The Families First Coronavirus Response Act (“FFCRA”), which became effective on April 1st, requires employers with fewer than 500 employees to provide qualified employees with Emergency Paid Sick Leave and leave under the Family and Medical Leave Act for certain COVID-19 related events. It also allows employers to take a tax credit for providing the required paid time off. Both the Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”) have identified documentation that an employer needs to obtain from the employee to substantiate the need for covered leave as well as to obtain the immediate dollar-for-dollar tax offset against payroll taxes and/or a quick refund for overpayment. This blog addresses employer documentation, but if you’d like to learn more about the FFCRA’s specific requirements, you can read our other blogs and visit our COVID-19 Resources page.
Insufficient Documentation from Employees Means No Tax Credit for Employers
Some organizations have (generously) been paying their employees’ full wages since prior to the time the FFCRA went into effect when the employee had not been able to work as the result of a COVID-19 related reason. The DOL has made it clear that employers will not receive a tax credit when paying employees in excess of the FFCRA limits. Other employers who have been paying employees consistent with the FFCRA’s limits may still be out of luck if they have not obtained the required documentation from employees to substantiate the right to the tax credit. Shortly after the FFCRA was enacted, the DOL issued (and revised multiple times) a Q&A and regulations that are intended to assist employers with interpreting the Act’s provisions regarding an employer’s right and requirement to obtain documentation from employees seeking leave. The IRS has weighed in on that issue as well.
Employee Request for Paid Leave
In order to take FFCRA leave, an employee must provide:
- The employee’s name;
- The date or dates for which leave is requested;
- A statement of the COVID-19 related reason for which the employee is requesting leave and written support for such reason; and
- A statement that the employee is unable to work, including by means of telework, for such reason.
Leave related to a Quarantine
When leave is related to a quarantine, the statement must also 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.
It appears that at this time, an employer may not require an employee to provide a note from a healthcare provider substantiating the need for leave.
Child’s School or Child Care is Closed
Alternatively, when leave is requested because the employee needs to care for a child (or children) because school or daycare is closed or a childcare provider is unavailable for COVID-19 related issues the statement must 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;
- 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.
When it comes to time off for the school/childcare-based reasons, the IRS has made it clear that the employee alone must be providing care to the child. Qualified leave is unavailable if both parents or another individual is present to care for the child. Also, in the case of a child over 14, the employee must identify “special circumstances” requiring the employee to provide care.
Even if you have all the required documentation, keep in mind that if you are paying an employee more than the amounts afforded under FFCRA, the remainder of the payment is not eligible for a tax credit. (In addition to the information identified in this blog, the IRS requires an employer to retain other information. The specifics of those requirements are beyond the scope of this employment blog, so we recommend you contact your tax preparer or accountant for more information.)
But What About Paid Time Off, Vacation, Employer Sick Time, etc.?
We strongly recommend that employers develop adequate and uniform request forms for employees to fill out in order to be eligible for qualified leave. However, for other reasons, it may not be enough that an employer’s request form includes only the basic requirements set forth above.
For example, how will your organization handle the supplementation of federally-mandated payments? Since in many cases the paid time will not equate the employee’s full wages, an employee may want to use paid time off to supplement the difference. The DOL FFCRA regulations make it clear that in most cases, an employer and employee must agree that time available to an employee under an employer’s policies may be used to supplement the difference between the leave benefit and the employee’s regular wages. However, the employee alone can choose (without the employer’s agreement) to use paid time off during the first two weeks of the expanded FMLA leave, which is otherwise unpaid. Additionally, when it comes to time off under the emergency provisions of the FMLA, an employer may require an employee, as it could under the “regular” FMLA, to use paid time off for all or part of the leave that would otherwise not be fully compensated. Have you considered what you would allow your employees to do? We recommend that you include on your request forms information about substituting paid leave and/or giving the employee a place to indicate whether or not the employee would like to use any paid time off available during the qualified leave.
Policies, Request Forms, and Employee Communication
Employers need to give thought now as to what they want to include in their request forms or on supplemental forms to be provided to an employee. It’s not a “one-size-fits-all.” On your form, should you let employees know that any time taken under the standard FMLA provisions limits the amount of time an employee can take under COVID-19 related FMLA leave? What call-out or check-in procedure will employees need to follow? Should employees be reminded about their (potential) ability to take MA Earned Sick Time?
If you’re a healthcare provider, do you want to opt out of the FFCRA time off requirements (in whole or in part)? If so, how and when will you communicate this information to employees?
Before you can prepare a request form, you need to give serious consideration about the information you want to provide to the employee in connection with the request. Will employees who are diagnosed with COVID-19 be required to provide a list of employees with whom they worked in close quarters prior to the diagnosis? There are many questions to be considered and answered before you can disseminate information to employees. We recommend that your first step be to develop a COVID-19 leave policy and a means by which you want to communicate your policy to your employees. Stressful and concerning events trigger employees’ need for qualified leave. Providing employees with a “heads up” as to what to expect when they need to apply for leave is likely to reduce any additional stress that could result from not knowing what to do to take leave.
For guidance on developing FFCRA policies, required and optional documentation, please contact any of our attorneys or call us at (413) 737-4753.