1) Are furloughed employees eligible for Emergency Paid Sick Leave or Emergency FMLA?
No. EPSL and EFMLA are only available to employees whose company still has work to perform but they are unable to work (or telework) because of one or more of the qualifying reasons above. If the employer implements a furlough because it does not have enough work or business, then the impacted employees are not eligible for EPSL/EFMLA. This remains the case even if the employer indicates that they plan to reopen. Furloughed employees should apply for unemployment benefits.
2) Who will receive the additional $600/week unemployment benefit?
Anyone whose earnings have been reduced or eliminated due to COVID-19 furloughs, layoffs, business closures, or school closures is automatically eligible to receive the additional $600/week from Federal Pandemic Unemployment Assistance Program, as part of the CARES Act. The application process and calculations for unemployment benefits differ by state, so be sure to check with your state’s employment commission.
Federal law permits significant flexibility for states to amend their laws to provide unemployment insurance benefits in multiple scenarios related to COVID-19. For example, federal law provides states flexibility to pay benefits where:
- An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
- An individual is quarantined with the expectation of returning to work after the quarantine is over; and
- An individual leaves employment due to a risk of exposure or infection or to care for a family member.
- Individual leave employment to care for a child whose school or childcare is closed due to COVID-19
The CARES Act has expanded eligibility to include those not typically eligible for UI, such as independent contractors, gig workers, and those with a limited work history. Self-employed workers with a limited liability company (LLC) or S corporation also qualify, as well as those who were on unemployment before the CARES Act was passed or who have exhausted their benefits.
3) If I am seeking a PPP loan, can I also take advantage of employer Social Security tax deferment?
No. The CARES Act provides three distinct benefit programs for businesses – the Payroll Protection Program loans, the Employee Retention Tax Credit, and Employer Social Security Tax Deferment. Employers can only take advantage of one of these programs. Participation in one of these programs precludes you from taking advantage of any of the others. No double-dipping!
4) Can PPP loan funds be used to pay the wages of employees who are out on qualified emergency paid sick leave or expanded FMLA?
Because E-PSLA and E-FMLA have their own, dollar-for-dollar tax credit you have to pick one or the other. Either pay someone their full wages with PPP money and have it forgiven after the 8 week period, or use the E-PSLA/E-FMLA tax credit to be reimbursed for those wages. An employer can’t double-dip and effectively pay for the employee’s time twice.
5) What is the difference between a furlough and a layoff?
A furlough is a temporary layoff or reduction in force with the goal of reinstating employees as business needs dictate. A layoff is more permanent in nature and involves terminating the employee. Typically, employees are not paid during furloughs but they do keep employment benefits such as health insurance. Both furloughed employees and laid-off employees can file for unemployment. You may use PPP loan money to pay employees even if they are furloughed and not working. The law was created to keep American workers on the payroll, regardless of whether or not they are working during this time.
6) Who is eligible for Emergency Paid Sick Leave and Emergency FMLA?
All employees, regardless of how long they have worked for the employer, of companies with fewer than 500 employees, including full, part-time, and temporary employees, are eligible for two weeks (up to 80 hours) of Emergency Paid Sick Leave (EPSL) for one of the following reasons related to COVID-19. This applies to non-profit organizations as well.
1. Employee is subject to a federal, state, or local quarantine or isolation order
2. Employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19
3. Employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
For reasons 1-3 above, employees are to be paid at 100% their regular rate of pay.
4. Employee is caring for an individual who is subject to an order set forth in (1) or (2) above
5. Employee is caring for a child whose school or childcare has closed due to COVID-19
6. Employee is experiencing any other substantially similar COVID-19 symptoms as specified by the Secretary of Health and Human Services
For reasons 4-6, employees are to be paid at 2/3 their regular rate of pay.
Employees employed for at least 30 days are eligible for up to an additional 12 weeks of Emergency FMLA (EFMLA) to care for a dependent child whose school or childcare has closed due to COVID-19 (reason 5 above). The first two weeks of the EFMLA are unpaid, but the employee can use the 80 hours of EPSL to account for these two weeks. They also could use any PTO/sick leave accrued under their employer’s regular policy, but the employer may not force the employee to use their accrued PTO/sick leave before using the EPSL and EFMLA as mandated in the Families First Coronavirus Response Act (FFCRA). Employees taking EFMLA are to be paid at 2/3 their regular rate of pay.
EFMLA may be taken intermittently (a few days a week); the EPSL may not unless it’s being used for reason #5. If an employee has already taken 12 weeks of FMLA (normal, unpaid, job-protected FMLA) in the last calendar year, he or she is not eligible to take EFMLA.
The U.S. Department of Labor encourages employers and employees to work together to arrive at mutually beneficial solutions during this unprecedented time. Where possible, ask for documentation from employees in order to prove eligibility (notice of school closure from a superintendent, a doctor’s note, etc.)
The leaves can be taken between April 1, 2020, and December 31, 2020.
Employers will be immediately reimbursed for the wages paid during these paid leaves through an immediate payroll tax credit. Dominion Payroll customers should send a request to email@example.com to set up separate earnings codes in order to track these hours and realize the tax credit.
*Businesses with fewer than 50 employees MAY be exempt from these mandated leaves. See question #58 on the U.S. Department of Labor’s super helpful FAQ page on this topic.