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FFCRA Update: Implementation Date Accelerated from April 2 to April 1

Update: The DOL issued its first round of guidance and accelerated the date of FFCRA implementation from April 2 to April 1, 2020. Employers with fewer than 500 employees will need to have policies and leave request forms in place by March 31, 2020 to take effect on April 1, 2020. This pertains to the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA).

The Families First Coronavirus Response Act was signed into law on March 18, 2020, and provides several responses to address the ongoing coronavirus pandemic, including providing for free coronavirus testing, giving a boost to funding for state unemployment compensation (subject to states waiving work search requirements and the waiting week), and leave for employees affected by coronavirus through the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. The FFCRA also provides refundable tax credits for employers providing the required paid family and sick leave to employees in connection with this public health emergency.

How disruptive is it?

  • The bill is effective April 1, 2020.
  • It expires on December 31, 2020.
  • The bill does not prevent employers from modifying their existing leave policies.
  • The bill does not prevent a legitimate Reduction in Force (RIF).

What should we do first?

  • Harmonize and update your leave policies with the new requirements.
  • Implement a record keeping procedure for tracking leave.
  • Contact your tax advisor.
    • The federal government is essentially asking employers to front continued wages for affected employees (up to either $12,000 or $15,510), with the promise to reimburse the employers 100% for those costs and related healthcare coverage costs through tax credits and/or refunds.  Please note that this is a simplified version of the complex advice provided by Chuck Mullen of Apple Growth Partners.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

EFMLEA temporarily amends the FMLA to provide leave related to the current coronavirus public health emergency.  It provides a new basis for leave for employees to care for their children while schools and childcare are closed.   

Who is now eligible for leave under EFMLEA?

Employees are eligible under EFMLEA after working for the employer for at least 30 calendar days.

  • There are no minimum hour requirements.

What employers are subject to EFMLEA?

Employers with fewer than 500 employees and government employers of any size must comply with EFMLEA.  The Department of Labor (DOL) has authority to exempt businesses with fewer than 50 employees if the requirements of this law would jeopardize their viability.

  • The DOL has not issued the exemption rules as of publishing. We will update.

What are the reasons for the use of leave under EFMLEA?

EFMLEA requires that employers provide leave to employees who are unable to work (or telework) because the employee is caring for a son or daughter under 18 due to coronavirus-related closure of school or childcare.

  • The Employee Survey provided in our previous post is the best tool to forecast the disruption.
  • Employees are still required to give practicable advanced notice of the need for leave.

How much leave is an employee entitled to under EFMLEA?

Eligible employees are initially entitled to 10 days of unpaid leave. 

  • Employees are given the election to us accrued leave or other forms of leave for the initial 10 days.
  • This will likely require a modification to all existing FMLA policies.

If the need for leave continues beyond 10 days, employees are entitled to paid leave based on their regularly scheduled hours, but at 2/3 of their regular rate of pay and with a cap of $200 per day and $10,000 in the aggregate. Once the cap is reached, any remaining leave up to the 12-week FMLA maximum need not be paid.  

Are employees required to provide documentation supporting EFMLEA leave?

The law is silent regarding documenting the reasons for leave.  The DOL may provide additional guidance.

  • Require employees to submit a written request.
  • Make sure to track all leave payments for applicable tax credits.

Is an employee entitled to return to work after EFMLEA leave?

Consistent with the FMLA, employers must return employees to an equivalent position when leave ends. EFMLEA adds a requirement for employers with fewer than 25 employees, if the position was eliminated because of the economic or operating conditions created by coronavirus. Those employers must continue to make reasonable efforts to restore the employee to an equivalent position for a one- year period. 

Emergency Paid Sick Leave Act (EPSLA)

EPSLA temporarily mandates that certain employers provide paid sick leave benefits for several types of coronavirus-related absences.  EPSLA can be utilized concurrently with the initial 2-week unpaid leave period under EFMLEA, if an employee is eligible for both forms of leave.

Who is now eligible for paid leave under EPSLA?

All full-time and part-time employees.

  • There is no minimum requirement for eligibility.

What employers are subject to EPSLA?

Employers with fewer than 500 employees and government employers of any size. 

  • EPSLA does not contain the same small business exception as EFMLEA

What are the reasons for use of paid sick leave under EPSLA? 

