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Q. When does this go into effect?
A. 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.
Q. If I am a small business with fewer than 50 employees, am I exempt from the requirements to provide paid sick leave or expanded family and medical leave?
A. A small business is exempt if providing an employee such leave would jeopardize the viability of the business as a going concern only if:
- Employer employs fewer than 50 employees
- Leave is requested because the child’s school or place of care is closed, childcare provider is unavailable due to COVID-19
- An authorized officer of the business has determined that at least one of these three conditions is satisfied (Small Business Exemption)
- The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
Q. How do I take advantage of the small business exemption?
A. You should document why your business with fewer than 50 employers meets the criteria - more detail coming in future regulations. DO NOT send materials to the DOL.
Q. How do I count hours worked by a part-time employee?
A. You calculate hours of leave based on the number of hours the employee is normally scheduled to work. If unknown, or hours vary, use a six-month average to calculate daily hours. If the employee hasn’t been there for six-months, use the number of hours agreed to when hired.
Q. Would an employee who is afraid of coming to work and contracting COVID-19 be eligible for paid sick leave?
A. No, an employee's concern for contracting the virus is not included within the six allowable reasons for leave although they may use leave under other employer policies.
Q. Are married spouses working for the same employer entitled to 12 weeks each of FMLA leave for child care or must they split the 12 weeks?
A. The FFCRA is silent on this matter. More guidance is needed and employers should consult with legal counsel before requiring parents to share leave.
Q. How do I claim the refundable tax credits for qualified leave wages?
A. Eligible employers will report their total qualified leave wages and related credits for each quarter on their federal employment returns, usually Form 941.
For example, if an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, the employer would only be required under the law to deposit $3,000 on its next regular deposit date. If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Q. What if I don’t have sufficient funds to cover these payments in advance of the credit?
A. Yes. The employer should first reduce its required deposits of federal employment taxes due in anticipation of the credit. The employer can file a request for an advance credit by completing Form 7200.
Q. How should I document a worker that has a qualifying reason for emergency paid sick leave under the FFRCA? And what documentation will I need to provide the IRS when processing payroll tax deductions?
A. 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:
- The employee’s name;
- The date or dates for which leave is requested;
- A statement of the COVID-19 related reason 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.
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.
An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if, in addition to the information above, the employer creates and maintains records that include the following information:
- Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages. The amount of qualified health plan expenses taken into account in determining the credits generally includes both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee with pre-tax salary reduction contributions. However, the qualified health plan expenses should not include amounts that the employee paid for with after-tax contributions.
- Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
- Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, 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 Form 941).
An Eligible Employer should keep all records of employment taxes for at least 4 years after the date the tax becomes due or is paid, whichever comes later. These should be available for IRS review.