COVID-19 Benefits Related FAQ
Here is a list of Frequently Asked Questions for COVID-19 related benefits issues. This resource will be updated as more questions and answers are available.
I hear there were three phases to Congressional response to COVID-19. What are these three bills?
Phase one is the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (H.R 6074), which provided $8.3 billion to fund acquisition of medical supplies and develop treatments and vaccines.
Phase two is the Families First Coronavirus Response Act (H.R. 6201), which required no-cost coronavirus testing, in addition to providing for paid leave under certain circumstances, and expanding food aid & unemployment insurance benefits during the outbreak.
Phase three is the CARES Act (H.R. 748) signed into law on Friday, March 27th.
We are a small business with 35 employees, and not subject to the FMLA. Does the FFCRA apply to us, and do we have to post the DOL employee FFCRA poster?
Yes. All employers with fewer than 500 employees, including part-timers, are covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA, and are required to post the FFCRA Rights notice by April 1, 2020.
How do we know if employees of our commonly owned companies count toward the 500 maximum headcount in order for FFCRA to apply to us?
The guidance states that typically, a corporation including its separate divisions, will be considered a single employer and all of its employees must each be counted towards the employee threshold for that single corporation.
If two entities are found to be joint employers under the Fair Labor Standards Act (FLSA), all of their common employees must be counted in determining whether Emergency Paid Sick Leave and Emergency child care FMLA leave must be provided.
In addition, the DOL’s Q&As adopt the integrated employer test under the FMLA to determine whether two or more entities are separate, or combined, for FFCRA’s Emergency child care FMLA purposes. Those factors under the FMLA include common management, interrelation between operations, centralized control of labor relations, and degree of common ownership/control. See 29 CFR 825.104(c)(2). If two entities constitute an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of FMLA requirements.
Who pays for the FFCRA Sick Leave and FMLA Expansion? Also, does this expansion only apply to employees who have to care for a child whose school or day care provider has been closed for a public health emergency?
Employers with fewer than 500 employees are required to pay their employees who qualify under HR 6201. They can claim a 100% tax credit for these payments. Eligible employees are those who have worked for the employer for 30 days and meet one of the criteria for leave below:
10 days of paid sick leave is available to employees who need leave for their own symptoms, or their own state or health care provider ordered quarantine. This leave is paid up to $511 per day, max of $5,110 for the full duration.
10 days of paid sick leave is also available to employees who need to care for a child or another person (not limited to family members) who is home because their school/daycare is closed, or because they are under self-directed quarantine. This leave is paid at 2/3 salary, to a max $200 per day, to a maximum of $2,000 for the 10 day/2 week period.
The remaining 10 weeks is for employees who need to care for children (limited to employees own children or another child they provide financial support to and act as a parent to) home from school because the school/daycare is closed for COVID-19 concerns. This remaining leave is paid at 2/3 salary to a maximum of $200 per day/$10,000 for the 10 weeks.
For the purposes of Emergency Paid Sick Leave, are “Shelter in place” orders and “Stay at home” orders the same as a “Federal, State Local quarantine or isolation order”?
It is our understanding that shelter in place and stay at home orders qualify under the law on the same terms of self isolation. Sick pay would be available for employees that cannot work due to stay at home orders imposed on their employers, who are not essential employers, requiring employees to stay home, and when these employees are not able to telecommute.
Conversely, if an employer is open for business and not required to reduce in person work staff to zero (for example if they are an ‘essential employer’ under the regulations), and an employee does not want to report to work because of the pandemic, but is not physically ill or caring for someone else, this employe is not entitled to paid sick leave, even if a stay at home order is in effect.
How do we calculate the rate of pay for employees that qualify for the 10 days of full salary to the $511 daily cap under FFCRA Paid Sick Leave?
The DOL’s Q&A confirms that employers must pay an employee for hours the employee would have been normally scheduled to work. The DOL confirmed that FFCRA sick time benefits are capped at 80 hours total over a 2 week period. The guidance also notes that an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and only 30 hours of paid sick leave in the second week because of the 80-hour cap. The DOL also stated that sick time paid out to the employee does not need to include a premium for overtime hours.
Employees who work part-time or irregular schedules will be entitled to payment based on the average number of hours the employee worked for the six months prior to taking the leave.
Can my employee take paid sick and FFCRA FMLA to care for his nephew?
The 12 weeks total for the childcare leave (due to school closures, etc.)—10 days of Emergency Paid Leave and 10 weeks for the remaining FMLA portion—apply to an employee taking the leave to care for a “son or daughter.” The DOL issued further guidance defining son or daughter for the purposes of the FFCRA as: “your own child, which includes your biological, adopted, or foster child, your stepchild, a legal ward, or a child for whom you are standing in loco parentis—someone with day-to-day responsibilities to care for or financially support a child.”
If the employee takes care of the day-to-day responsibilities for and provides financial support for his/her nephew, then they would be entitled to this leave. This person would get 10 days of the Emergency Paid Leave at two-thirds of the employee’s regular rate (capped at $200/day and $2,000 in the aggregate) and the remaining 10 weeks of the FMLA at two-thirds of the employee’s regular rate (capped at $200/day and $10,000 in the aggregate).
Please note, however, if you are already subject to the FMLA and this employee, for example, took 3 weeks of FMLA leave in January, then he/she would be entitled to only 9 weeks total for this leave (10 days of Emergency Paid Leave, and 7 weeks of FMLA). These new provisions do not add to the 12 weeks of FMLA leave.
What does the CARES Act say about employee student loan or tuition assistance?
IRC Section 127 excludes from an employee’s income amounts (up to $5,250 per year) paid by an employer for education assistance. The CARES Act expands the definition of “education assistance” to include any payments made by an employer prior to January 1, 2021, with respect to qualifying student loans. The payments can be made directly to the employee or to the relevant lender. Note that any amount paid by the employee under this new provision would not be deductible by the employee under IRC Section 221.
What does the CARES Act change about OTC medications, feminine products, and FSA/HSA/HRA funds?
In 2010, the Affordable Care Act changed the previous allowance for the use of FSA and HSA funds for over-the-counter drugs. The ACA required a prescription in order for individuals to use these pre-tax funds for such purchases. The CARES Act now changes the law on these purchases back to pre-ACA times, allowing individuals enrolled in these pre-tax accounts to pay for OTC drugs without a prescription. It also appears this is a permanent change that will not expire at the end of 2020.
An additional change to the list of eligible items for FSAs, HSAs and HRAs is the addition of ‘Menstrual products’ as eligible items. These products are defined as tampons, pads, liners, cups, sponges, or similar products used by individuals with respect to menstruation. This move puts these health products in line with other already eligible expenses.