EPSLA requires that employers provide paid sick time to employees who are unable to work or telework because the employee:

(1) is subject to a coronavirus quarantine or isolation order,

(2) has been advised by a healthcare provider to self-quarantine due to coronavirus,

(3) is experiencing coronavirus symptoms and seeking a diagnosis,

(4) is caring for an individual subject to a coronavirus quarantine or isolation order or advised by a healthcare provider to self-quarantine due to coronavirus,

(5) is caring for their child due to coronavirus-related closure of school or childcare, or

(6) is experiencing any other substantially similar condition.  

Note that employers of health care providers or emergency responders may elect to exclude such employees from this leave entitlement.

How much paid sick leave is an employee entitled to under EPSLA?

Eligible full-time employees are entitled to 80 hours of paid sick leave.  Eligible part-time employees are entitled to paid sick leave equal to the number of hours they work on average in a two-week period.  Paid sick leave for reasons 1-3 listed above is based on an employee's full regular rate of pay, but is capped at $511/day or $5,110 in the aggregate.  Paid sick leave for reasons 4-6 listed above is based on 2/3 of an employee's regular rate of pay, and is capped at $200/day or $2,000 in the aggregate. 

  • Tax credit is based upon the type of leave payments, which emphasizes the importance of recordkeeping.

What are the limitations on existing sick leave policies?

Employers may not require employees to use or exhaust other forms of paid leave prior to using this paid sick leave. 

Are employees required to provide documentation supporting EPSLA leave?

The law is silent regarding documenting the reasons for leave, but employers must require contemporaneous written requests from employees.  The DOL may provide additional guidance. 

What other employee protections are included in EPSLA?

Employers may not retaliate or discriminate against employees who take leave under EPSLA. 

What penalties do employers face for noncompliance?

Failure to pay sick leave under EPSLA is treated in the same manner as a minimum wage violation under the FLSA

What are your recommendations for employers?

  • Begin by analyzing and modifying your existing sick leave policies to match with the new requirements.
  • If you are concerned about implementing a Reduction in Force, begin the planning function now to avoid potential implications of leave requirements.
  • Analyze the cost and credit outcomes on a worst-case scenario of sick leave of $15,510 or $12,000 for all employees. 

For questions, please contact Jeffrey Miller at jcmiller@bmdllc.com or 216.658.2323, or contact any member of the BMD Employment & Labor Law Practice Group.

Florida’s “Stay-at-Home” Order and What it Means for Businesses

On April 1, 2020, in response to the State’s ongoing efforts to fight the spread of COVID-19, Governor Ron DeSantis issued Executive Order 20-91, which is State-wide “Stay-at-Home” Order. The Order goes into effect Friday, April 3, 2020 at 12:01 a.m., and expires on April 30, 2020, unless extended by subsequent order (the full text of the order is available here).

CMS Offers New Stark Waivers and More Flexibility to Health Care Providers Due to COVID-19

On March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued several temporary regulatory waivers to further enable the American healthcare system to respond to the COVID-19 pandemic with more efficiency and flexibility. The official publication can be found here: Physicians and Other Clinicians: CMS Flexibilities to Fight COVID-19.

#CancelRent – What’s Next for Landlords?

Across the country, residential tenants, small businesses, and even national retailers such as Cheesecake Factory, Subway, and Mattress Firm have declared war on their landlords by refusing to pay rent on account of the Covid-19 pandemic (“COVID-19”). This has sent shockwaves through the real-estate industry. As of April 1st, residential tenants owe an estimated $40 Billion in rent. Estimates for the commercial sector are not far off. So far, federal, state, and local measures have focused on providing relief to residential and commercial tenants and even to some commercial landlords.

Record Keeping Requirements to Receive FFCRA IRS Tax Credit

On April 1, 2020, the IRS and Department of Labor issued temporary regulations to provide clarity regarding the documents required by employees requesting leave under the Families First Coronavirus Response Act (FFCRA) and the documentation that employers need to maintain.

Eviction & Foreclosure During the COVID-19 Pandemic

Like most areas of our society, the COVID-19 pandemic has greatly impacted the business relationships between landlords and tenants and between lenders and borrowers. In most states, non-essential retailers and other businesses have closed their doors and are doing business online, to the extent that they can. Some businesses, like The Cheesecake Factory, have announced that they would not be paying rent at any of their locations for at least a month due to the pandemic. Landlords and homeowners are concerned about being able to pay their mortgages and tenants are concerned about being able paying their rent.