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New IRS Requirements for Documenting FFCRA Paid Leave Requests

By Randall Sutton, Partner – Employment Law & Litigation Practice Group

The Department of Labor (DOL) and IRS provided additional guidance for employers last week regarding paid leave requests under the Families First Coronavirus Response Act (FFCRA). Employers who grant paid leave under the FFCRA are eligible to have 100% of the wages paid offset by a tax credit. However, the IRS has now provided strict rules for documenting leave requests. In light of the IRS guidance, employers are well-advised to use a written leave request that contains the required employee acknowledgment. We have prepared a complaint form that you can download for your use HERE.

The IRS guidance explains that eligible employers who pay qualified leave wages will be able to retain an amount of all federal employment taxes equal to the amount of the qualified leave wages paid, plus the allocable qualified health plan expenses and the amount of the employer’s share of Medicare tax imposed on those wages, rather than depositing them with the IRS. The federal employment taxes that are available for retention include federal income taxes withheld from employees, the employees’ share of social security and Medicare taxes, and the employer’s share of social security and Medicare taxes with respect to all employees.  

To the extent the federal employment taxes yet to be deposited are not sufficient to cover the employer’s cost of qualified leave wages, plus the allocable qualified health plan expenses and the amount of the employer’s share of Medicare tax imposed on those wages, the employer will be able to file a request for an advance payment from the IRS. The IRS expects to begin processing these requests in April 2020.

The IRS has placed strict rules on the documentation necessary to support the request for a tax credit. The employer must provide:

  1. The employee’s name;
  2. The date or dates for which leave is requested;
  3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
  4. A statement that the employee is unable to work, including by means of telework, for such reason.

In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.

In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

The Department of Labor has also updated its FAQs related to the FFCRA. The FAQs provide additional guidance for healthcare employers and small businesses regarding potential exclusions from coverage. The guidance also clarifies that an employee who has previously used up all of his or her 12-week bank of FMLA will not be eligible to use additional EFMLA for school or daycare closures.

Speaking of updates, the EEOC has updated its guidance regarding reasonable accommodations and the limits of employer rights related to seeking medical information and providing accommodations. See the updated guidance HERE. For example, the EEOC guidance clarifies an employer’s right to require the use of masks and take employee temperatures.

The challenges presented by COVID-19 for employers and their employees are changing on nearly a daily basis. We will continue to update you as additional developments arise. Please contact us if you need guidance with regard to your specific issues.

 

Click here to download the written leave request form we have created.

 

Randall Sutton is a partner in the Employment Law and Litigation practice groups. Randy is also a member of the Health and Wine & Vine industry groups. The information in this article is not intended to provide legal advice. For professional consultation, please contact Randy at rsutton@sglaw.com at Saalfeld Griggs PC.  503.399.1070. © 2020 Saalfeld Griggs PC