setnor Byer Insurance & Risk

On December 27, 2020, the second major coronavirus stimulus package was signed into law. The COVID-Related Tax Relief Act of 2020 includes a number of relief measures to address the health and economic impacts of the COVID-19 pandemic. But, what about the Families First Coronavirus Response Act’s mandatory paid leave requirements? Have they been extended or will they expire on the last day of the year? Congress, it seems, agreed to compromise. Although the final bill did not extend the FFCRA’s mandatory paid leave requirements, it did extend the payroll tax credit for employers opting to voluntarily provide paid COVID-19 leave until March 31, 2021.

The FFCRA’s two paid sick leave laws—the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act–generally require employers with fewer than 500 employees to provide paid leave to employees who are unable to work for qualifying reasons related to COVID-19. Eligible employees may receive up to 80 hours of paid sick leave and up to 10 weeks of paid family and medical leave. To offset the cost of providing paid COVID-19 leave, the FFCRA includes a payroll tax credit equal to 100 percent of the qualifying wages paid by employers to eligible employees.

As of January 1, 2021, the FFCRA’s paid leave provisions will be voluntary, not mandatory. Employers, however, have been given an incentive in the form of dollar-for-dollar payroll tax credits to continue providing paid leave pursuant to the FFCRA until March 31, 2021.

Employers considering this option must note that the extended tax credits are only available for paid leave that meets all the requirements of the FFCRA. Employers, for example, cannot claim tax credits for paid leave that is given for reasons other than those allowed under the FFCRA or that exceeds the limits set forth in the FFCRA (amount, duration, etc.). Additionally, the final bill does not refresh or replenish the amount of paid leave an employee can take under the FFCRA, so employers cannot claim tax credits for wages paid to an employee in excess of 80 hours or 10 weeks.

It’s unclear whether interpretive regulations will be issued in the near future. Nevertheless, employers must now decide whether to continue providing paid COVID-19 leave under the FFCRA beyond December 31, 2020. As always, employers should proceed cautiously to avoid harmful and costly errors. Employers should also have Employment Practices Liability Insurance to protect against various employment-related claims. Please contact us to learn more about EPLI coverage.

Experts Are Predicting a Surge in Employment-Related COVID-19 Lawsuits

Employers have endured a parade of challenges since the coronavirus disease 2019 (COVID-19) pandemic began. The parade, it seems, is far from over.  According to a recent white paper co-sponsored by Liberty Mutual Insurance Company, there is early evidence that employment-related COVID-19 claims are on the rise. The white paper identifies various types of COVID-19-related employment claims that employers can expect to see in the near future.

Denial of Paid Leave. The Families First Coronavirus Response Act’s new paid sick leave and expanded family and medical leave requirements are expected to be the source of many COVID-19 cases. Claims may be based on various aspects of the law, including the denial of leave, the calculation of leave, requests for substantiating documentation and retaliation.

Discrimination. COVID-19-related characteristics have become yet another way to separate us from them (COVID positive or negative, real or hoax, facemask or freedom). The polarization of COVID-19 provides fertile ground for claims of discrimination.

Breach of Employment Contracts. Extreme measures are being taken to survive COVID-19’s unprecedented impact on the global economy, including layoffs, furloughs, reduced hours and reduced pay. Employers can expect breach of contract claims if any such remedial measures violate the terms of any employment agreements.

WARN Act. The federal Worker Adjustment and Retraining Notification Act generally requires employers with 100 or more full-time employees (not counting those on the job for fewer than six months) to provide at least 60 calendar days advance written notice of worksite closings or mass layoffs affecting 50 or more employees. COVID-19’s sudden and devastating impact made this impossible in many cases. Lawsuits are nevertheless expected. They will likely focus on the Act’s “unforeseeable business circumstances” exception to the 60-day notice requirements.

Wage & Hour Violations. Employers may see wage and hour claims from employees working remotely during the pandemic. Claims are likely to include allegations that employers failed to properly monitor, track or pay remote employees for all hours worked and that employers failed to reimburse employees for work-related expenses incurred while working remotely.

