On April 6, 2020, the Department of Labor (DOL) published regulations on paid leave programs that were first created as part of the Families First Coronavirus Response Act (FFCRA) and later revised in the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The regulations are temporary and will run through December 31, 2020.
The FFCRA and CARES Act were quickly passed to offer new paid leave options for employers with fewer than 500 employees. These options include emergency paid sick leave and emergency FMLA. The new DOL regulations offer clarifications to help SMB leaders manage these new options. Below are five things you need to know to stay compliant.
Which Businesses Are Affected?
Generally, private employers with fewer than 500 employees are required to provide FFCRA leave to employees for qualified COVID-19 related reasons.
How to Determine if You Are Impacted
First, count the following types of employees that make up your workforce:
- Full-time and part-time
- Employees on leave
- Temporary employees who are jointly employed by you and another employer
- Individuals provided through a temp agency
Note: Independent contractors and employees who have been furloughed or laid off do not count towards the 500-employee threshold.
Reasons for Leave
An employee can receive paid sick leave because of self-quarantine if he/she is unable to work at the normal place of business or telework. This recommendation must come from a professional healthcare provider who has concluded that the employee has COVID-19, may have COVID-19 or is vulnerable to COVID-19.
- Any employee who experiences COVID-19 symptoms may take paid sick leave for making, waiting for or attending an appointment for COVID-19 testing as long as they are seeking a diagnosis from a medical professional.
- Any employee who cannot telework may take paid sick leave while awaiting a test result.
- Any employee who can telework while waiting for test results may not take paid sick leave, unless they are suffering from extreme COVID-19 symptoms.
Caring for Another Individual
Per new regulations, an employee cannot take paid sick leave to care for someone with whom the employee has no personal relationship. An employee is eligible for paid sick leave if they are caring for an immediate family member, roommate or similar person with whom the employee has a relationship.
An employee is only eligible for paid sick leave to care for his or her own child, including stepchild. Employees must also certify that no other “suitable” caretaker is available to care for the employee’s child needs. A suitable caretaker is defined as a co-parent, co-guardian or usual childcare provider. An employee requesting sick leave to care for a child may also be entitled to an additional ten weeks of paid FMLA leave, so long as they were employed for at least 30 days prior to requesting leave.
Small Business Exemption
If an employee requests sick leave to care for a child, the small business is exempt from approving paid sick leave if the requirement would jeopardize the viability of a business.
Any small business that denies FFCRA leave must create and retain documentation supporting their decision. To use the exemption, an employer must show one of the following:
- Allowing the leave would cause the business to cease operating at minimal capacity
- The absence of the employee would entail a substantial risk to the business
- The employer is unable to find a capable substitute to ensure operations continue in a minimal capacity
Employers are required to retain all documentation of FFCRA paid leave requests for four years, regardless if the leave request is granted. Employers should also create and retain documents that support claims for tax credits including:
- How the employer determined amount of leave paid to employees
- How the employer determined amount of qualified health plan expenses allocated to the leave
- Copies of completed IRS Form 7200
- Copies of completed IRS Forms 941
- Other documents needed to support its request for tax credits
An employer may only ask for the following information:
- The employee’s name
- The dates leave is requested
- The qualifying reason for the leave
- A statement that the employee is unable to work or telework
- The name of the government entity that issued the quarantine or isolation order
- The name of the healthcare provider who advised the employee to quarantine
- The name of the child being cared for and their school/care provider that has closed
Emergency Paid Sick Leave and Emergency FMLA Request Form
To help SMBs capture leave requests, Paycor has created an Emergency Paid Sick Leave and Emergency FMLA Request Form that you can share with your employees. The form will allow you to capture the proper documentation needed when managing leave requests.