Compliance Update with Amy K: FFCRA
by Amy Kleinschmit
Chief Compliance Officer
3/27/2020

Families First Coronavirus Response Act (FFCRA)

The Department of Labor (DOL) has recently issued a number of guidance resources for employers and employees relating to the enacted Families First Coronavirus Response Act (FFCRA) that can be found here. The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. Remember FFCRA is in addition to Fair Labor Standards Act (FLSA), and Family and Medical Leave Act (FMLA), both of which have additional COVID-19 related FAQs provided at the above link.

We are still waiting for guidance from the IRS for employers regarding prompt payment for the cost providing this leave. IRS has indicated that guidance would be issued soon to address how eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able to file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced soon.

Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern. However, as of writing this article, the DOL is still working on issuing regulations, which will include the criteria that must be met to exercise this narrow exemption. As explained by the DOL, “to elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.

The FAQs address a variety of other topics such as:

  • How do I count hours worked by a part-time employee for purposes of paid sick leave or expanded family and medical leave?
  • When calculating pay due to employees, must overtime hours be included?
  • If I am home with my child because his or her school or place of care is closed, or child care provider is unavailable, do I get paid sick leave, expanded family and medical leave, or both—how do they interact?
  • Is all leave under the FMLA now paid leave?

The required posters are ready and include FAQs to assist with answering logistic questions credit unions may have as to how and where to deliver the poster to employees. Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website. All employers covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA (i.e., certain public sector employers and private sector employers with fewer than 500 employees) are required to post this notice. These posters are FREE and copies can be obtained from DOL, link is found in the FAQs.

Needless to say, there is still a lot of information we are waiting on from the various agencies to make sense of these new requirements – so stay tuned!

INVITATION TO SHARE THOUGHTS ON FFCRA

In the meantime, DOL is hosting a national online dialogue to provide an opportunity for employers and workers to play a key role in shaping the development of the DOL's compliance assistance materials and outreach strategies related to the implementation of FFCRA.

The public, including employers, workers and their advocacy groups can participate in this national online dialogue through Sunday, March 29, 2020.

The department's Office of Compliance Initiatives (OCI), in partnership with the Wage and Hour Division (WHD) and the Office of Disability Employment Policy (ODEP), will host the online dialogue. ODEP's ePolicyWorks will facilitate the dialogue initiative. Please register to participate.

 

 

 

<< Go to Memo List