The Family First Coronavirus Response Act (FFCRA), which took effect on April 1, 2020, provides two paid leave benefits for certain employees, including two weeks of Emergency Paid Sick Leave and up to 12 weeks of Enhanced Family and Medical Leave (FMLA).
In its guidance, the US Department of Labor (DOL) provided for a month-long non-enforcement period, which expired on April 17, 2020. DOL enforcement has begun; therefore, it is now more critical than ever that employers understand their obligations under the FFCRA, ensure employees have received notice of their rights under the FFCRA, and properly document requests for FFCRA leave. An employer’s failure to meet its obligations could result in penalties from the DOL and jeopardize the employer’s valuable tax credit entitlement.
Step One: Provide Required Notice
As of April 1, 2020, certain public-sector employers and all private-sector employers with less than 500 employees should have provided notice of employee rights under the FFCRA. The DOL has issued a poster, which must either be posted in a conspicuous place or, in the event of a remote workforce, be emailed or mailed directly to employees. The notice need not be distributed to recently separated individuals or job applicants. Critically, even employers who are claiming an exemption to the FFCRA, such as the small business exemption, must post this notice. Employers who have not yet provided notice should do so immediately.
Step Two: Collect Required Documentation From Employees
Employees must provide reasonable notice of the need to take leave under the FFCRA. Ideally, this notice should precede any missed work; however, at a minimum, it must be provided as soon as practicable after an employee’s first missed workday. If an employee fails to provide the required notice, the employer must notify the employee and give the employee an opportunity to provide the necessary documentation.
Before the employer determines whether a requested leave qualifies as paid leave under the FFCRA, the company must obtain the following written documentation from the employee:
- The date or dates for which leave is requested;
- A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
- A statement that the employee is unable to work, including by means of telework, for such reason.
In the case of an Emergency Paid Sick Leave request based on a quarantine order or self-quarantine advice, the statement from the employee must include the following:
- The name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine; and
- If the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.
In the case of either Emergency Paid Sick Leave or FFCRA-enhanced FMLA leave request based on a school closing or child care provider unavailability, the statement from the employee must include the following:
- The name and age of the child (or children) to be cared for;
- The name of the school that has closed or place of care that is unavailable;
- A representation that no other person will be providing care for the child during the period for which the employee is receiving FFCRA-enhanced FMLA; and
- With respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
The employer may not require that employees provide more documentation than that described above. Additionally, if an employee fails to provide the required notice and documentation, similar to the traditional FMLA certification process, the employer must provide the employee with notice of the failure and an opportunity to provide the required documentation prior to denying the request for leave.
At this point in the process, the employer should also endeavor to understand the following from the employee:
- Whether the employee wishes to supplement their paid leave with accrued PTO or other time off, assuming the employer’s FMLA policy does not require such leave to be exhausted;
- Whether the employee is requesting to use the FFCRA-enhanced FMLA leave intermittently; and
- Whether the employee will utilize Emergency Paid Leave during the first two unpaid weeks of FFCRA-enhanced FMLA leave.
Step Three: Provide Notice of Decision to Employees
The DOL regulations explicitly do not adopt the employer notice regulations or specific notice obligations that are required for traditional FMLA leave. Specifically, “the FFCRA regulations do not require employers to respond to employees who request or use EFMLEA leave with notices of eligibility, rights, and responsibilities, or written designations that leave use counts against employees' FMLA leave allowances.”
Accordingly, although employers have flexibility as to the manner of communicating their leave decisions to employees, employers should continue to document their decision-making and clearly explain to employees what their benefits will be while on leave and upon return.
Step Four: Maintain Required IRS Records
Eligible employers may take advantage of tax credits designed to offset the full cost associated with providing paid leave under the FFCRA. Specifically, employers that provide paid FFCRA leave may retain the portion of their federal employment taxes, including federal income taxes withheld from employees, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes, equivalent to the number of qualified leave wages paid, in addition to allocable qualified health plan expenses.
To avail themselves of these valuable tax credits, the following documentation must be maintained by employers for four years after the tax becomes due or is paid, whichever is later:
- Documentation evidencing how the employer determined the amount of Emergency Paid Sick and FFCRA-enhanced FMLA wages paid to employees that are eligible for the credit, including records of work, telework, and paid sick leave and family leave under the FFCRA.
- Documentation reflecting how the employer determined the amount of qualified health plan expenses the employer allocated to wages.
- Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, the employer submitted to the IRS.
- Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, 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 Form 941).
For guidance on providing notice and documentation of leave under FFCRA, consult the DOL regulations and FAQs or consult with employment counsel.