As with COVID-19, there has been a lot of confusion and a lot of questions in regards to the Families First Coronavirus Response Act that goes into effect on April 1, 2020 and applies to leave taken between April 1, 2020, and December 31, 2020. It applies to businesses that have less than 500 employees, and there is a small business exemption for companies with less than 50 employees, as paying the expanded sick leave could result in the loss of the business.
If you have more than one corporation or limited liability company, you do have to put all of your employees from all companies together to count 50, and most likely, you are going to meet the Integrated Employer Test. Those multiple companies will be considered a single entity if you don’t have all of the books, bank accounts, records of meetings, and other company documentation. However, if you don’t have 50 employees, what is needed to qualify for this exemption is still up for debate, as the government is still working on the details of this matter.
The hours counted for a full-time employee is the standard 40 hours a week. The hours counted for a part-time employee is the number of hours worked for the past two weeks. You must count overtime hours in calculating pay due to employees, but it must be capped at 80 hours in a two-week-period. Please note that you’re only required to pay this expanded sick leave to employees that have been working for your business for 30 days or more. For example, an employee that wants to take leave on April 1, 2020 would need to have been on your active payroll as of March 2, 2020.
With this new Act, unlike California’s paid sick leave, you can ask your employees for appropriate documentation. This includes: the employee’s name, the qualifying reason for requesting leave, and a statement from the employee stating that he or she is unable to work. If your employee is requesting leave due to the fact that their child’s school or childcare is closed, as long as your employee has worked for your business for at least 30 days, you do need to pay extended paid sick leave.
If you closed your business due to the coronavirus before April 1, the effective date of the FFCRA, you do not need to pay the extended sick leave or expanded family and medical leave. In this case, the employee will have to file for unemployment benefits. If you close your business after the effective date of the FFCRA, you do not need to continue to pay employees that are on the extended paid sick leave. You can stop paying on the date that you close your business. If you keep your business open, but furlough employees on or after the Act goes into effect, you are not required to pay the expanded leave if you furlough employees because you don’t have enough work for them.
If you close your business on or after April 1, 2020, but intend to reopen and have told your employees that you intend to reopen the business at some point in the future, you do not have to pay the expanded leave while your business is closed. Additionally, if you cut your employee’s scheduled hours, you do not have to pay the extended leave for the hours that were reduced.
This is a tough time in our lives and in our businesses. The more information we have, both on COVID-19 and the Families First Coronavirus Response Act, the better we’re able to be proactive and we’ll be able to get through this pandemic stronger than ever.
Stay healthy and safe.
