Friday, April 3, 2020

How to document employee paid sick leave and FMLA requests under FFCRA

The new DOL FFCRA regs provide important rules for documentation of employee leave requests and recordkeeping. As a reminder, for the rest of the year, employees get up to 80 hours of paid sick leave for any of the following six reasons:
1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19; 
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; 
3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; 
4. The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; 
5. The employee is caring for his or her son or daughter because the school or place of care of the employee’s son or daughter has been closed or is unavailable due to COVID-19 precaution; or 
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Employees can take up to 12 weeks of emergency FMLA (the last 10 weeks, paid) only for reason #5 above. Note that "paid" for FMLA and sick leave here is capped and only 2/3 pay for reasons 4-6. What documentation can an employer require?

For all reasons (1-6):

(1) Employee’s name;
(2) Date(s) for which leave is requested;
(3) Qualifying reason for the leave; and
(4) Oral or written statement that the Employee is unable to work because of the qualified reason for leave.

Plus reason-specific documentation for Reasons 1, 2, 3, and 5.

Reason #1

"Employee must additionally provide the Employer with the name of the government entity that issued the Quarantine or Isolation Order."

Reason #2

"Employee must additionally provide the Employer with the name of the health care provider who advised the Employee to self-quarantine due to concerns related to COVID-19."

Reason #3 (This regulation refers to Reason #3, but contextually, this certainly seems to match more with Reason #4 - perhaps a typo?). 

"Employee must additionally provide the Employer with either:

(1) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being care for is subject; or

(2) The name of the health care provider who advised the individual being cared for to selfquarantine due to concerns related to COVID-19."

Reason #5

"[A]n Employee must additionally provide:

(1) the name of the Son or Daughter being cared for;

(2) the name of the School, Place of Care, or Child Care Provider that has closed or become unavailable; and

(3) a representation that no other suitable person will be caring for the Son or Daughter during the period for which the Employee takes Paid Sick Leave or Expanded Family and Medical Leave."

Catchall

"The Employer may also request an Employee to provide such additional material as needed for the Employer to support a request for tax credits pursuant to the FFCRA. The Employer is not required to provide leave if materials sufficient to support the applicable tax credit have not been provided. For more information, please consult https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs."

Recordkeeping

Employers must keep documentation for four years, including documentation of oral requests, rejected requests, and exemptions/exceptions. To claim the tax credit, employers are "advised" to maintain:
(1) Documentation to show how the Employer determined the amount of paid sick leave and expanded family and medical leave paid to Employees that are eligible for the credit, including records of work, Telework and Paid Sick Leave and Expanded Family and Medical Leave; 
(2) Documentation to show how the Employer determined the amount of qualified health plan expenses that the Employer allocated to wages; 
(3) Copies of any completed IRS Forms 7200 that the Employer submitted to the IRS;  
(4) Copies of the completed IRS Forms 941 that 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 IRS Form 941, and  
(5) Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit. For more information, please consult https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs.





Thursday, April 2, 2020

Stay-at-home orders as "quarantine or isolation" orders under the FFCRA

Welp, yesterday's release of the DOL regs for the FFCRA answered one question: Are statewide shelter-in-place or stay-at-home orders a form of "quarantine or isolation" order that justifies emergency paid sick leave? Yes. But, the explanation sure seems to gut the rule.

Definition of "subject to a quarantine or isolation order"

Under the FFCRA, employees are eligible for emergency paid sick leave if they are unable to work (or telework) because they are "subject to a quarantine or isolation order." We finally have a definition:
Subject to a Quarantine or Isolation Order. For the purposes of the EPSLA, a quarantine or isolation order includes quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by any Federal, State, or local government authority that cause the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order. This also includes when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them.
(underline added). Welp, that settles it - "shelter-in-place, or stay-at-home orders" count! Not so fast. 

The coffee shop is closed

The employee is still not eligible for leave if the employer does not have work for the employee. The regs include a lengthy (~60 pages) summary, which includes a coffee shop example:
For example, if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it would no longer have any work for its employees. A cashier previously employed at the coffee shop who is subject to a stay-at-home order would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.
A footnote, makes it even harder for employees to take advantage of a stay-at-home order:
Gov. Wolf
This analysis holds even if the closure of the coffee shop was substantially caused by a stay-at-home order. If the coffee shop closed due to its customers being required to stay at home, the reason for the cashier being unable to work would be because those customers were subject to the stay-at-home order, not because the cashier himself was subject to the order. Similarly, if the order forced the coffee shop to close, the reason for the cashier being unable to work would be because the coffee shop was subject to the order, not because the cashier himself was subject to the order.
Let's take a step back and examine Governor Wolf's stay-at-home order and apply the rule to it. 

Governor Wolf's stay-at-home order 

In Pennsylvania, Governor Wolf has issued a statewide stay-at-home order. Notably, it allows people to leave their homes to work at a life-sustaining business. Therefore, those employees will presumably be unable to use emergency sick leave under the "quarantine or isolation" order provision (unless they are individually subject to something more specific). What about employees of non-life-sustaining businesses? The physical locations for those business have closed (they're the closed "coffee shops" from the summary of the regs). So, it's hard to see how those employees would be eligible for emergency paid sick leave either. To the extent those businesses can still operate remotely - well, a stay-at-home order will not generally prevent someone from working from home, right? So, what's left?

The lawyer's power outage

The summary provides an example of a lawyer who is working from home ("telework" in the language of the statute):
For example, if a law firm permits its lawyers to work from home, a lawyer would not be prevented from working by a stay-at-home order, and thus may not take paid sick leave as a result of being subject to that order. In this circumstance, the lawyer is able to telework even if she is required to use her own computer instead of her employer’s computer. But, she would not be able to telework in the event of a power outage or similar extenuating circumstance and would therefore be eligible for paid sick leave during the period of the power outage or extenuating circumstance due to the quarantine or isolation order.
Okay - so, employees subject to a stay-at-home order, who work for a non-life-sustaining business, that has not shut down, and provides teleworking will be eligible for emergency paid sick leave during a power outage? Frankly, I don't even understand this one relatively obscure example. Wouldn't it be the power outage, and not the stay-at-home order, that prevented the attorney from working?

I mean, presumably we can come up with other scenarios where the teleworking employee is prevented from working... but it sure seems like the general rule (that stay-at-home orders "count") has been swallowed by the explanation (that the orders don't count where there is a lack of work resulting from the order as applied to the business generally).  

Wednesday, April 1, 2020

New DOL regs ("temporary rule") for FFCRA are here!

Hot off the press, new DOL press release: U.S. Department of Labor Announces New Paid Sick Leave and Expanded Family and Medical Leave Implementation. The main attraction is, of course, the long-awaited (14 days is a long time in coronovirus response world) regulations dubbed the "temporary rule." DOL will also post a recorded webinar here on Friday.  

Yes, I will read the regs and provide some analysis. Not sure what form that will take yet - but probably a series of blog posts. Stay tuned (I feel like I've been typing that a lot lately).  

New IRS guidance on claiming FFCRA tax credits

Sick of all of the DOL updates? Well, now you can head on over to the IRS website instead for some new guidance: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs. That's not all! The IRS has an entire Coronavirus Tax Relief page, with news releases, FAQs, guidance, and more. There is way too much information for me to try to distill down to a blog post. That said, the number one question I'm getting on the tax credit front is: as an employer, what documentation do I need (similarly, what must an employee provide)?

See Question 44:
44. What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?

An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:  

1.  The employee’s name; 
2. The date or dates for which leave is requested; 
3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and 
4. A statement that the employee is unable to work, including by means of telework, for such reason. 

In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include 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 a leave request based on a school closing or child care provider unavailability, the statement from the employee should include 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, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave 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.
Again, dive into the full FAQs for some great information. Also, I think we are supposed to see FFCRA regs from DOL later today, so check back soon!

Monday, March 30, 2020

What Should Businesses and Individuals Know About the Coronavirus Aid, Relief, and Economic Security ("CARES") Act?

I know, I know, you feel inundated with resources - let me just throw one more whitepaper on the stack. This one is a team effort from five of my colleagues at McQuaide Blasko: What Should Businesses and Individuals Know About the Coronavirus Aid, Relief, and Economic Security ("CARES") Act? That should tide you over at least until the FFCRA regs come out (anticipated on Wednesday, but you never know). 

New whitepaper: Governor Wolf Announces Financial Assistance to Small Businesses

And, yes, yet another whitepaper (one more on CARES coming soon) - this one is from my colleague, John Zurich, on the COVID-19 Working Capital Access (CWCA) Program: Governor Wolf Announces Financial Assistance to Small Businesses.

New whitepaper: What to do if an employee has a confirmed case of COVID-19 infection?

Passing along another resource, from another colleague, Ethan Wilt: What to do if an employee has a confirmed case of COVID-19 infection?