Compliance News | March 30, 2020

DOL Guidance on Paid Leave Related to COVID-19

The Families First Coronavirus Response Act (FFCRA) provides for two new types of leave for governmental employers and private employers with fewer than 500 employees: Emergency Family and Medical Leave and Emergency Paid Sick Leave. The leave provisions of the FFCRA are effective from April 1, 2020 through December 31, 2020.

On March 27, 2020, DOL issued guidance on those leave provisions. The guidance, which includes fact sheets for employees and employers, as well as an extensive set of answers to frequently asked questions, addresses several key implementation issues.

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Key implementation issues addressed

  • An employer must post a notice of the FFCRA rules in a conspicuous place on its premises. Since employees may be working remotely, this can be done by emailing or direct mailing the notice, or posting the notice on an employee intranet site or an external website.
  • Employers must require and retain documentation of the reasons for the leave. That documentation should include the employee’s name; the qualifying reason for requesting leave, a statement that the employee is unable to work, including telework, for that reason; and the date(s) for which leave is requested. Employers should also request documentation of the reason for the leave, such as the source of any quarantine or isolation order, or the name of the health care provider who has advised to self-quarantine. For childcare-related leave, the documentation should include proof of the school closings, such as a newspaper or email. Keeping the proper documentation is important and is necessary if the employer intends to claim a tax credit.
  • Employees are entitled to paid sick leave for up to 80 hours (prorated for part-time employees) with a maximum $511 per day or $5,110 total, if the paid sick leave is because the employee is subject to a federal, state, or local quarantine or isolation order; has been advised by a health care provider to self-quarantine; or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
  • Employees are entitled to two-thirds of compensation for paid sick leave up to $200 per day or $2,000 total, if the leave is for caring for a sick or quarantined individual or for a child under 18 whose school is closed or caregiver is unavailable.
  • Family and medical leave is available for up to 12 weeks for caring for a child under 18 whose school is closed or caregiver is unavailable. The first two weeks of family and medical leave are unpaid and the remaining leave must be paid at two-thirds of compensation up to $200 per day or $12,000 (over a 12-week period — two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave).
  • Employees are entitled to leave payments based on their regular rate of pay or the state or federal minimum wage, whichever is greater (subject to the dollar maximums mentioned above). Regular rate of pay is the average of the employee’s regular rate over a period of up to six months prior to leave. DOL provides guidance on calculation of hours for part-time employees based on the average number of hours in a two-week period, and notes that overtime hours worked must be included in the calculation.
  • Employees must be working when a qualifying event occurs in order to take family and medical leave or paid sick leave. Consequently, if a workplace closes or furloughs employees either before or after April 1, this leave would not apply. However, the employee would likely be eligible for expanded unemployment insurance benefits.
  • Employer-sponsored health coverage must be continued during an emergency family and medical leave under the same terms and conditions as usually occur under the FMLA. DOL also requires that employer-sponsored health coverage be continued under the paid sick leave, because to terminate coverage would violate the HIPAA nondiscrimination rules.
  • In general, private sector employers that pay sick or family and medical leave will be able to retain an amount of their payroll taxes equal to the amount of leave paid. After this insight was posted, the IRS published updated guidance on how to claim the credits. Although the FFCRA requires most governmental employers to provide paid leave, it does not entitle them to tax credits for this leave.

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), signed on March 27, 2020, made minor clarifying amendments to the leave provisions of the FFCRA.

 

On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their legal counsel for legal advice.

Have questions about the new federal leave requirements?

We have answers and can help coordinate the leave with existing disability, leave programs and state leave requirements.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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