As previously reported here, on March 18, President Trump signed the Families First Coronavirus Recovery Act (FFCRA) [HR 6201], which was the second in a series of three Congressional Acts to provide relief to the economic and business collapses caused by the COVID-19 (coronavirus) pandemic. As part of that order, Congress directed the U.S. Secretary of Labor to issue guidelines for employers to follow on the administration of the Emergency Paid Sick Leave and Emergency Family and Medical Leave provisions of the bill.
On March 25, the Department of Labor published the following links with information to help clarify some of the ambiguities in the law:
https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave
https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave#_ftn7
https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
The USDOL also released the MANDATORY poster which every employer with fewer than 500 employees is required to post on or before April 1, 2020. The poster can be found here: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
Unfortunately, as part of these guidelines, the Department left many critical questions unanswered, and created inconsistencies that previously were not considered. Among them:
- The provisions of the FFCRA now become effective on April 1, 2020, not April 2, as originally reported and understood based upon the specific language of the bill;
- Employers are not entitled to any “credit” or benefit if they extended paid leave to employees prior to April 1. If an employee was sick or quarantined prior to the effective date of the bill, and the employer extended beyond its normally provided leave plans (e.g. paid sick, vacation and/or PTO), there is no method to capture a tax credit, or “offset” against new benefits that accrue on April 1; and,
- Smaller employers (<50 employees) must still await clarification to determine whether they qualify as “exempt” from the provisions of the FFCRA based upon economic hardship. The USDOL “anticipates” issuing regulations on this issue in early April.
Absent from the clarifications provided by the USDOL was any guidance on how employers are to qualify, document or receive tax credits for the sums advanced to their employees through the FFCRA. Rather, the Department provided the less-than-helpful explanation:
Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. For more information, please see the Department of the Treasury’s website.
As of the date of this publication, the Treasury website has no such information! So, while we have some new useful information, there remain many questions about how to implement and administer the paid sick leave and emergency family leave requirements which are mandatory beginning on April 1. This is yet another example why it is important to have competent legal counsel look at any plan for leave prior to rolling out to your employees. In the meantime, please make sure to hang the mandatory poster linked above before April 1, in a conspicuous place where all employees can see it.