30

December, 2020

Extension of FFCRA Credit Helps NYS Employers

By Tracey I. Levy

As a post-script to our last blog post, the latest federal COVID-19 relief package, which was signed into law on December 27, 2020, includes a short-term extension of the FFCRA tax credit that offers some additional financial relief for New York State employers.  As we previously discussed, the paid leave requirements of the FFCRA are set to expire December 31, 2020, and the new COVID-19 relief package allows those requirements to sunset.  However, those employers that voluntarily elect to continue to provide the paid leave that was available under the FFCRA, under that law’s eligibility requirements, can continue to claim a federal payroll tax credit through March 31, 2021 to offset the cost of that leave.  New York employers do not have an option with regard to providing COVID-19 leave, and therefore the extension of the FFCRA credit may be a valuable benefit to manage the associated costs.

There are some notable limitations on which employers can benefit from the federal tax credit:

  • Large Employers

Employers with more than 500 employees are subject to the New York State paid leave requirements, but were not subject to the FFCRA paid leave requirement and therefore cannot claim the credit;

  • Multiple Quarantines for the Same Employee

To the extent the reasons for leave under the FFCRA and New York State law have overlapped, the FFCRA tax credit was limited to a total of ten days of paid leave, per employee.  However, the New York State law does not appear to place a limit on the number of times an employee can receive paid leave, provided each leave is in accordance with a government-mandated quarantine or isolation order.  Once an employer has claimed the FFCRA tax credit for an employee, it appears that it cannot be claimed again for a repeat occurrence of quarantine.

New York State employers should consult with their tax advisor with regard to the availability of the tax credit in specific circumstances.

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17

December, 2020

FFCRA Is Ending, But NYS Employers Still Have COVID-Leave Obligations

By Tracey I. Levy

The Families First Coronavirus Response Act (“FFCRA”), which provides up to two weeks of paid, job-protected sick leave to covered employees for a variety of COVID-related reasons, and additional leave for care of a child related to COVID, is scheduled to sunset on December 31, 2020. Presently, there seems to be limited legislative or executive effort to extend the law beyond that date, even as we remain in the throes of the pandemic. That means that, as of January 1, 2021, employees will no longer be eligible for FFCRA leave, any employee who is on leave as of December 31, 2020 will be ineligible for continued leave after that date, and employers who continue to grant employees leave for an FFCRA-qualifying reason will not be entitled to claim tax credits for paid COVID leave days subsequent to December 31. In a nutshell, the sunset clause means an end to any federal paid leave benefit or tax credit, and restoration to the way things were back in March 2020, before the pandemic.

While those consequences are relatively simple to explain, the interplay with New York State law makes things a bit more complicated. New York State passed its own COVID-related leave law, which took effect on the same day as the FFCRA. New York State’s law grants all employees COVID-related leave if an employee is personally subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19, provided the employee is not physically able to work remotely while under quarantine. Employees are disqualified from the NYS COVID-related leave benefit only if they are being quarantined for having traveled outside the U.S., for non-work-mandated reasons, to a country for which the employee was on advance notice of a level two or level three travel notice having been issued by the CDC. New York State’s COVID-related leave law has no sunset date; rather, the leave benefit is specifically tied to COVID-19 and therefore, for as long as employees are subject to COVID-related quarantine or isolation orders, they remain eligible for the benefits provided under the state’s law.

As we noted previously in the Summer 2020 issue of our newsletter, Takeaways, employees who are directed by a healthcare provider to quarantine or isolate can obtain a quarantine or isolation order by following a process jointly defined by the New York State Departments of Health and Labor to request such an order from their local health department. New York City had issued a standing order with various appendices that, when satisfied, would be deemed to meet the state law quarantine order requirement, but the city has since withdrawn that page from its website.