These are but a few examples of COVID-19-related claims that employers can expect to see. To reduce the likelihood of claims, employers should proceed cautiously when presented with any COVID-19-related matter. This may include seeking counsel from a licensed professional. Please contact us for additional information about protecting your business during the COVID-19 pandemic.

COVID-19 Paid Leave: When Does the Small Business Exemption Apply?

The Families First Coronavirus Response Act (FFCRA) requires paid sick leave and expanded family and medical leave for employees who miss work for specific reasons related to coronavirus disease 2019 (COVID-19). These requirements generally apply to private employers with fewer than 500 employees, but there is an exemption for employers with fewer than 50 employees. As you will see, this exemption is narrow and limited to very specific circumstances.

An employer with fewer than 50 employees is exempt from the FFCRA’s mandated paid sick leave or expanded family and medical leave requirements ONLY IF:

If both conditions are satisfied, the employer may claim the exemption for the requested leave, but ONLY IF an authorized officer of the business has determined that:

1. The requested leave would cause the business’s expenses and financial obligations to exceed its business revenues and would cause the small business to cease operating at a minimal capacity;

2. The absence of the employee requesting such leave would entail a substantial risk to the financial health or operational capabilities of the business because of employee’s 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 who is requesting such leave, and such labor or services are needed for the small business to operate at a minimal capacity.

To elect the exemption, the employer must document the fact that the required determination has been properly made. This documentation must be retained in the employer’s files and should not be sent to the Department of Labor. Employers have relatively broad discretion to determine whether providing the required paid leave would jeopardize the viability of their business as a going concern. However, the Department of Labor encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.

To avoid costly violations of the FFCRA, employers should proceed cautiously when interpreting and applying the law’s exemptions. Employers should also consider Employment Practices Liability Insurance to protect against various employment-related claims. Please contact us to learn more about EPLI coverage.

Documenting Paid COVID-19 Leave Under the Families First Coronavirus Response Act

Employers are required to document employee requests for paid sick leave or expanded family and medical leave under the Families First Coronavirus Response Act, regardless of whether the request is granted or denied. Department of Labor FFCRA regulations specify the kind of information that employees must provide and that employers must document prior to commencing COVID-19 leave. According to the DOL, documentation for paid COVID-19 leave must include:

  • the employee’s name;
  • the dates for which leave is requested;
  • the reason for leave; and
  • an oral or written statement from the employee that he or she is unable to work because of the stated reason for leave.

Depending on the reason for paid leave, employees may need to provide additional information that must be documented by employers. An employee requesting paid sick leave because he or she is subject to a federal, state or local COVID-19 quarantine or isolation order must provide the name of the government entity that issued the order. An employee who has been advised by a health care provider to self-quarantine due to COVID-19 concerns must provide the name of the health care provider.

An employee requesting paid sick leave to care for an individual who is subject to quarantine or isolation order or who has been advised by a health care provider to self-quarantine must provide the employer with either the name of the government entity that issued the order or the name of the health care provider that advised the individual to self-quarantine. The “individual” requiring care must be an 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 of care.

An employee requesting paid sick leave or expanded family and medical leave to care for a minor son or daughter whose school or place of care is closed due to COVID-19 must provide:

  • school, place of care or child care provider that is closed or unavailable; and
  • a representation that no other suitable person will be caring for the child during the period for which the employee is requesting leave.

Employees must also provide any additional information required by the Internal Revenue Service for the employer to claim the tax credit for providing paid leave under the FFCRA. An employer is not required to provide FFCRA leave to an employee who fails to provide information or materials needed to support the employer’s claim for a tax credit.

Employers should proceed cautiously when presented with requests for COVID-19 leave to ensure compliance with the FFCRA’s requirements. This may include seeking counsel from a licensed professional. Please contact us for additional information about protecting your business during the COVID-19 pandemic.