No, the American Rescue Plan does not mandate paid leave. However, it allows for employers who voluntarily continue to provide paid leave under the existing FFCRA framework to be eligible for tax credits for leaves taken through September 30, 2021.
No, only leaves that would be covered under the FFCRA, or the additional reasons for leave identified in the American Rescue Plan would be eligible for tax credits. Reasons for leave under the existing FFCRA framework include:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine related to COVID-19;
- The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- The employee is caring for an individual subject to a quarantine or isolation order or has been advised to self-quarantine by a health care provider;
- The employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
- The employee is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
Additional reasons for leave that have been added by the American Rescue Plan include:
- Time needed to get a COVID-19 vaccine;
- Leave related to recovery from any injury, disability, illness or condition related to the vaccine;
- To seek or await the results of a COVID-19 test.
No. Under the American Rescue Plan, the decision to voluntarily provide paid leave under the FFCRA must apply to all employees, regardless of classification, in order for the paid leave to be eligible for tax credits.
Under the American Rescue Plan, starting April 1, 2021 all employees will be eligible for a new 10-day period for FFCRA leave. Thus, up to 10 days of paid leave will be eligible for tax credits for all employees after April 1, 2021, even if the employee already used some or all of their FFCRA leave (and the employer received tax credits) prior to April 1, 2021.
This does not mean that an employee who did not use any of their available FFCRA leave prior to April 1, 2021 will now have 20 days – the 10 days of available FFCRA leave from before April 1, 2021 does not roll over.
Just as before, any paid leave offered beyond what is allowed by the FFCRA or the American Rescue Plan will not be eligible for tax credits.
Employers should continue to follow CDC guidelines and best practices regarding workplace safety and quarantine. Employers who allow employees to take paid leave under the existing FFCRA framework, or under the additional reasons outlined in the American Rescue Plan, will be able to claim those payouts as a tax credit through September 30, 2021. Otherwise, employees may eligible for other forms of paid leave through state mandatory paid sick leave laws or other paid leave programs, company-provided benefits such as PTO, or unpaid, job-protected leave under the ADA or FMLA.
Employers may also want to consider working with their assigned Human Resources Consultant to implement an Infectious Disease Control Policy to help guide decision making in the absence of a Federally mandated paid leave program.
The protocols for claiming tax credits have not changed in light of the new stimulus bill. Clients should refer to Engage’s Employer Tax Credits (CARES Act and FFCRA) FAQ page, found here, for more information on how to claim and process tax credits.
No. Like the December 2020 Coronavirus stimulus bill, the extension of the tax credit provisions from the American Rescue Plan similarly requires that leave be paid out under the existing FFCRA framework, i.e. where employers provide paid leave as if the FFCRA had not expired. The FFCRA required employers to provide paid leave under its mandate in addition to any other paid leave benefits that employees may otherwise have available, such as PTO or state-mandated benefits. Under this theory, even if an employee takes leave for a reason that would have been covered by the FFCRA, if they are required to deplete their PTO bank it would not meet the same criteria as paid leave under the FFCRA.
In addition to providing free Coronavirus testing and funding for other public benefits, the Families First Coronavirus Response Act (FFCRA) also provides mandatory paid sick leave under two mechanisms: one is an expansion of existing leave laws under the Family Medical Leave Act (FMLA) framework, which includes a paid leave provision under its terms, and the other is an Emergency Paid Sick Leave (EPSL) program. Employers with fewer than 500 employees are covered under the FFCRA.
For details, see the Engage Client Alerts on the FFCRA and the Webinar that includes instructions for obtaining tax credits and other details.
As always, contact your HR Consultant if you have any questions.
Certain types of employees will be excepted from these entitlements. The first kind are health care workers. The regulations have gone into detail defining a health care worker as any employee working for “any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity.”
The definition also includes any individual employed by an entity that contracts with any of the above institutions to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility.
This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.
It’s important to note here that it doesn’t just exclude those working on the ground providing the care, but any employee. So this could include people working behind the scenes in back offices too. Similarly, first responders are also excepted. So frontline workers like EMTs, law enforcement, 911 dispatchers and operators, paramedics, military personnel, and other similar occupations will be excluded too.
