How to Handle Paid Leave Under the Families First Coronavirus Response Act (FFCRA)
April 1, 2020
While Nest Payroll cannot provide legal or accounting advice, we are pointing you to resources and information about the FFCRA so you can make the best decision for yourself and your employee’s situation.
you may need to notify us:
If your employee qualifies to take paid leave, your payroll will need to be handled differently. Notify us as soon as possible so we can do this for you.
Summary
Starting April 1, 2020, employers are required to provide employees with paid sick leave and expanded family and medical leave under qualifying circumstances (see below) related to COVID-19. Employers would receive a 100% reimbursement for paid leave through payroll tax credits to offset the paid leave wages.
Employers should read the specifics here:
Steps to take:
(1) Provide your employee(s) with the following brochure as soon as possible (you’re required to do this, and you can email it or text it):
(2) Understand Qualifying Reasons for Leave:
Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
has been advised by a health care provider to self-quarantine related to COVID-19;
is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
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
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.
Under the FFCRA, an employee qualifies for expanded family leave if 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.
(3) Have a conversation with your employee. If your employee qualifies and you intend to claim a tax credit for payment of sick leave or FMLA leave, you must obtain the following specific documentation from them:
Employees should provide written notice of the need for leave. Notice must include: the employee’s name; qualifying reason for leave; statement that the employee is unable to work, including telework, for that reason; and the date(s) for which leave is requested.
In addition, employees must provide documentation to substantiate the need for leave and the qualifying reason. For EPSL (sick leave), documentation will depend on the reason for leave, but may be the health official’s quarantine/isolation order for the employee; or written documentation from the employee’s health care provider advising self-quarantine. For FMLA-Public Health Emergency Leave, documentation may consist of a notice published by the government, school or daycare of the closure, on a website or in the newspaper, or an email from the school or place of care. In addition, the usual FMLA medical certification requirements continue to apply for reasons such as the employee’s own serious health condition or caring for a family member with a serious health condition.
(4) If your employee qualifies and you wish to seek temporary payroll relief under FFCRA, it is important that you let us know as soon as possible through “Support” in your Nest Payroll app or email us at hello@nestpayroll.com so that we continue to report your quarterly payroll taxes, but suspend your payroll tax payments as they count as part of your refund under FFCRA.
(5) If the payroll taxes alone do not cover the cost of wages you pay, you will be able to file a request for an accelerated payment from the IRS. See U.S. Department of Labor Statement. Note that any payments you may have made to employees prior to April 1 are not covered under this Act.
Shelter In Place Clarification
Unfortunately, if you are mandated to “shelter in place”, this is NOT the same as qualifying reason (#1) for “quarantine or isolation order”. It appears that the only qualifying option under FFCRA for a shelter in place situation is potentially under qualifying reason #5 if there is an applicable school closure. If your employee does not have a child at home due to a school closure, and you are unable to pay your employee, then filing for unemployment may be the best option for your employee.
If your household employee's child's school is closed due to COVID-19, however, then starting April 1st you could continue paying your employee 2/3 wages, and qualify to get a 100% reimbursement back:
Up to 12 weeks of paid sick leave and expanded family and medical leave paid at 2/3 for qualifying reason #5 for up to $200 daily and $12,000 total.
If you qualify for this option, you must communicate this to us through the app under “Support” or email us at hello@nestpayroll.com. Under this scenario, you would enter ⅔ of normal hours.
Details of Employee Paid Leave Rights under FFCRA
Provides up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of paid sick leave based on the higher of their regular rate of pay, or the applicable state or Federal minimum wage, paid at:
100% for qualifying reasons #1-3 (see 2 above), up to $511 daily and $5,110 total
2/3 for qualifying reasons #4 and #6 (see 2 above), up to $200 daily and $2,000 total
Up to 10 weeks more of paid sick leave and expanded family and medical leave paid at 2/3 for qualifying reason #5 (see 2 above), up to $200 daily and $12,000 total
A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
Employees who have been employed for at least 30 days prior to their leave request may be eligible for up to an additional 10 weeks of partially paid expanded family and medical leave for qualifying reason #5 (see 2 above).
If your employee’s hours fluctuate or your employee is part-time:
Determine their hours over a two-week period based on the normal number of hours the employee is scheduled to work. If unknown, or a part-time employee’s hours vary week to week, an employer should use a six-month average to determine the daily hours, which yields the number of hours per day the employee can use for the two-week period. The same number of daily hours would be used for the employee’s FMLA-Public Health Emergency Leave entitlement. This approach also is used to determine a full-time employee’s entitlement when the employee works a variable schedule.
Essential Sectors
Do you work in an essential sector and need your nanny or caregiver to still come? Please consult your state’s definition of essential sectors:
Addtional Resources:
DISCLAIMER: The material provided herein is for informational purposes only, and should not be construed as legal or tax advice on any matter.