Now that the emergency paid sick leave and expanded family medical leave requirements have taken effect, employers have questions about eligibility, notice, documentation, and record-keeping requirements. The federal Department of Labor (DOL) and Internal Revenue Service (IRS) have issued guidance documents – in the form of interim regulations (DOL) and FAQ (IRS) - which help answer some questions. The interim regulations (29 C.F.R. Part 826) may be found here and the IRS’ COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs may be found here.
Reasons for Leave
As we all know by now, emergency paid sick leave may be taken by an employee who is unable to work or telework due to a need for leave for any of six specific reasons.
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis from a health care provider;
- The employee is caring for an individual who is subject to a self-quarantine or self-isolation order or advice as detailed in reasons 1 or 2;
- The employee is caring for his or her son or daughter whose school or place of care has been closed for a period of time, or the child care provider of such son or daughter is unavailable, for reasons related to COVID-19; or
- The employee has a “substantially similar condition” as specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor. [The interim regulations specify that this section applies only to conditions defined by the Secretary of Health and Human Services between now and December 31, 2020.]
In addition, an employee who has worked for the employer for at least 30 days and is unable to work or telework because the employee has a need for leave to care for a son or daughter as described in reason #5 may take up to 12 work weeks of job protected leave under the Family Medical Leave Act expansion.
Eligibility: Causal Connection
The interim regulations (and preamble) clearly state that there must be a “but for” causal relationship between the reason for leave and the employee’s inability to work. Clearly, an employee who still reports to work in a physical location is unable to work when ordered or advised to self-quarantine or self-isolate, or who needs to seek medical treatment. But what about remote workers? A person who is capable of working remotely and who is under a self-quarantine order may still be able to work; the order itself is not preventing the work. Similarly, a parent whose children are home due to a school closure may not need to care for them if the children do not require supervision or if there is another suitable person available to care for them, such as a co-parent who has been furloughed. The regulations clarify that someone is “able” to work remotely when they are actually capable of performing job duties from home, the employer has work for them to do, and there are no extenuating circumstances that prevent them from working. This is the causal link – extenuating circumstances must be present to link the employee’s inability to work to the reason for leave.
Employers who are covered by the paid leave provisions are required to give employees notice of their rights by posting the DOL model notice. (Employers can either use the model notice itself or duplicate the text.) This requirement may be satisfied through a combination of physical posting and transmitting the notice by mail or email to remote workers.
Employee notice requirements are not as straightforward as one might hope. Under the interim regulations, an employee taking leave for reasons 1-4 and 6 cannot be required to give notice until after the first workday (“or portion thereof”) in which the employee uses emergency paid sick leave. After the first workday (or portion thereof), the employee may be required to give notice “as soon as practicable.” If an employee needs to use emergency paid sick leave for reason 5, the employee must give notice as soon as practicable, if the need is foreseeable. If any employee does not provide required notice, the employer then must give the employee notice and the opportunity to cure before denying the use of emergency paid sick leave. The regulations do not specify how much time the employer must allow the employee to cure.
The regulations also state that compliance with standard call out procedures may be reasonable, which may conflict with the timing requirements above, since most call out procedures require an employee to give notice of the need for leave before the employee’s shift, or during the first day of leave.
The DOL regulations state that an employee may give verbal notice of the need for leave; however, employers are required to maintain written documentation regarding the request, use, and denial of leave.
Documentation Requirements Vary
The documentation requirements speak to the causal element discussed. In terms of written documentation, each employee must provide:
- Employee’s name;
- Date(s) for which leave is requested;
- Qualifying reason for the leave; and
- Oral or written statement that the employee is unable to work because of the qualified reason for leave.
Based on the interim regulations and IRS requirements, there are additional information requirements for some categories of leave.
Reasons 1 and 2 (and 4): Name of governmental entity or health care provider issuing order or advice.
Reason 4: Name of individual and a statement regarding that person’s relationship to the employee. (The employee must have a personal relationship which would create an expectation that the employee would care for the individual (i.e., immediate family member, roommate, etc.).
Reason 5: Name and age of each child, name of closed school or unavailable child care provider, statement that no other suitable person (i.e., co-parent, co-guardian, other family member, usual child care provider) will be caring for the son or daughter during the period for which the employee takes paid sick leave or expanded family and medical leave, and – if any child is 14 years of age or older, an explanation of the special circumstances that require the employee to care for such a child during daylight hours.
NOTE: The interim regulations clearly state that leave for this reason is only available if “no other suitable person is available to care for the son or daughter during the period of such leave.” The preamble to the interim regulations also clarifies that leave is only available for this reason if the employee actually needs to care for the child and is actually caring for the child.
Employers are required to retain records relating to the request, use, and/or denial of emergency paid sick leave and expanded family medical leave for four years. If an employee provides oral statements regarding a request for leave, the employer must document these statements and retain them for four years, as must documentation of any exemptions taken by the employer.
In addition, the IRS requires the following documentation be retained (for four years after the payroll tax becomes due):
- Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework, and qualified sick and family leave.
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages. See FAQ 31 (“Determining the Amount of Allocable Qualified Health Plan Expenses”) for methods to compute this allocation.
- Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
- Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).
(See FAQ 44-46 in the IRS document linked above.)
What Employers Should Do Now.
Employers should modify leave request forms and practices consistent with the above, and ensure that all required documents are retained.
Any decision to deny an employee’s request for leave should be carefully documented for future challenges.
Melissa Calhoon Jones, co-chair of the labor and employment group, counsels companies on employment, labor, and immigration issues. For more information about these new amendments and other employment concerns, please contact her.
This has been prepared by Tydings for informational purposes only and does not constitute legal advice.