The IRS has finally issued much-awaited FAQ on Families First Coronavirus Response Act (FFCRA). Notably, the IRS has taken a much stricter interpretation of the FFCRA than many practitioners (including me!) were when attempting to interpret the law without any guidance. I highly encourage businesses to review the website and FAQ – because the FFCRA is a tax credit act, HR may usually shy away from reading IRS guidance. However, it does provide important guidance about eligible employees, ages of children, amount of parents that can take the leave at one time, etc.

The guidance also provides that employers must retain records and documentation related to and supporting each leave request as well as Form 942, Employer’s Quarterly Federal Tax Reurn and Form 7200, Advance of Employer Credits Due To COVID-19, and any other filings made to the IRS. In order to get the news out quickly, I’m going to keep this short and sweet for now and encourage all employers (both HR and finance side) to start by reviewing the IRS FAQs on COVID-19 and FFCRA.  Combine that guidance with the DOL guidance and I think we’re starting to get a much better handle on this than a few days ago!

The DOL has finally issued the poster that employers must post notifying employee of their rights under the FFCRA in both English and Spanish. This must be posted and kept posted, “in conspicuous places on the premises of the employer where notices to employees are customarily posted.” This requirement can be met, however, by e-mailing the notice poster to employees, or by posting it on your external or internal website.

On Saturday, March 28, the U.S. Department of Labor updated its Families First Coronavirus Response Act: Questions and Answers.  While this is still not the regulations that we are all waiting for, it does provide compliance assistance to employers until the regulations are issued. I’ll write about more issues later, but probably the single most question I get asked is related to whether a small business is exempt from the Families First Coronavirus Response Act (FFCRA). Here is the DOL’s current position (and what I expect the regulations will support):

A small business (less than 50 employees) is exempt from the FFCRA when “doing so would jeopardize the viability of the small business as a going concern”. Sounds subjective right? Well, here’s where the regs will come in handy. Until then, the DOL has stated that a small business is exempt if the following conditions are met:

  1. It employs less than 50 employees;
  2. Leave is requested due to school/day care closure due to COVID-19 reasons; and
  3. An authorized officer of the business has determined that one of the following 3 conditions are met:
    1. The application of the FFCRA would result in expenses and financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
    2. The absence of of employee(s) requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
    3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee(s) requesting leave, and these labor or services are needed for the business to operate at a minimal capacity.

So, for now, if you are a small employer and can answer yes to the above three criteria, until we get better guidance from the DOL, the President/CFO/CEO should document that the above conditions are met prior to denying leave to employees under the FFCRA.

Additionally, keep in mind that if you determine you are exempt for one, you are exempt for all. It is a business exemption – not an individual exemption. Thus, if you determine your business is exempt, you also cannot take advantage of the tax credits. It’s the you can’t-have-your-cake-and-eat-it-too theory.

And finally, if you do continue business as usual, keep in mind that you must still follow Governor Walz’s stay-at-home order until April 10, and those that can work remotely, must.

Those that cannot work remotely, should be given social distance opportunities (i.e. skip the handshakes, open up new spaces for breaks), PPE where appropriate, sanitized work space, etc. however possible. Per the EEOC’s guidance, yes, you can take temperatures of those reporting to work during a pandemic, so long as you follow appropriate guidelines.

Wow – how fast things can change in a day! Following up to my post yesterday, as all of Minnesota is well aware now, Governor Walz issued his Stay-At-Home Executive Order 20-20 effective March 27 at 11:59 pm to April 10, 2020. I’ve barely had time to write this post as I’ve been on the phone constantly helping employers navigate whether they are exempt from the order as a critical business. So, apologize for the delay, but here you go…

  1. Read the order.  If your business is listed there as exempt – you’re good to go.
  2. Check the CISA list. As I blogged about yesterday, if your business is on the list, it is exempt.
  3. Check DEED’s NAICS list. Minnesota Department of Employment and Economic Development (DEED) issued a list by NAICS code as to whether a business is considered “critical”. Note – the list changed between last night and this morning, so if you were “NO” before you may be “YES” – so if you are a “NO” today, keep checking it.
  4. Ask for an Exemption Clarification. If you are unsure, you may send a request for clarification to DEED for your business.

Finally, I’m being asked a lot about providing employees “proof” of their work status to get to and from work during the shutdown.  I’m not aware of any such requirement. However, I am aware that employers are voluntarily providing each employee with a letter that confirms they are exempt and need to travel to work – while not necessary this is not a bad idea for employers to confirm to employees that they are exempt and need to come to work.

And finally, don’t forget that even exempt businesses do not have carte blanche to continue to operate as normal – it is only the jobs that cannot be done remotely that are exempt; if employees can work remotely, they must. If employees must come to work, to the extent possible, provide for social distancing (if possible, add staggered break and lunch times, multiple shifts, reduce workforce presence, etc.).

