March 26, 2020

The Department of Labor has added to its collection of guidance documents about the COVID-19 outbreak (and other public health emergencies) and also announced, in conjunction with the Internal Revenue Service, that small and midsize employers can start to take advantage of two new refundable payroll tax credits that are designed to immediately and fully reimburse them for the cost of providing leave to their employees pursuant to the Families First Coronavirus Response Act (FFCRA), H.R. 6201, signed by President Trump on March 18, 2020. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus, according to the DOL. Eligible employers under the FFCRA. The FFCRA provides paid sick leave and expanded family and medical leave for COVID-19-related reasons. It also creates refundable paid sick leave credit and paid child-care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the act. Those employers will be able to claim credits based on qualifying leave that they provide between the effective date of the new law and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances. Highlights of the FFCRA. The DOL highlighted these key aspects of the legislation: For COVID-19 related reasons, employees will receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable. Employers will receive 100 percent reimbursement for paid leave pursuant to the FFCRA. Health insurance costs are also included in the credit. Employers will face no payroll tax liability. Self-employed individuals receive an equivalent credit. Reimbursement will be quick and easy to obtain. An immediate dollar-for-dollar tax offset against payroll taxes will be provided. Where a refund is owed, the IRS will send the refund as quickly as possible. Exemption. The FFCRA provides an exemption for employers with fewer than 50 employees, making them eligible for an exemption from the requirements to provide leave to care for a child whose school is closed or child care is unavailable in cases where the viability of the business is threatened. Enforcement loosened. The FFCRA’s requirements are subject to 30-day non-enforcement period for good faith compliance efforts, according to the DOL. Access to funds. To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not enough to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week. Employee paid leave rights. The Department of labor has added two new guidance documents to its COVID-19 resources, one of which maps out the new paid leave rights for employees: Two weeks (up to 80 hours) of paid sick time at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to federal, state, or local government order, or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or Two weeks (up to 80 hours) of paid sick time at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to federal, state, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and Up to an additional 10 weeks of paid family leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. Notably, most federal employees are covered by Title II of the Family and Medical Leave Act, which was not amended by the FFCRA, and are therefore not covered by these expanded family and medical leave provisions (which amend Title I of the FMLA). However, federal employees covered by Title II of the FMLA are covered by the paid sick leave provision. Employer paid leave obligations. The second new DOL guidance document addresses employers’ paid leave obligations under the FFCRA. The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Paid sick leave credit. The employers’ obligation to provide paid sick leave is capped, and correspondingly, so is the amount of the dollar-for-dollar sick leave credit that is available: For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days. For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period. Child

The U.S. Department of Labor (DOL) has issued guidance on the paid leave requirements under the federal Families First Coronavirus Response Act (FFCRA). The FFCRA expanded the federal Family and Medical Leave Act (FMLA) to allow partially compensated employee leave for child care purposes related to COVID-19. The FFCRA also provided for employee paid sick leave for specific COVID-19-related reasons. The law included other measures to address the effect of the coronavirus pandemic on workers. The guidance addresses issues such as: Which employers and employees are covered under the FFCRA; How much leave employers are required to grant employees and for what pay; Exemptions from the law; and What tax credits are available to employers to pay for the leave. The language of the FFCRA said it would take effect “not later than 15 days after the date of enactment.” DOL Q&As clarify that the leave provisions of the law take effect on April 1, 2020. This Compliance Bulletin contains the DOL’s guidance document. Overview The FFCRA requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. The DOL’s Wage and Hour Division administers and enforces the new law’s paid leave requirements. The language of the FFCRA said it would take effect “not later than 15 days after the date of enactment.” DOL Q&As clarify that the leave provisions of the law take effect on April 1, 2020. In general, the FFCRA requires covered employers to provide the following to all employees: Two weeks (up to 80 hours) of paid sick leave at an employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to federal, state or local government order or advice of a health care provider) or experiencing COVID-19 symptoms and seeking a medical diagnosis; or Two weeks (up to 80 hours) of paid sick leave at two-thirds an employee’s regular rate of pay where an employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to federal, state or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor. In addition, a covered employer must provide the following to employees whom it has employed for at least 30 days: Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. Covered Employers The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern. Most employees of the federal government are not covered by the expanded family and medical leave provisions of the FFCRA. However, federal employees covered by Title II of the FMLA are covered by the FFCRA’s paid sick leave provision.  Qualifying Reasons for Leave Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee: Is subject to a federal, state or local quarantine or isolation order related to COVID-19; Has been advised by a health care provider to self-quarantine related to COVID-19; Is experiencing COVID-19 symptoms and is seeking a medical diagnosis; Is caring for an individual subject to an order described in (1) or self-quarantine as described in (2); Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury. Under the FFCRA, an employee qualifies for expanded family leave if he or she is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19. Duration of Leave For reasons (1)-(4) and (6): A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period. For reason (5): A full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period. Calculation of Pay For leave reasons (1), (2), or (3): Employees taking leave must be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a two-week period). For leave reasons (4) or (6): Employees taking leave must be paid at two-thirds their regular rate or two-thirds the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a two-week period). For leave reason (5): Employees taking leave shall be paid at two-thirds their regular rate or two-thirds the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded

The coronavirus disease 2019 (COVID-19) pandemic has caused employers to make significant changes to their business practices, including onboarding. Managers and new hires across the country are navigating the unchartered waters of remote onboarding. The onboarding process—which is designed to cultivate a long-term relationship between the employer and the employee while fostering a feeling of belonging and an affirmation of making the right choice—is one that is extremely important for both employers and employees. As such, employers should still prioritize onboarding new hires, even though their training will be conducted virtually instead of in-person due to the COVID-19 pandemic. Why Is Onboarding Important? A study published in the Academy of Management Journal found that the first 90 days of employment is a pivotal time period for employees to build rapport with a company, its management and their co-workers. When you share your company’s goals and values with your employees while simultaneously showing them how to do their jobs, everyone benefits. Best Practices for Remote Onboarding If you have new hires who need to be onboarded remotely during the pandemic, keep the following best practices in mind: Meet with them in-person on their first day, if possible. If your local laws allow for it, try to meet with new hires at the office to welcome them to the company, get them set up with any necessary equipment and deliver any printed training materials. Be sure to test the equipment to make sure it works before you both leave the office. Keep social distancing guidelines in mind when meeting with new hires, which include keeping a 6-foot distance at all times. While it may seem odd, avoid shaking hands to prevent the spread of COVID-19. Set clear expectations with new hires. One of the most common mistakes employers make with onboarding plans is not setting clear expectations. Because your onboarding process is now being done remotely and you’re not there in-person to monitor a new hire’s progress, setting expectations becomes even more important. Expectations that should be discussed include the company’s values, the team’s objectives and the new hire’s responsibilities. Don’t overwhelm new hires with too much training. Training new hires remotely isn’t ideal for managers or the new employee. As such, prioritize the training and only train new hires on the skills that are absolutely essential for them to be able to do their job.  Overwhelming new employees with too much information at once when they’re working from home can lead to confusion, stress and frustration. Check in with new hires daily. Having employees work from home can help keep them healthy, but it can become isolating, especially for new hires. Schedule a daily call or video chat to help new hires feel like part of the team and give them the opportunity to ask questions. Match a new hire with a remote mentor. Assigning mentors to new hires can be highly advantageous to both parties. It gives new hires someone to contact for questions and helps mentors develop confidence and pride in their jobs. Encourage mentors to have daily check-ins with new hires to establish a professional relationship and help the new hires feel included. For More Information An effective onboarding program, regardless of whether it’s an in-person program or a remote program, provides employers with a solid starting point during which they can communicate their values to their employees and explain why they do what they do. It also helps new hires easily assimilate into company culture. An employee who has gone through a positive onboarding experience helps build a positive reputation for his or her company among talented job seekers. While onboarding your new hires may not be your first choice, the COVID-19 pandemic has required employers across the country to get creative. For more information about how your organization can respond to the pandemic, or for additional onboarding resources, contact Pinkerton Insurance Group.