Update: The Families First Coronavirus Response Act H.R. 6201

Posted by MRPR on Mar 26, 2020 5:19:32 PM

FMLA UpdateWe have gathered the updates you need to know released by the Department of Labor (DOL), Internal Revenue Service (IRS) and U.S. Department Of The Treasury regarding the Families First Coronavirus Response Act (FFCRA).

We kindly ask that you take a moment to familiarize yourself with these updates and reach out to MRPR if we may be of further assistance.

Families First Coronavirus Response Act (FFCRA) Updates

Effective Date for Required Sick Leave and Amended Family and Medical Leave Act:

The Act will take effective on April 1, 2020; as clarified by the DOL (previously set for April 2, 2020).

DOL Poster: Download the updated DOL Poster which is required to be displayed in a visible location (physical and electronic) alongside your other employee notices & labor posters.

Determining Employee Count:

You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States.

In making this determination, you should include:

  • Employees on leave
  • Temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll)
  • Day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship).

Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold.

Calculating Leave For Overtime & Hours Paid:

  • No premiums rates shall be factored into the calculation when determining hours paid.
  • Under the Required Sick Leave Act, should an employee’s normally scheduled work week be 50 hours, the employee would receive 50 hours of the allotted 80 hours in the first week and the second week would receive no more than 30 hours (capped at the appropriate daily/aggregate amounts).
  • Under the Amended Family and Medical Leave Act should an employee’s normally scheduled work week be 50 hours and is receiving overtime for the excess hours, the employee will only receive 2/3 of the 50 hours at their regular rate of pay (capped at the appropriate daily/aggregate amounts).
  • If you are paid with commissions, tips, or piece rates, these wages will be incorporated into the calculation.

Reimbursements to Employer:

The bill stipulates that employers receive 100% reimbursement for paid leave pursuant to the Act who are providing the paid FMLA (Child Care Leave Credit) and/or Required Paid Sick Leave (Paid Sick Leave Credit) including Health Insurance Premiums paid by the employer while employee is on FMLA and/or Required Paid Sick Leave under IR-2020-57.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week. Self-employed individuals will be eligible to file for equivalent credit.

The details and documentation are still to be finalized. Be sure to consult with your CPA and payroll provider to seek guidance for proper handling of these reimbursements.

Documentation Requirements:

  • For Employee reporting to Employer, at this time, there are no set requirements in regards to documentation or certification under the FFCRA. Employees should follow their existing Employer policies for requesting leave, until further details are released.
  • For Exemptions, you should not send any materials at this time to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave. For the Ease of Compliance currently, the requirements are subject to 30-day non-enforcement period for good faith compliance efforts. 
  • Criteria set forth by DOL will be addressed in more detail in forthcoming regulations.

Qualifying Reasons for Leave:

Further discussion is still taking place on the Executive Order qualifying as quarantine or isolation order to COVID-19 by the DOL. The DOL may provide some guidance in the next week regarding how the executive order and the FFCRA effect each other. If guidance is not provided, please contact your legal counsel as to how your business should interpret the act.

DOL Resources:

We understand that in these times there can be information overload, especially when the world is changing around us on a seemingly daily basis. MRPR stands ready to help you through this.

If you missed the first article of the FFCRA series, you can catch up here.

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Topics: Tax Topics, COVID-19 Updates