April 11, 2020

For business owners doing their best to not just survive, but thrive, during the coronavirus crisis, now is probably feeling like a stressful time. Plus, you also have your employees to protect. Don’t stress it! In our Employer’s Guide to COVID-19 series, we’re walking you through all of the latest laws and updates.

The government has recently formed the Families First Coronavirus Response Act (FFCRA). This benefit helps small business owners and protect employees and their families with emergency paid sick leave and expanded family and medical leave. It is meant to provide supplemental income and is based on the government’s current estimates of how long they expect the COVID-19 health emergency to last.

This post will cover the Expanded Family and Medical Leave Act (FMLA) portion of this legislation. We’ll outline how it works, who it applies to, and advise you on how to properly administer the paid leave. 

Check out our video summary of the expanded family leave, then read on for all the details. We’ve also included downloadable resources toward the end.

Expanded Family and Medical Leave Fast Facts

• Covers certain public and private businesses with less than 500 employees
• Required for all employees who have been employed for at least 30 calendar days
• Available to employees after first 10 days of leave
• Applies through December 31, 2020
• Addition to Emergency Paid Sick Leave
• NOT available to businesses on a temporary shutdown
• NOT retroactive – began April 1st

What employees are covered?

For employees who have been employed for more than 30 days, employers must provide up to 10 additional weeks of paid expanded family and medical leave. Pay will be at ⅔ or 66.66{b30e8b56753bfd926332494f83835a922418a2bfafec826e318c7c370e658baa} of the employee’s regular rate of pay OR ⅔ of the applicable minimum wage, whichever is higher.

Your employee qualifies for expanded FMLA if they are unable to work or telework because they need to care for their child when: 

• Their school or childcare provider has been closed
• Their regular childcare provider is unavailable due to a COVID-19 public health emergency

A child is defined as a biological, adopted, foster child, stepchild, legal ward, or a ward of a person acting as a legal guardian who is either:

• Under 18 years old; or
• 18 years or older and incapable of self-care due to a mental or physical disability

A childcare provider is an individual or organization that receives compensation for providing childcare services on a regular basis.

How does it work? 

For the first 10 days of leave, the time will be unpaid (unless you as the employer decide otherwise). Employees can, however, choose to use their accrued paid vacation, personal days, or sick leave during this period.

Employees also have the option to use paid leave under another part of the Families First Coronavirus Response act, which you can learn in our other blog post on the Emergency Paid Sick Leave Act.

After 10 days, the employer will provide expanded FMLA.

Duration

• Date public health crisis ends, and
• Up to 10 weeks

Calculation

Partial Payment = Greater of ⅔ or 66.66{b30e8b56753bfd926332494f83835a922418a2bfafec826e318c7c370e658baa} of the employee’s regular rate of pay OR ⅔ of the applicable minimum wage

• Maximum of $200 per day
• Maximum in total = $10,000 (over a 10 week period)

This, combined with the maximum two weeks of emergency paid sick leave, means an employee can receive up to $12,000 maximum over a 12 week period under the FFCRA.

How should I manage this benefit?

First things first, make sure you post the notice of FFCRA requirements in an obvious place on your premises. We recommend putting it in the same spot as your labor laws posters and other regulation signs. You can download this model notice from the Department of Labor for your business’s use.

When an employee requests expanded family leave, they should submit written notice to the appropriate manager. The notice should include the reason for leave and, if possible, the expected duration. We have included a sample expanded family leave policy with a request form. You can download and edit this form with your company’s information.

How will I pay for it?

To make this as easy and stress-free on employers as possible, the government is providing a 100{b30e8b56753bfd926332494f83835a922418a2bfafec826e318c7c370e658baa} tax credit of the funds paid out for the expanded FMLA. This credit applies to any qualifying wages paid under the FFCRA, up to the maximum amounts listed above.

Note: If you as the employer decide to pay more than the maximums, you will be responsible for those amounts.

Employers are also still required to pay for an employee’s health benefits during emergency paid family leave. In good news, the tax credits also apply to costs for maintaining health insurance coverage during this emergency leave.

Awesome! Now how do I get reimbursed?

Below is a sample calculation for an employer who has paid $5,000 in leave and would normally owe $8,000 on their next quarterly payroll taxes.

$8,000 (payroll taxes)
– $5,000 (sick leave)
__________________
$3,000 (remaining payroll taxes you’re responsible for)

It is as simple as that! If you already paid your taxes prior to this act and realized you now owe less, it’s an easy fix. All you have to do is submit a form for an immediate tax credit. You don’t even need to wait until the end of the year—you can submit this on your next regular deposit date.

Bonus Tax Tips:

• Run everything by your payroll specialist, CPA, or tax accountant to ensure your taxes are calculated correctly and you receive the maximum refund.
• Classify these entries under a unique code, like “Federal Paid Leave”, to keep your records clean and easy to read.

Navigating and Breathing Through COVID-19

While there is a lot of news and constant changes regarding coronavirus laws for businesses seemingly every day, keep in mind that the legislation has been created to support you and your employees. And keep checking back at the BlueLion blog, where we will be posting regular updates on everything you need to know as a business owner.

Head to our blog post on the Emergency Paid Sick Leave Act for more information and resources on the other portion of the FFCRA.

BlueLion is also offering FREE services to small business owners on COVID-19 related issues. Please contact us at 603-818-4131 or email us at info@bluelionllc.com. We’ll be here to help guide you through these uncertain times.

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.

April 11, 2020

As an employer navigating these uncertain and unprecedented times, you have a lot on your plate. You are probably wondering how to best protect your business and employees while following the latest regulations about the coronavirus. We are here to break it all down so you can be sure your business remains in good standing.

The good news is that the government recently enacted the Families First Coronavirus Response Act (FFCRA). This law requires employers to provide employees with paid sick leave or expanded family and medical leave for reasons related to COVID-19. These benefits are intended to help businesses help their employees by providing additional leave and supplemental income during this time—at no additional cost to employers!

In this post, we’re diving into the details and answering all your FAQ’s about one aspect of this legislation, the Emergency Paid Sick Leave Act. Watch our video summary of the paid sick leave benefit, then continue reading our complete guide. Be sure to stick around until the end for downloadable resources.

Emergency Paid Sick Leave Fast Facts

• Covers certain public and private businesses with less than 500 employees
• Required for all employees immediately, regardless of length of employment
• Applies through December 31, 2020
• Addition to employer’s existing sick leave policy
• NOT available to businesses on a temporary shutdown
• NOT retroactive – began April 1st

Employers are required to provide one of two benefits to all employees:

• Pay at the employee’s regular rate for two weeks (up to 80 hours) when the employee is unable to work because they are quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis

OR

• Pay at ⅔ or 66.66{b30e8b56753bfd926332494f83835a922418a2bfafec826e318c7c370e658baa} of employee’s regular rate for two weeks (up to 80 hours) because they are unable to work due to:
  • A need to care for an individual subject to quarantine
  • A need to care for a child whose school or childcare provider is closed or unavailable for reasons related to COVID-19
  • And/or the employee is experiencing a substantially similar condition

What employees are covered?

Under the FFCRA, an employee qualifies for paid sick leave if the employee is unable to work (or telework) because:

1. The employee is subject to a federal, state, or local quarantine or isolation order;
2. The employee has been advised by a health care provider to self-quarantine;
3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
4. The employee is caring for an individual to which points 1 or 2 apply;
5. The employee is caring for a child if the child’s school or place of care has been closed due to COVID-19 precautions; or,
6. 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 the Treasury.

How does it work? 

Next, let’s take a look at how to calculate emergency paid sick leave for your employees.

Duration

Full-time employees are eligible for up to 80 hours of leave, while part-time employees are eligible for the number of hours they work on average over a two-week period.

Calculations

For Qualifying Reasons 1-3 listed above (i.e., if the employee directly is sick/under quarantine): 

• Maximum of $511 per day
• Maximum total = $5,110 (over a 2 week period)

For Qualifying Reasons 4-6 listed above (i.e., if the employee is caring for someone else): 

• 2/3 (66.66{b30e8b56753bfd926332494f83835a922418a2bfafec826e318c7c370e658baa}) of employee’s regular rate of pay
• Maximum of $200 per day
• Maximum total = $2,000 (over a 2 week period)

How should I manage this benefit? 

First, make sure you post the required notice of the FFCRA requirements in a conspicuous place on your premises. We recommend posting it in the same area as your labor law posters. We’ve included a download of the Department of Labor’s model notice for you.

As for the process, your employees should notify the appropriate manager of their need for leave and the reason. We’ve also included a downloadable sample emergency sick leave policy with a request form. You can edit this policy with your business details and distribute it to your employees.

How will I pay for it? 

This is the part where you can breathe a sigh of relief because you as the employer will be reimbursed for 100{b30e8b56753bfd926332494f83835a922418a2bfafec826e318c7c370e658baa} of the costs!

The government is providing business owners with a dollar-for-dollar tax credit 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 maximum payments listed above. 

To answer another question, yes, you are still responsible for an employee’s health benefits during emergency paid sick leave. Fortunately, applicable tax credits extend to amounts paid or incurred to maintain health insurance coverage.

Ok great, so how do I get reimbursed? 

Let’s walk through it with an example calculation:

You (the employer) paid $5,000 in sick leave and your next quarterly payroll taxes would total $8,000.

$8,000 (payroll taxes)
– $5,000 (sick leave)
__________________
$3,000 (remaining payroll taxes you’re responsible for)

Did you pay your taxes before this act was finalized and discover you actually owed less? No worries! You can simply submit a form for an immediate tax credit. The good news is that you don’t need to wait until the end of the year to do this, but can submit the form on your next regular deposit date.

Bonus Tax Tips: 

• Double-check with your payroll specialist, CPA, and/or tax accountant to ensure your taxes are calculated correctly with the new expanded leave policies.
• Create a new deduction code in your payroll system to keep your records and paperwork clean.

Stay Compliant and Protect Your Employees

There is a lot of legislation and information being released and updated daily, but this is no reason to get overwhelmed! These programs are intended to protect both businesses and employees. 

Check out our blog post on the Expanded Family and Medical Leave Act for more information and guidance on the second aspect of the FFCRA.

If you have additional questions or concerns, please contact BlueLion at 603-818-4131 or email us at info@bluelionllc.com. We are currently offering FREE services to small employers regarding COVID-19 related issues. We are happy to help your company stay compliant and come out successful on the other side of this.

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.