As Wisconsin’s Governor Evers has issued a “Safer At Home Order“, Minnesota businesses are scrambling to determine whether, in the event Governor Walz issues a similar executive order, their employees will be exempt from such order. Why does this matter? It allows employers to keep employees working (to an extent) and require that they maintain their normal work schedule. The DHS CISA guidance specifically notes President Trump’s Coronavirus Guidance for America which states:

If you work in a critical infrastructure industry…you have a special responsibility to maintain your normal work schedule

As expected, Gov. Evers included all businesses on the Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA)list of 16 critical infrastructure sectors during COVID-19. This is a list that most states (that I’ve seen) have included in their list of businesses that may remain open in the event of a shut-down. Below is the list and a few sub-items for businesses:

  1. Chemical Sector
  2. Commercial Facilities Sector
  3. Critical Manufacturing Sector
    1. Primary metals manufacturing
    2. Machinery manufacturing
    3. Electrical equipment, appliance, and component manufacturing
    4. Transportation equipment manufacturing
  4. Dams Sector
  5. Defense Industrial Base Sector (note, if your business is a supplier/subcontract within this sector, you will likely get a letter from the government contractor confirming this – I have seen several already sent to MN employers)
  6. Emergency Services Sector
  7. Energy Sector
  8. Financial Services Sector
  9. Food and Agriculture Sector
  10. Government Facilities Sector
  11. Healthcare and Public Sector
    1. Workers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences.
    2. Support to ensure the effective removal, storage, and disposal of residential and commercial solid waste and hazardous waste
  12. Information and Technology Sector
  13. Nuclear Reactors, Materials, and Waste Sector
  14. Transportation System Sector
    1. Employees who repair and maintain vehicles
    2. Automotive repair and maintenance facilities
    3. Manufacturers and distributors of packaging materials, pallets, crates, containers, and other supplies needed to support manufacturing, packaging staging and distribution operations.
  15. Water and Wastewater Systems Sector

If Minnesota gets to this point, I will certainly expand upon this in another post.

Update: To determine whether your business is a critical business under the Minnesota Stay-At-Home Order, read my next blog here.

Minneapolis has issued a FAQ regarding COVID-19 and the Minneapolis Sick and Safe Time Ordinance. In short, the document outlines how the city of Minneapolis is “interpreting” the ordinance as it relates to earned sick and safe time (ESST). While I believe they are taking some liberties with their interpretation of the ordinance, employers should know what guidance the city is providing…

ESST Should Be Approved For:

  • Coronavirus symptoms, testing or infection for both themselves and care of a covered family member.
  • Covered family members’ school or place-of-care closure.
  • Workplace closure by order of public official.
  • Quarantine following close personal contact with Coronavirus infected or symptomatic person.

Other Guidance:

  • Employers may expand the reasons they allow use of ESST (for example, if work hours reduced).
  • Employers are “encouraged to be flexible with employees wherever possible” (translated: you cannot err by allowing the use of ESST – remember once it is used it is gone).
  • Preemptive self-quarantine is not covered (i.e. if they have no reason to believe they are sick).

Finally, despite the ordinance, employers should not forget about FMLA, EFMLA, emergency paid sick leave and other possible leaves that may apply.

 

When navigating the Families First Coronavirus Response Act (“FFCRA”), Minnesota employers should not forget about Governor Walz’s Executive Order 20-02. This order states that district schools must provide care to, at a minimum, district-enrolled students 12 and younger of emergency workers. The state has classified (so far) workers into “Tier 1” and “Tier 2” in this guidance.

What does this mean? Tier I workers will not need the 12 weeks of EFMLA (I hesitate to say exempt), as they do not need leave to care for a minor child (unless the child is 13-17 and their parent is unwilling to leave their child alone). Similarly, Tier I workers would not need emergency paid sick leave (see my other blog) for reason #5 (to care for child whose school closed).

TIER 1 WORKERS

  • Healthcare personnel (PCAs, pharmacy, mental health)
  • Emergency medical services personnel (full-time)
  • Law enforcement / firefighter personnel
  • Correctional services
  • Courts (full-time employees)
  • Public Health

TIER 2 WORKERS

Minnesota has further clarified (though not an order from the Governor) that schools “should make every effort” to provide care to “school-aged children” of Tier 2 workers (not the actual guidance expands upon each of the below which I’m not going to specifically post). Thus, if an employee has a school district that is willing/able to provide care for Tier 2 workers they also should not need EFMLA:

  • Educators, child care workers
  • State and local essential IT personnel
  • State workers essential for continuance of unemployment insurance
  • Substance disorder treatment workers
  • Medical examiners
  • National Guard (if activated)
  • MNDoT employees
  • Public works
  • Water treatment, wastewater
  • Solid waste and infectious and hazardous waste management
  • Day-to-day operations/emergency response for gas and electric utilities
  • Food distributions workers
  • Other shelter staff and outreach workers
  • Telecommunication network operations

In short, if you are a Tier I business, it is unlikely that your employee should need EFMLA. If you are a Tier I business, it would depend on whether your employee(s) can get school coverage at their district for their child(ren).

On March 17, 2020, Minnesota Governor Tim Walz issued Emergency Executive Order 20-06 – Providing for Emergency Relief from Regulations to Motor Carriers and Drivers Operating in Minnesota.  This executive order provides relief for certain safety requirements to motor carriers providing direct assistance to support emergency relief efforts.  Notably to carriers reading my blog, this affects not only weight restrictions but also hours of service.  Below is a summary, as usual, the link to the order is above. And a huge thank you for what you do!