For more information, please see the Department of Labor’s Questions and Answers #56 and #57.
Basic information, such as dates of leave, reasons for leave, rate of pay, etc. should be documented. Engage has prepared forms capturing this information that can be completed when an employee is requesting either EPSLA or EFMLA under the FFCRA. Depending on the reason for the leave, employees might be required to provide additional information such as their health care provider’s name, name of the school or childcare facility that has been interrupted due to COVID-19, and other related information.
The Department of Labor’s regulations do not require an employee to provide a doctor’s note or official medical documentation, but they also do not preclude the employer from asking for such documents. Rather, the regulations indicate that the employee should provide documentation of the name of the medical provider, name of the school that has been closed, name of the government entity that issued the isolation order, etc. This is due to the difficulty some employees may face in obtaining written doctor’s notes during the pandemic.
However, the IRS regulations allow employers to require employees to provide any other necessary documentation support the employer’s claim for FFCRA tax credits. Thus, if an employer legitimately questions the employee’s need for leave and is concerned that they may be paying for leave under the FFCRA when the employee is otherwise ineligible, they could require additional documentation (such as a doctor’s note). Nevertheless, employers should approach their need for leave verification with the flexibility, understanding that many employees may have difficulty procuring a doctor’s note during the pandemic. Employers should also make sure that they are not discriminating against employees by requiring doctor’s notes for some groups, but not others. Any differential treatment between required documentation for different employees must be based on non-discriminatory, legitimate business reasons.
When an Engage client has an employee who is requesting leave, Engage has prepared request forms that will make processing the leave go smoothly. These forms have separate employer and employee sections that must be filled out. The forms have been uploaded to the Engage Forms Library which is available on the Engage COVID-19 Client Information webpage and also available from the Manager Portal.
For Emergency Paid Sick Leave (EPSL), clients should send their completed forms to their Payroll Specialist. Emergency FMLA (EFLMA) forms should be sent to Engage’s FMLA team at FMLA@EngagePEO.com.
If there are any issues or special circumstances that prevent an employee from being able to provide the completed forms prior to running payroll for the pay period in which leave is taken, let your Account Manager and HR Consultant know and Engage will manage those situations on a case-by-case basis.
Engage has created a simple set of forms for Engage Clients to complete to process the tax credits for wages paid under the FFCRA.
When it comes time for you to claim your tax credits, the process you follow will depend on whether the amount of the credit you’re claiming is more or less than your federal tax liability.
If the amount of FFCRA credits you are claiming is less than your federal tax liability, all you need to do is send your completed Tax Credit Request Form to your Account Manager. This will be applied towards your overall tax liability and the reduced amount will be reflected in your Engage invoice.
If the amount of FFCRA credits you are claiming is more than your federal tax liability, you will need to first file the Form 7200 with the IRS who will process the credit and issue you a refund for the difference. Then you will need to complete the same Tax Credit Request Form for Engage and send those along with a copy of the Form 7200 you filed with the IRS to your Account Manager so that Engage can reconcile the tax credits with Engage’s 941 filing.
Yes. IRS guidance states that the minimum advance amount an employer can claim on an IRS Form 7200 is $25.00. Any IRS Form 7200 requesting less than $25.00 will not be processed.
The instructions to IRS Form 7200 state that the form may be signed by a corporation’s president, vice president, or other principal officer duly authorized to sign. With respect to partnerships (including LLCs treated as partnerships), a responsible and duly authorized partner, member or officer having knowledge of the entity’s affairs may sign. With respect to single-member LLCs treated as disregarded entities for federal income tax purposes, the owner or a duly authorized principal officer may sign. In addition, IRS Form 7200 may be signed by an organization’s duly authorized agent of the taxpayer if a valid power of attorney has been filed.
The Emergency Family and Medical Leave Expansion Act (EFMLEA) provides twelve (12) workweeks of leave in a 12-month period to eligible employees for COVID related reasons. On April 1, 2021, the list of reasons was expanded to include any listed under the Emergency Paid Sick Leave Act (EPSL):
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- the employee is subject to the advice of a health care provider to self-quarantine related to COVID-19;
- The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- The employee is caring for an individual subject to a federal, state, or local quarantine or isolation order or the advice of a health care provider;
- The employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19;
- The employee is experiencing any other substantially similar condition identified by the Secretary of Health and Human Services;
- The employee is obtaining a COVID-19 vaccination;
- The employee is recovering from an injury, disability, illness or condition related to a COVID-19 vaccination; or
- The employee is seeking or awaiting the results of a COVID-19 test or diagnosis because either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis.
Employers may voluntarily to provide the EFMLEA to employees until September 30, 2021. Employees taking leave are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period). Employers will receive a payroll tax credit for the leave wages paid during the EFMLEA leave.
To be eligible for leave under the EFMLEA, the employee must have worked for the employer for at least 30 days. There is no minimum hour requirement. Certain healthcare providers are exempt from the expanded coverage.
The Emergency Paid Sick Leave Act (EPSLA) allows an eligible employee to take up to two (2) weeks of paid sick leave for the following reasons:
- subject to a federal, state or local quarantine or isolation order related to COVID-19;
- advised by a health care provider to self-quarantine due to COVID-19 concerns;
- experiencing COVID-19 symptoms and seeking medical diagnosis;
- caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
- caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
- experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Unlike the EFMLEA, all full-time employees, regardless of their tenure with the employer prior to the leave, will be eligible for EPSL. EPSL must be paid at the employee’s regular rate of pay if leave is taken for reasons 1, 2, or 3 listed above. EPSL must be paid at two-thirds of the employee’s rate of pay if leave is taken for reasons 4, 5, or 6 above. EPSL employer tax reimbursements will be limited to $511.00 per day, up to $5,110.00 total per employee for their own use and up to $200.00 per day, $2,000.00 total to care for others and “any other substantially similar condition” as defined by the law. If an employer chooses to be more generous, the difference will not be eligible for reimbursement.
The EPSLA mandates that the two (2) weeks of sick leave be provided in addition to any sick leave already granted, including sick leave granted by a state mandate (unless the state has said otherwise). For example, five (5) sick days are already required to be provided by employers by the State of New Jersey. Therefore, for absences related to the current public health crisis, employees will have at least fifteen (15) paid sick days in New Jersey. Similarly, if a company’s policy or jurisdiction allows for paid time off , then the EPSL is in addition to that. Some jurisdictions, like NY, have explicitly stated that their time off is in excess of the FFCRA time off. In addition, see our state summary of COVID sick time rules for more information.
The Department of Labor (DOL) has released the required FFCRA poster covered employers must post in a conspicuous place on their premises explaining employee rights and employer obligations under the act. Covered employers include employers with fewer than 500 employees. Employers should ensure that any new hires or employees returning from leave also receive the notice.
If a covered employer has implemented telework policies in light of COVID-19 recommendations, they may satisfy the FFCRA notice requirement by emailing or direct mailing this notice to employees or posting this notice on an employee information internal or external website.
The Department of Labor poster can be accessed here: FFCRA NOTICE.
There is no application or approval process to claim the Small Business Exemption. If an employer believes it meets the criteria and decides to claim the exemption, the employer should document its reasoning, gather any supporting documentation such as financial records, records of expenses, and maintain such documentation. If the Department of Labor ever comes knocking for an audit, or if employees file complaints claiming they were wrongfully denied EPSL or EMFLA leave, you will be able to produce that documentation to support your claim for the exemption. Engage has created a checklist that can assist in this recordkeeping. It will be posted shortly in the Engage Forms Library Contact your HR Consultant if you have questions.
See also the FFCRA Q&A from the DOL: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions (Also found on this page below in the More Information section).
Yes, but the Small Business Exemption can only apply to EPSL if it is taken for an employee to care for a child whose school or childcare has been interrupted due to COVID-19. The Small Business Exemption applies to EFMLA which is available to care for a child whose school or childcare has been interrupted due to COVID-19.
See also the FFCRA Q&A from the DOL: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions (Also found on this page in the Additional Information section).
The Small Business Exemption is only available in certain situations. (As outlined in the FFCRA Client Alert and Webinar).
You may qualify for the Small Business Exemption if you have fewer than 50 employees at the time leave is requested, and your situation meets one of these three criteria:
- Such leave would cause the employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity;
- The absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the employer because of their specialized skills, knowledge of the business, or responsibilities; or
- The employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the employer to operate at a minimal capacity.
On August 3, 2020, a federal court in New York struck down certain key provisions of the Department of Labor’s (DOL’s) Final Rule containing implementation guidance for the FFCRA in a lawsuit brought by the State of New York. This suit challenged the DOL’s interpretation of how certain provisions would be implemented, impacting entitlement to benefits under the Emergency Paid Sick Leave Act (EPSL) and Emergency Family Medical Leave Act (EFMLA) for a number of employees.
If you are an employer in New York, the following changes will apply to you. If you are an employer outside of New York, these changes will not apply to you absent further action from the DOL or your state. Engage will update this information as necessary when new information becomes available.
What Provisions are at Issue?
Availability of Work
Old Rule: If the employer does not have work available for the employee, they will not be entitled to leave. For example, if the employer had to close its doors and/or reduce staff, resulting in furloughed employees, those employees would not be entitled to paid leave under the FFCRA.
New Rule - The federal court’s decision overturned this provision, therefore opening the door to furloughed employees being able to take paid leave for qualifying reasons under the FFCRA.
Healthcare Provider Exclusion
Old Rule: The healthcare provider exclusion for paid leave under the FFCRA provides that any employee employed in a myriad of healthcare-related businesses would be not be entitled to paid leave.
New Rule: The definition of “health care provider” was deemed overly-broad, suggesting that those employees who are not directly involved in providing care should not be excluded, such as those working in the cafeteria of a health care facility, or a librarian at a medical school. The federal court’s decision, therefore, “requires at least a minimally role-specific determination.”
Employer Consent for Intermittent Leave
Old Rule: Intermittent leave can only be taken if two primary criteria are met: 1) if there is no risk of spreading the virus by taking intermittent leave (such as when leave is taken to care for a child whose school or childcare has been closed due to COVID-19, or where the employee is able to work remotely if leave is taken because of exposure to or diagnosis of COVID-19); and 2) if both the employer and employee agree.
New Rule: The second prong requiring employer to consent to intermittent leave has been eliminated. The first prong remains unchanged.
Documentation as a Pre-Condition to Leave
Old Rule: An employee must furnish the employer with documentation containing information such as the reason for and duration of the leave prior to taking the leave.
New Rule: An employer cannot require this type of documentation prior to taking leave for FFFCRA purposes (it is possible state laws running concurrently will still require documentation for those benefits to run at the same time). However, the overall provision that documentation is required to support an employee’s request for leave remains the same.
The Department of Labor (DOL) has clarified that where a school has decided to reopen for in person classes, but the parent chooses to have the child remain in the home, the parent will not be entitled to leave under the FFCRA.
Additional FAQs issued by the DOL address specific questions regarding the different ways many schools are implementing reopening procedures, and how those options will impact an employee’s entitlement to leave under the FFCRA. This and other information can be accessed on the DOL’s FAQ page, found here.
Yes, an employee is eligible to take paid leave under the FFCRA if the employee’s child school issuing the hybrid model. On the remote learning days, the school would be considered to be “closed” and the employee can utilize the paid FFCRA leave on the remote learning days.
The employee is eligible for paid leave under the FFCRA as long as the school is operating remotely. During remote learning, the school is considered to be closed. However, when the school opens or provides the option for in-person instruction, the school is no longer considered to be “closed” and the employee is no longer eligible for paid leave under the FFCRA.
A qualified employee is entitled to up to 12 weeks of emergency family and medical leave under the FCRA. The weeks that the employee took before would be subtracted from the total available now. If there has been a break between requests, you can ask the employee for new documentation verifying the need for paid FFCRA leave.
Source: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions#98