The Families First Coronavirus Relief Act (“FFCRA”) was enacted to enable employers to keep employees on the payroll, while also ensuring that workers are not forced to make the choice between going to work to earn a paycheck or the treatment, quarantine, or other measures needed to combat the virus. A few weeks ago, we wrote about how the new FFCRA could affect businesses. Although some of the details are still not entirely clear, employers now have a better understanding of what is required of them thanks to the Department of Labor’s (“DOL”) release of its regulations to accompany the statute.
Effective April 1 through December 31, 2020, the Act provides protected leave for employees and “reimbursement” for employers through refundable tax credits—although such payments are capped at certain amounts. For a more thorough discussion of the caps, please refer to the previous article NSSH wrote on the FFCRA. The Act allows for two weeks, up to 80 hours, of paid leave for full-time employees, as well as an additional 12 weeks of expanded FMLA leave, 10 of which would be paid at 2/3 the full-time employee’s salary. In order to be eligible for such leave, an employee must fit into one of the six qualifying leave reasons.
Clarifications of the Six Qualifying Reasons to Take Leave:
The six qualifying leave reasons which enable an employee to make use of the leave provisions have been clarified by the recently released regulations. To make use of these reasons, the employee must be unable to work or telework, which is an important additional qualifier. If the employee is capable of working from home and not otherwise prohibited by one of the six reasons, he or she is not eligible for leave under FFCRA.
- The first qualifying reason occurs when an employee “is subject to a Federal, State, or Local quarantine or isolation order related to Covid-19.” This has been clarified to include stay-at-home and shelter-in-place orders. This reason has also been explained to be available only when the employer still has work for the employee to do, which cannot be done because the employee is at home—not because the employer does not have work for the employee to do. The DOL provided the example of a cashier whose coffee shop is closed. The employee is prevented from working not because he or she is required to stay home, but because the coffee shop is closed and there is no work to be done. Therefore, in that case, the employee would not have a qualifying reason and thus not be eligible for FFCRA leave.
- The second qualifying reason occurs when an employee “has been advised by a health care provider to self-quarantine due to concerns related to Covid-19.” This reason is available if the individual has been advised to stay home because he or she has the virus, is suspected of having the virus, or is particularly vulnerable/susceptible to the virus. If this self-quarantine causes the employee not to be able to work, it is a qualifying reason. Another important consideration of this qualifying reason is that the definition of a health care provider is expansive and the regulation seeks to have it interpreted liberally. It includes physicians, nurse practitioners, or other health care providers authorized to issue FMLA certifications of serious health conditions.
- The third reason occurs when an employee “is experiencing symptoms of Covid-19 and seeking a medical diagnosis.” To be seeking a medical diagnosis the employee must have taken an affirmative step toward diagnosis, such as making, awaiting, or attending an appointment to obtain a diagnosis. In keeping with the overall requirement, if an employee can work from home during this time and is not prevented from doing so by the symptoms, this reason will not apply. Furthermore, the diagnosis must be sought in response to Covid-19 symptoms as enumerated by the CDC, not symptoms defined by another source.
- The rest of the reasons are not related to the employee’s own person, but to the individuals in his or her life for whom he or she is a caregiver. The fourth reason occurs when the employee “is caring for an individual” who is staying home because of the first or second reason. The most important clarification for this reason is the definition of individual. The individual being cared for by the employee must have a close personal relationship with the employee. The individual must be the employee’s “immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined.”
- The fifth reason occurs when an employee is caring for his or her child under the age of 18 “if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to Covid-19 precautions.” This regulation defines school or place of care broadly, including preschools, day care facilities, respite programs, summer camps, and other summer programs. It also defines child care provider expansively, including nannies and babysitters who receive money for their services. This reason is limited, however, by language stating that if the employee is still able to telework and his or her childcare duties are not prohibitive, then he or she is not able to use this reason. Similarly, if there is a co-parent, guardian, or suitable person available to provide the childcare or if the child’s regular child care provider is still open, this reason is not available to the employee.
- The last reason occurs when the employee “is experiencing any other substantially similar condition” identified by the Secretary of Health and Human Services. So far, this reason has not yet been clarified.
Clarification of How the FFCRA Leave Works with Leave the Employer Already Has Established
It is important to note that the employer cannot require the employee to use the employer’s other previously established leave prior to using the leave outlined in the FFCRA. If the employee has a qualifying reason and wants to use either the emergency sick leave or the expanded FMLA leave delineated in the FFCRA prior to other leave he or she has with the employer, then the employer must allow that.
Clarification as to How Employers Should Document this Leave
The regulation also details what information needs to be documented in order for the employer to later take advantage of the tax credits. The employee, in order to take the leave, must provide his or her name, the dates of leave requested, the reason for leave including enough details to substantiate that the reason is for one of the six qualifying reasons, and an oral or a written statement that the reason provided prevents the employee from working or teleworking.
The employer must then make sure he or she has collected enough specifics to later substantiate the tax credits. These specifics include such things as who the employee is caring for if the employee himself or herself is not ill; the name of the health care provider who imposed the self-quarantine if applicable; the government entity that issued the stay-at-home or other quarantine order; and the name of the school age child along with the school that is closed or the child care provider that is closed and a statement that no other suitable person is available to care for the child. If the child is older than 14 years of age, a specific reason must be provided why the child requires parental care such that the employee cannot work.
The employer must also keep records detailing the wages he or she is providing so that the IRS can be sure the employer is observing the appropriate rates and limits. The employer must have records showing how the payments were calculated including hours of leave and hours of telework/work done and any payments for qualified health plan expenses allocated to wages. All records must be retained for four years.
Clarification of the Small Business Exception to the FFCRA Leave
If any employer has fewer than 50 employees and providing the leave required would jeopardize the viability of the business as a going concern, the employer may be able to deny the leave provided under the FFCRA. This exception is available because the DOL wants to prevent future job loss—if an employer is required to provide such leave, but it would go out of business in the process, then the job is eventually lost entirely and the employee permanently out of work. The DOL recognizes this, and the exception is written in contemplation of that potential situation. If the employer believes it is justified in denying leave because the leave would cause the business to go under, the denial and the reasons therefore should be carefully documented and retained in case a dispute arises at a later date.
An employer may deny leave to an employee whose reason for the leave is to care for a child when (1) such leave would cause the employer’s expenses to exceed its revenue; (2) the employee’s absence would pose a substantial risk to the employer’s financial health or operational capacity because of the employee’s specialized skills, knowledge of the business, or responsibilities; or (3) the employer cannot find enough other workers who are able, willing, and qualified to perform in the employee’s stead and this labor is necessary for the employer to operate at a minimal capacity.
The DOL is carefully attempting to strike a balance between the employee’s need to receive a paycheck through the hardships imposed by Covid-19 and be free to seek treatment and follow mitigation strategies, and the employer’s need to be able to weather the storm without going out of business. In order to avoid potential legal disputes, employers should stick close to the spirit of the law, which is to aid employees who must miss work because of Covid-19 so long as the employer is able to do so, thus allowing both parties to emerge from the crisis intact.
 Check out the IRS guidance for more information on this matter: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs