A few weeks ago President Trump signed into action the Families First Coronavirus Response Act (FFCRA), which includes the Emergency Paid Sick Leave Act (herein referred to as “sick leave”) and the Emergency Family and Medical Leave Expansion Act (herein referred to as “family leave”), offering relief to those impacted by COVID-19. For a summary of this Act please click here for our webinar recording, COVID-19: What PA Business Owners Need to Know.
The U.S. Department of Labor (DOL) has issued additional guidance on certain parts of this Act in response to questions received from many businesses and individuals. Below is a summary of this guidance.
What Documentation is Needed for Leave?
The DOL and the Act itself mention that documentation is a requirement and are saying that documentation should be maintained for four years. While doctor’s notes or school and daycare closure notices are helpful it is now required to have a signed employee statement with the following information:
- The employee’s name
- The date(s) the employee is requesting leave
- The COVID-19 qualifying reason for leave (which can be found on the employer notice that should be posted in the workplace or emailed to employees) AND
- A statement that the employee is unable to work or telework because of the COVID-19 qualifying reason
Depending on the reason for qualifying leave the employee must provide additional documentation as follows:
- An employee requesting “sick leave” due to a federal, state or local quarantine or isolation order must provide the name of the government entity that issued said order to which employee is subject
- An employee requesting “sick leave” on the advice of a health care provider who advised the employee to self-quarantine due to COVID-19 concerns must provide the name of the health care provider who issued said advice
- An employee requesting “sick leave” due to caring for an individual or family member with COVID-19 must provide the same information above (the name of the government agency or the health care provider)
- An employee requesting to take “sick leave” and then “family leave” to care for a child due to school or child care closures, or unavailability of child care due to a public health emergency, must provide the following:
- The name of the child being cared for
- The name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 AND
- A statement that no other suitable person is available to care for the child during the requested period of leave
An employer is required to notify employees of these leave options under the FFCRA. A PDF of the notice can be found here and should be posted in areas visible to all employees and emailed or mailed to those employees not at the physical location.
Under 50 Employee Exemption
Note: The following exemption only applies to employees claiming “sick leave” or “family leave” due to the care of a child.
The DOL has issued guidance stating that employers, including religious or non-profit organizations, with fewer than 50 employees are exempt from providing (1) paid sick leave due to school or place of care closures for COVID-19 related reasons, and (2) expanded family and medical leave due to school or place of care closures for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern.
The guidance explains that a small employer is exempt from these requirements to provide leave when:
- Such leave would cause the small employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity
- The absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities, or
- The small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and this labor or these services are needed for the small employer to operate at a minimal capacity
If the employer decides to deny “sick leave” or “family leave,” they must document the facts and circumstances that justify the denial. This information should not be sent to the DOL but should be retained in the employer’s files.
Health Care Workers
The “sick leave” and the “family leave” both provide that an employer may exclude employees who are health care providers or emergency responders from leave requirements under the Acts. The FFCRA adopts the FMLA definition of “health care providers,” which includes licensed doctors of medicine or osteopathy. The term “health care provider,” however, is not limited to diagnosing medical professionals. Rather, such health care providers include any individual who is capable of providing health care services necessary to combat the COVID-19 public health emergency. Such individuals include not only medical professionals, but also other workers who are needed to keep hospitals and similar health care facilities well supplied and operational. They further include, for example, workers who are involved in research, development, and production of equipment, drugs, vaccines, and other items needed to combat the COVID-19 public health emergency.
Recording the Credit for Taxes Paid
As an employer any “sick leave” or “family leave” paid out is eligible as a tax credit against your scheduled 941 deposit (for more information on the credit itself refer to our webinar COVID-19: What PA Business Owners Need to Know here). Rather than record this credit as an offset to wages or payroll taxes, guidance is stating that this credit should be recorded as an “Other Income” amount. This does NOT mean you are being taxed on it, it means you will record the credit as income and the expense of the wages as you normally would so it offsets. We recommend you discuss the reporting with your payroll service provider as they will need to provide you with this information.
As always, we are here to help. If you have any questions about any of the above information please contact your DunlapSLK team member.