Key Takeaways from the DOL Q&A regarding the Families First Coronavirus Response Act

As previously communicated, the Emergency Paid Sick and Family Medical leave was expanded when the Families First Coronavirus Response Act was passed on Wednesday, March 18, 2020.

To understand a summarization of these changes, click here. At this point in time, it’s important to note that there is no Federal, State, or local quarantine or isolation order related to COVID-19. Such an order would need to be based on official government-issued documentation, including documentation from the Center for Disease Control and Prevention, New York State or the county department of health.

The US Department of Labor (DOL) issued questions and answers yesterday regarding the Families First Coronavirus Response Act. Some of the significant takeaways include:

• The Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. The paid sick leave and expanded family and medical leave requirements are not retroactive.
• Private-sector employers are only required to comply with the Acts if they have fewer than 500 employees.
• It is important to note that the employee count when determining whether a business is under the 500-employee threshold is tied back to employment law, and not the tax code. Please contact a labor attorney if you need additional assistance. However, the DOL did clarify the following when determining the 500-employee threshold:
  • Include employees on leave; temporary employees who are jointly employed by you and another employer; 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.
  • Two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA).
• An employee will be considered to be employed for a least 30 calendar days by the employer for purposes of the expanded Family and Medical Leave Act if an employer had the employee on its payroll for the 30 calendar days immediately prior to the day the employee leave would begin. For example, if an employee leaves on April 1, 2020, the employee would have needed to be on the employer’s payroll as of March 2, 2020.
• If you have a business with fewer than 50 employees, you may elect the small business exemption if providing the leave would jeopardize the viability of your business as a going concern. Such a business will be required to document why the business meets the criteria set forth by the DOL, who will provide more detail regarding this exception in forthcoming regulations.
• If you have employees who are home with their child because their school or place of care is closed, or the child care provider is unavailable, the employee may be eligible for both paid sick leave and expanded family and medical leave.
• Not all leave under the expanded act is paid leave. The only type of family and medical leave that is paid leave is expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act when such leave exceeds ten days.

Please click here for all the entire report: DOL Families First Coronavirus Response Act: Q&A. To view the Internal Revenue Service’s responses related to the credit, please click here: IRS and Labor Announce Plan to Implement Coronavirus Paid Leave.

We appreciate being your trusted business partner and advisor. If you have any questions, do not hesitate to reach out to our tax experts at The Bonadio Group.

The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We therefore make no warranties, expressed or implied, on the services provided hereunder.