The Clock Is Ticking

If you’re an employer that hasn’t already started or made plans to comply with the paid leave entitlements of the Families First Coronavirus Response Act (“FFCRA”), you may not have as much time as you think.

Even though the provisions of the FFCRA don’t go into effect until April 1st, the U.S. Department of Labor (“DOL”) announced Tuesday that the 30-day nonenforcement grace period for the FFCRA applies retroactively to the law’s March 18th enactment date. That means the Department will begin penalizing employers who fail to comply with the virus relief law on April 18th rather than May 1st.

Enforcement Leniency Explained

The DOL further explained that enforcement leniency will only be given to those employers who act “reasonably” and “in good faith” during the temporary nonenforcement period.

Not sure what the DOL considers “good faith”? Not to worry – the DOL has provided a list of 3 things employers must show or do:

  1. The violations were not willful;
  2. Remedy the violations by paying employees all wages owed as soon as practicable; AND
  3. Commit in writing to comply with the Acts going forward.

The Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family Medical Leave Expansion Act (“EFMLEA”) require employers with fewer than 500 employees to provide 2 weeks of paid sick leave for certain COVID-19-related reasons as well as 10 weeks of partially paid family leave to care for children whose school or daycare closed due to the Pandemic.

Healthcare providers and emergency responders are specifically excluded from the Acts. Additionally, employers with fewer than 50 employees may be exempt from the Acts if they can show paying the expanded leave benefits would jeopardize the long-term survival of their business.

You’ve got questions, the DOL has some answers (finally).

Late Wednesday night, the DOL finally offered its interpretation of the practical implications of paid leave under the virus relief act. Clocking in at 37 topics, the Q & A is fairly extensive and provides much needed guidance on the FFCRA’s fuzzier provisions. Here are some of the highlights:

  • Paid sick and family leave benefits are not retroactive to April 1st;
  • Employers who close or lay off/furlough/terminate employees BEFORE April 1st do not have to pay sick leave or expanded FMLA benefits;
  • Employers who close or lay off/furlough/terminate employees AFTER April 1st do not have to pay sick leave or expanded FMLA benefits after the date of closure;
  • Employees furloughed on or after April 1st are not entitled to then take paid sick leave or expanded family and medical leave;
  • Paid sick and family leave benefits may be taken intermittently in certain circumstances;
  • A reduction in work hours will not trigger EPSLA and EFMLEA benefits, but will likely trigger unemployment benefits eligibility; and
  • Employees may not collect unemployment benefits while receiving paid sick leave and/or expanded family and medical leave.

The newly released Q & A also clarifies other FFCRA topics such as pay calculations, the interaction between the EPSLA and EFMLEA, the continuation of healthcare benefits during paid sick leave and expanded family and medical leave, and recordkeeping requirements. Be sure to keep this Q & A handy as April 1st draws near.

Getting credit where credit is due.

The FFCRA comes with a quarterly tax credit against social security taxes for 100% of wages paid for qualified sick leave and leave taken under the expanded FMLA. Up until now, employers didn’t have much in the way of guidance except that the credit would be applied against the employer portion of social security payments and that it would be refundable to the extent the credit exceeded such payments.

Although employers are still waiting for guidance on just how that’s going to work, the $2 trillion virus relief package passed by Congress this week known as the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) fleshes out the tax credit particulars a bit more. Under the CARES Act, the U.S. Treasury can advance tax credit up to the amount of wages employers pay for qualified sick leave and family leave. The CARES ACT also waives certain IRS penalties for employers failing to deposit social security taxes in anticipation of taking the quarterly tax credit.

The FFCRA workplace posters are here.

The DOL also released 2 FFCRA workplace posters yesterday – one for private employers and one for federal employers.

Just like with other DOL compliance posters, employers must post the applicable FFCRA poster in a conspicuous place no later than April 1, 2020. Is your workplace closed right now? You still have to notify current employees either via email, U.S. Mail, or by posting the notice on an internal employee information website. As soon as you are able, get a hard copy up in your workplace.

Questions about the poster or required notifications? The DOL just posted a FAQ section that may shed some light.

Still have questions about the legal implications your business is facing during the pandemic? Send us an email or give us a call. Lincoln Derr can help guide you through this unprecedented time.

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Kathleen (Kathi) Lucchesi

Kathi Lucchesi regularly advises her clients in connection with all types of employment issues both in and out of the workplace. She works with employers in connection with the hiring, discipline and termination of employees, policy drafting and implementation, claims for wrongful discharge and discrimination, unemployment, FMLA and Wage & Hour violations, and EEOC, DOL, ESC, DOJ, and Title IX investigations.

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