For those employees who meet the NYS eligibility criteria, employers must provide the following, depending on their profitability and the size of their workforce:

  • 14 calendar days of job-protected, paid COVID-related leave, at the employee’s regular rate of pay, if the employer has 100 or more employees;
  • 5 calendar days of job-protected, paid COVID-related leave, at the employee’s regular rate of pay, and an additional 9 calendar days of job-protected, unpaid leave, if the employer has 11 to 99 employees or has fewer employees but had a net profit of $1,000,000 or more last year; and
  • 14 calendar days of job-protected, unpaid COVID-related leave, for all other employers with 10 or fewer employees.

Employees are entitled to apply for New York State Short-Term Disability and Paid Family Leave benefits, simultaneously and without any waiting period, during the unpaid portion of their quarantine leave, and all COVID-related leave is in addition to, and gets used before, any paid time off the employee may have otherwise available under the employer’s paid leave policies or the new New York State paid sick leave law.  New York State provides no reimbursement or subsidy to employers for the paid sick leave benefits required under the law.

As a reminder, FFCRA also provided employees with partially-paid leave benefits, of varying duration, in the event they were caring for a child or family member who was quarantined due to COVID. New York State law has no similar provision. However, to the extent an employee meets the eligibility criteria for Paid Family Leave (having worked at least 20 hours per week for 26 consecutive weeks), if either (i) the employee’s child has been quarantined and the employee is unable to work remotely while caring for that child, or (ii) the employee is unable to work because the employee needs to care for a close family member who contracts COVID-19, the employee can submit a claim for job-protected Paid Family Leave and receive paid time off benefits under that program.

New York State employers must therefore continue to provide COVID-related paid sick leave benefits to their employees, where the eligibility criteria are met, and shoulder those benefit costs, for as long as we are facing COVID-19-related quarantine orders.

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25

September, 2020

DOL Revises Regulations to the Families First Coronavirus Response Act

By Alexandra Lapes and Tracey Levy

Effective as of September 16, 2020, the United States Department of Labor (“DOL”) issued revised regulations to its temporary rule issued on April 1, 2020, implementing provisions of the Families First Coronavirus Response Act’s (“FFCRA”) paid sick leave and paid family leave mandates, to clarify workers’ rights and employers’ responsibilities, after a United States District Court for the Southern District of New York (“District Court”) struck down several portions of the temporary rule as invalid on August 3, 2020.

Specifically, the District Court ruled four parts of the DOL’s temporary rule regarding the FFCRA paid leave provisions were invalid: (1) the requirement that paid sick leave and expanded family and medical leave are available only if an employee has work available from which to take leave; (2) the requirement that an employee may take FFCRA leave intermittently only with employer approval; (3) the expanded definition of “health care provider” and whom an employer may exclude from being eligible for FFCRA leave; and (4) that employees who take FFCRA leave must provide their employers with certain documentation before taking leave. New York v. U.S. Dep’t of Labor, No. 20-CV-3020 (JPO), 2020 WL 4462260 (S.D.N.Y. Aug. 3, 2020).

As previously reported in our Law Blog, the Emergency Paid Sick Leave Act (“EPSLA”) grants paid sick leave to employees who are unable to work or telework due to a need for leave because of any of six COVID-19-related criteria. Similarly, the Emergency Family and Medical Leave Act (“EFMLEA”) applies to employees unable to work or telework due to a need for leave to care for a child due to a public health emergency.

The DOL’s revisions reaffirm and provide further explanation of the following:

• Employees may take FFCRA leave only if work would otherwise be available to them.
The DOL’s April 1, 2020 rule stated an employee was entitled to FFCRA leave only if the qualifying reason was the actual reason (or the but-for cause) why the employee was unable to work, and therefore did not apply if an employee was furloughed or was unable to work because an office was closed. The District Court held the work-availability requirement was invalid because the DOL had only explicitly applied it to three of the six qualifying reasons for FFCRA leave.

In response, the DOL has reiterated that an employee may take sick leave or expanded family and medical leave only to the extent that a qualifying reason is the sole (“but-for”) reason the employee is not working. The DOL extended that standard to all qualifying reasons for FFCRA leave. The DOL explained that removing the work-availability requirement would not serve the purpose of the FFCRA paid leave provisions, because if there is no work to perform, there would be no need to discourage potentially infected employees from coming to work. However, the DOL has made clear that there must be a legitimate, non-retaliatory reason why the employer does not have work for an employee to perform.

• Where intermittent FFCRA leave is permitted by the DOL’s regulations, an employee must obtain employer approval to take FFCRA leave intermittently.
The DOL also confirmed its original position that employer approval is needed to take intermittent FFCRA leave. The District Court had struck down the employer-approval requirement as not adequately explained, so the DOL responded by providing more of a rationale for this requirement.
Tackling anticipated confusion for employees who have children in school on a hybrid schedule, the DOL clarified that the employer-approval requirement does not apply to employees who take FFCRA leave to care for their children on remote learning days, provided the child is attending school on the days that the school is open to the child. For FFCRA purposes, the DOL has reasoned that, if the remote learning days are determined and directed by the school then each such day constitutes a separate qualifying event for FFCRA leave, and such absences are not deemed to be “intermittent”. Employer consent would still be required, though, if an employee’s child’s school is closed for multiple days, and the employee seeks to use FFCRA leave on only some of those days (an intermittent basis) while the school is closed.

Similarly, the DOL explained that an employee is not eligible for FFCRA leave if the employee elects remote schooling for the employee’s child when in-person attendance would otherwise be possible. However, if an employee’s child is under a quarantine order or has been advised by a health care provider to self-quarantine, then FFCRA leave would be available, and if the employee asks to use FFCRA leave on only select days that the child is quarantined at home, then employer approval would be required for the leave to be taken intermittently.

The DOL’s revisions also amend and clarify that:

• The definition of “healthcare provider” includes only employees who (1) meet the definition of that term under the FMLA regulations and (2) who are employed to provide diagnostic services, preventative services, treatment services or other services that are integrated with and necessary to the provision of patient care which, if not provided, would adversely impact patient care.
Under the FFCRA, employers are allowed to exclude employees who are “healthcare providers” from FFCRA leave coverage, recognizing these employees’ presence at work is essential in preventing disruptions to the health care system’s capacity to respond to COVID-19. The District Court struck down the DOL’s original definition of “healthcare provider” as being overly broad because it excluded employees in medical services who were not directly providing patient care. The DOL accordingly adopted a narrower definition of the term in the revised regulations that focuses on whether the employee is providing services that are integrated with and necessary for patient care.

• Employees must provide required documentation supporting their need for FFCRA leave to their employer as soon as practicable.
Under the FFCRA, employees are required to provide notice to receive paid sick leave after the first workday of leave, or for expanded family and medical leave, as soon as practicable, when the necessity for such leave is foreseeable. In the temporary rule issued by the DOL, it required this documentation be submitted “prior to” taking FFCRA leave, which the District Court held was inconsistent with the statute’s notice requirements. The DOL amended the new regulations to clarify that notice be provided as soon as practicable, which may be at the same time an employee requests leave, but the DOL recognized that is not necessarily always the case.

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30

March, 2020

US DOL Issues Poster, Guidance – Answers Some Open Questions Regarding Emergency Paid Sick Leave

By Tracey I. Levy

The U.S. Department of Labor has issued a mandatory poster and updated its initial guidance to answer many more of employers’ questions with regard to the application of the Emergency Paid Sick Leave law, which takes effect April 1, 2020.  The poster must be posted in a conspicuous place on the employer’s premises or on a website for employee information, or emailed or direct mailed to all employees.

The DOL’s guidance includes the following key points, many of which we had referenced in our last HR Strategy article on the new federal and New York State emergency paid sick leave laws.

