Employer’s COVID-19 compliance checklist for Paid leave begins April 1, 2020!
Employer’s COVID-19 Compliance Paid Leave Checklist
ARE YOU READY?
If you have fewer than 50 employees, then paid leave for employees may be a shock to your operations. Welcome to the “upside down,” right? Today is the day that all employers with fewer than 500 (not 50) employees are legally required to offer emergency paid leave. This is no April Fool’s Day joke! Emergency paid leave is the law today and will remain the law until midnight on December 31, 2020. Is your compliance checklist ready? If not, the Department of Labor is giving you a few days to get your to-do list in order but come April 18th, no more excuses.
Q&A Style Webinars To Answer Your Pressing Questions
Over the last week myself and another employment attorney, Spencer Phillips put on 3 webinars. We addressed specific questions submitted by business owners regarding paid leave, unemployment benefits, tax credits and today about SBA loans with CPA John Briggs. You might find these Q&A style webinars helpful so check out the recordings:
- Webinar recorded on Tuesday, March 24, 2020.
- Webinar recorded on Friday, March 27, 2020.
- Webinar recorded on Wednesday, April 1, 2020.
Employer’s COVID-19 Compliance Paid Leave Checklist
COVID-19 Paid Leave Policy
The first item on your compliance checklist is a “Paid Leave Policy.” This is a written notice about your company’s policies regarding paid leave due to COVID-19 reasons. If you have an employee handbook, then this would be an additional policy addressing what’s going on right now and how it applies to your business. If you’ve never offered paid leave before then you probably don’t have such a policy included in your current employee handbook. Every business is different from the business next door, so your COVID-19 paid leave policy should be drafted specifically to your type of business, your expectations, and comply with the Families First Coronavirus Response Act. Here are some of the points your policy should address:
- How is the company keeping people safe
- How is the company securing a healthy environment
- How is the company creating a flexible workplace
- How is the company handling emergency paid leave requests
Then, you need to distribute the new policy to your team so everybody understands how this paid leave will work as it applies to your company.
Family First Coronavirus Response Act Notice
Along with the COVID-19 Paid Leave Policy and next on your compliance checklist is distributing the Family First Coronavirus Response Act Notice (Notice). Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees or posting this notice on an employee information internal or external website.
COVID-19 Employee Leave Request Form
Next on the compliance checklist is to put together a COVID-19 Employee Leave Request Form that employees will fill out when they need to request such leave. An eligible employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:
- The employee’s name;
- The date or dates for which leave is requested;
- A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
- 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 government 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 14 during daylight hours, a statement that special circumstances exist requiring the employee to provide such care.
If an employee’s kids are 14 or older and there is no special circumstance they require adult care then that employee would not qualify for such leave. Creating this as a form for employees to fill out will make it easier on you and your employees to be compliant with the documentation the IRS requires you to maintain.
Tax Credit Documentation
Finally on the compliance checklist is more documentation. An eligible employer will substantiate eligibility for the sick leave or family leave credits if, in addition to the information completed with an employee leave request form, the employer creates and maintains records that include the following information:
- 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 leave and qualified family leave.
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
- 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 (Employers Quarterly Federal Tax Return) that the employer submitted to the IRS or for employers who use payroll companies or other 3rd party payers, records of information provided to the 3rd party payer regarding the employer’s entitlement to the credit claimed on the 941.
You must retain all of these records for 4 years! Documentation will be your evidence to prove how you handled this and determine whether or not you deserve the requested tax credits. Yes, this will be a pain and maybe even a nightmare to keep track of all of this. But, if it saves your cash flow and increases your bottom line during this worrisome time, then it’s a no brainer to get it done. Get it done right and ask for help! Your accountants, payroll companies, business & employment attorneys are good resources so USE THEM.
Stay hopeful. Take it one day at a time. We are here for you at a socially safe distance, of course! You didn’t start your business to see it fail and Dana Ball has made it easy and affordable to protect your business.
Links to Bookmark of COVID-19 Resources for Business Owners
DOL Families First Coronavirus Response Act-Questions and Answers: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
IRS Tax Credit FAQ’s: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs/
EEOC What You Should Know About the ADA, the Rehabilitation Act, and COVID-19: https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm
FFCRA Temporary Rule: https://www.dol.gov/sites/dolgov/files/WHD/Pandemic/FFCRA.pdf
DOL Wage & Hour Question and Answers: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
DOL Coronavirus Resources: https://www.dol.gov/coronavirus
DOL Online Dialogue: https://www.dol.gov/newsroom/releases/whd/whd20200325
DOL Fact Sheet ffcra-employer-paid-leave: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
Utah Division of Workforce Services: https://jobs.utah.gov/covid19/uifaqemployers.pdf
SBA disaster loan application: https://disasterloan.sba.gov/ela/
Employer Guidance from the U.S. Chamber of Commerce: https://www.uschamber.com/sites/default/files/guidance_for_employers_to_plan_and_respond_to_the_coronavirus_031620.pdf
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