  • Effective for 30 days (until April 17, 2020).
  • Vehicles and drivers providing direct assistance for emergency relief efforts are exempt from certain regulations (see the order).
  • “Direct assistance” means – “transportation by a motor carrier or its driver(s) incident to the immediate restoration and/or delivery of essential supplies including food, medical supplies, and household items, related to the COVID-19 pandemic.”
    • It does not include routine commercial deliveries, transportation of mixed loads (including non-emergency items).
  • Among other things, it relaxes regulations relating to:
    • Weight restrictions.
    • Hours of service for carriers and drivers.
  • However, a motor carrier cannot “require or allow a fatigued or ill driver to operate a commercial motor vehicle.”
  • The exemption ends when the driver or vehicle used is no longer destined for the emergency relief effort or when dispatched to another location to begin operations in commerce.
  • If requested, a driver who states they need immediate rest shall be relieved of all duties for 10 consecutive hours.
  • Upon expiration of the executive order, all such drivers must receive at least 10 hours off duty.

Minnesota Governor Tim Walz has issued a series of emergency executive orders (8 as of the date of this post) relating to COVID-19 that impact Minnesota employers. One very important to Minnesota employers is Emergency Executive Order 20-05Providing Immediate Relief to Employers and Unemployed Workers During the COVID-19 Peacetime Emergency

Effectively March 16, 2020, the executive order suspends “strict compliance” with the Minnesota Unemployment Insurance Law until December 31, 2020.

  • Applicants are eligible for unemployment benefits if:
    • A determination has been made by health authorities or by a health care professional that the presence of the applicant in the workplace would jeopardize the health of others, whether or not the applicant has actually contracted a communicable disease;
    •  A quarantine or isolation order has been issued to the applicant;
    • There is a recommendation from health authorities or by a health care professional that the applicant should self-isolate or self-quarantine due to elevated risk from COVID-19 due to being immunocompromised;
    • The applicant has been instructed by their employer not to come to the employer’s place of business due to an outbreak of a communicable disease; or
    • The applicant has received a notification from a school district, daycare, or other childcare provider that either classes are canceled or the applicant’s ordinary childcare is unavailable, provided that the applicant made reasonable effort to obtain other childcare and requested time off or other accommodation from the employer and no reasonable accommodation was available.
  • The unpaid waiting week is suspended (it will be paid “as quickly as possible).
  • Recipients of unemployment do not need to actively seek suitable employment that puts their health or safety at risk, or that of others.  Workers that have been laid off temporarily may meet this requirement by staying in contact with their employer.
  • Unemployment benefits paid as a result of COVID-19 will not be used in computing the future unemployment tax rate of a taxpaying employer.
  • The five-week benefit limitation is waived for business owners.
  • The executive order is in effect during the peacetime emergency declared in Executive Order 20-01.

It should also be noted that due to the large volume, the State is encouraging employees that they can apply “any day this week or even next week and get paid for this week.” More information from Minnesota Unemployment Insurance can be found here.

As time goes on, I will do my best to update you all with questions I am asked frequently about the Families First Coronavirus Response Act (Families First Act or FFCRA) which includes the Emergency Family and Medical Leave Expansion Act (EFMLA) and the Emergency Paid Sick Leave Act (SPSLA).  This post will be updated continuously with my read of the Families First Act as much as I am able (you’d be surprised how many employers think they are the first to ask a question – I assure you, you are not alone!).

  1. Is the 80 hours of paid sick leave in addition to PTO/vacation/sick time already offered? YES.  The EPSLA specifically states that an employee “may first use” the paid sick time (for COVID-19 reasons) and an employer “may not” require them to use other leave first.  Sec. 5102(e).
  2. When counting 500 employees for EFMLA, does the 75 mile rule apply as with FMLA? NO. For purposes of EFMLA, the term “eligible employee” is all employees who have been employed for 30 days – the exclusion for employees who work at a worksite of less than 50 employees within 75 miles of another worksite was stricken.
  3. Does the revision to the 500 employee threshold (versus 50) change the FMLA?  NO. The EFMLA only changes the FMLA definitions “with respect to leave under section 102(a)(2)(F)”.
  4. Does it apply to non-profit corporations?  YES.  Section 7001 and 7003 allow for the “refundability of excess credit”.  Though, you should contact your CPA if you have questions – I am not a tax attorney!
  5. What is the Effective Date?  April 2, 2020 – December 31, 2020.
  6. Do employers of 500+ employees have to provide EFMLA, even though they do not get a tax credit?  NO.  Employers with 500+ employees do not need to provide EFMLA and are ineligible for the tax credit.
  7. When will the DOL regulations be published regarding whether employers of less than 50 employees are exempt?  According to the DOL website, this is anticipated in “April 2020”.  Given it goes into effect April 2, hopefully by April 1.
  8. Is the 12 weeks EFMLA in addition to FMLA, for a total of 24 weeks?  NO.  It just adds another reason for FMLA for a broader group of employees.