26 March 2020 U.S. Department of Labor publishes FAQs for compliance with the COVID-19 paid-leave requirements under the Families First Coronavirus Response Act As previously reported (EY Payroll Newsflash, Vol. 21, 077, March 19, 2020), the Families First Coronavirus Response Act (H.R. 6201, "FFCRA" or "the Act") provides certain tax relief for employers and employees as a result of the COVID-19 pandemic. The new law requires private sector employers with fewer than 500 workers (small employers) and government entities to provide: (1) paid sick leave (two weeks for full-time employees and average hours over a two-week period for part-time employees) necessary to respond to COVID-19 issues; and (2) as many as 12 weeks of job-protected leave to employees to care for a child whose school or place of care is closed. Employers will receive a refundable payroll tax credit for these additional required wages being paid to impacted employees. To address the many questions concerning precise compliance with the COVID-19 paid-leave requirements, the U.S. Department of Labor (DOL) has published 14 frequently asked questions (FAQs) that deal with: how the 500-employee threshold is determined; covered employers generally; the circumstances under which employees are covered; computing the regular rate of pay for paid-leave purposes; and the interaction between paid sick leave or expanded family and medical leave. The DOL confirmed that the FFCRA's paid-leave provisions are effective April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. The FAQs address the numerous questions regarding which employers are covered by these paid-leave requirements, including:
An employer has fewer than 500 employees if, at the time its employees' leave is to be taken, it employs 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, the employer should include employees on leave; temporary employees who are jointly employed by the employer and another employer (regardless of whether the jointly-employed employees are maintained on only the employer's or another employer's payroll); and 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. Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act. In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act. Private sector employers are only required to comply with the Acts if they have fewer than 500 employees. (Federal employees are eligible to take paid sick leave under the Emergency Paid Sick Leave Act. But only some federal employees are eligible to take expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act. Eligibility depends on whether the employee is covered under Title I or Title II of the Family Medical Leave Act.) Compliance with the FFCRA can be complex for large employers with numerous subsidiaries and global employers because of the need to determine if the 500-employee threshold is reached. Additionally, multistate employers will face challenges in coordinating the requirements of the FFCRA with state-mandated COVID-19 sick leave (e.g., Colorado and New York.) For these reasons it is important that employers reach out to their wage-hour advisors to address specific compliance questions they may have.
Document ID: 2020-0718 | |||||||||