Exception for Small Businesses:

Employers with fewer than 50 employees can demonstrate that providing Emergency Paid Sick Leave or Emergency FMLEA will jeopardize the viability of their business as a going concern, and thereby claim an exemption from the laws’ requirements, if an authorized officer of the business determines that:

  • Providing the paid leave would cause the business’s expenses and financial obligations to exceed available revenues, such that the business would cease operating at a minimal capacity;
  • The absence of covered employees would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
  • The business lacks sufficient workers who are able, willing, qualified and available at the time and place needed to cover for the employee(s) requesting paid leave and the work the requesting employees would perform is needed for the small business to operate at minimal capacity.

It remains unclear what documentation an employer will need to maintain to meet this legal standard, so employers seeking the exemption may want to err on the side of saving any potentially relevant financial records, communications and notes of their deliberative process.

Counting the 500-Employee Threshold

The federal emergency paid leave laws apply only to employers with fewer than 500 employees.  Only individuals employed in the United States (including all 50 states, the District of Columbia, or any Territory or possession of the U.S.) are included in that number.  Multi-national entities with a relatively small U.S.-employee presence therefore are covered by the federal laws as to their U.S. employees, even if they have more than 500 employees globally.  Also, full-time and part-time employees count equally toward meeting that threshold, as do employees on leave, temporary employees (even if they are employed through a temp agency), and day laborers supplied by a temporary agency.  Only independent contractors are excluded from the headcount.

Documenting Leave is Requested for a Qualifying Reason

The DOL has referred employers to the Internal Revenue Service for forms, instructions and information on what documentation is required to support an employee’s request for leave and what documentation must be retained to support the employer’s claim of a tax credit.  The IRS has not yet issued that guidance, but employers can check https://www.irs.gov/coronavirus for updates.

Generosity is Permissible, but Not Reimbursable

For higher-earning employees, employers may choose to pay them above the statutory cap for leave taken as Emergency Paid Sick Leave or Emergency FMLEA.  However, employers cannot claim a tax credit for payments in excess of the statutory cap.

Employers may also permit (but may not require) employees to apply their regular accrued, paid leave time under the employer’s policies to supplement the amount received for Emergency Paid Sick Leave or Emergency FMLEA.  For example, an employee who is receiving two-thirds of salary as Emergency Paid Sick Leave may request to use accrued, paid leave in one-third of a day increments to augment the federal law benefit.  In this situation, as well, the employer tax credit is limited to payments up to the statutory amounts.

Intermittent Leave May Be an Option

Employees must take Emergency Paid Sick Leave in full-day increments.  With that caveat, employers may permit an employee to use Emergency Paid Sick Leave and Emergency FMLEA on an intermittent basis (rather than in a single block of time) in select circumstances.  Intermittent leave may be authorized for an employee who is caring for a child whose school or child care center has been closed due to COVID-19 precautions, regardless of whether the employee is reporting to the workplace or working remotely.  If leave is being taken under any of the other five Emergency Paid Sick Leave categories, the guidelines provide that, unless the employee is working remotely, intermittent leave is not available.

Paid Leave is Not Required for Furloughed Employees or if the Workplace Has Been Closed

Employees are only eligible for paid leave if they are still working as of the date the leave is requested.  If the entire worksite has been closed or the requesting employee has been laid off, even temporarily, and the employee is therefore not doing any work for the employer, even remotely, then the employer is not required to provide any amount of paid COVID-19-related leave under the federal laws.  If an employer closes a worksite while an employee is already on covered paid leave, the employee must be paid for leave take only up to the date of closure.

Emergency FMLEA Counts as FMLA Time

For employers who are covered by the federal Family and Medical Leave Act, leave previously taken within the employer’s designated 12-month period counts against, and may thereby reduce, the leave available under Emergency FMLEA.  Similarly, to the extent an employee takes leave in the next eight months for Emergency FMLEA, the leave taken will count against the employee’s 12-month FMLA leave entitlement.

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