To address employers’ lingering questions about the requirements of the federal law providing COVID-19-related emergency paid sick leave and emergency family and medical leave, the HRWatchdog blog recently published two articles.
• The first post tackles how to properly document Families First Coronavirus Response Act (FFCRA) leave to claim tax credits.
• The second uses the most recent guidance from the U.S. Department of Labor (DOL) to explain how to calculate an eligible employee’s hours of leave and their average regular rate for both emergency paid sick leave and expanded family and medical leave for COVID-19-related reasons.
Properly Documenting FFCRA Leave
The FFCRA provides fully refundable tax credits to cover the cost of the required leave. According to Internal Revenue Service (IRS) guidance, employers can begin taking advantage of the credits by withholding federal employment taxes equal to the amount of leave paid, rather than depositing them with the IRS. Employers will report this on their Form 941, Employer’s Quarterly Federal Tax Return.
The IRS requires certain documentation to claim the credits. First, employers will need to collect specific information when the employee gives notice of the need to take leave, including:
• Employee’s name;
• Dates for which leave is requested;
• Qualifying reason for leave; and
• Statement that the employee is unable to work or telework for that reason.
As previously mentioned in another HRWatchdog post, employees also must provide information specific to the qualifying reason for leave.
To read “Reminder: Properly Document FFCRA Leave to Claim Tax Credits” in full, please visit hrwatchdog.calchamber.com.
Calculating FFCRA Leave Hours, Rates
The DOL has also issued guidance on calculating an employee’s hours of leave and average regular rate.
Emergency Paid Sick Leave Hours
For employees with regular schedules, the FFCRA provides eligible full-time employees with 80 hours of emergency paid sick leave, and employees are considered full time if they’re scheduled to work at least 40 hours per week. Part-time employees with regular schedules are entitled to the number of hours equal to the hours they are normally scheduled to work over two workweeks.
Calculations get a little more complicated for employees with varying schedules and are expanded upon in the full HRWatchdog article.
Expanded Family and Medical Leave Hours
Under the FFCRA’s expanded family and medical leave, after the first 10 days of leave, employers must pay employees two-thirds of their average regular rate for their scheduled number of hours for each day leave is taken, subject to the statutory cap of $200 per day and $10,000 total.
If an employee has a normal work schedule, then the employee is entitled to the hours they’re normally scheduled to work on that day.
If an employee’s schedule varies, the employee is entitled to the average number of hours they were scheduled to work each workday (not calendar day) over the six-month period ending on the date the employee takes leave, including any hours in which the employee took leave of any type.
Average Regular Rate
For both emergency paid sick leave and expanded family and medical leave, the FFCRA requires pay based on the employees’ “average regular rate.” The average regular rate is calculated over all full workweeks during the six-month period ending on the first day leave is taken. If, over the six-month period, an employee is paid through fixed hourly wage or salary, the average regular rate would equal the hourly wage or hourly equivalent of their salary.
But, if an employee is paid through different arrangements, such as piece rate, commissions or tips, the regular rate may fluctuate from week to week. In that case, for each full workweek in the six-month period, employers will calculate all remuneration not excluded from the regular rate under the Fair Labor Standards Act. Then, employers will compute the number of hours worked for each full workweek. Finally, divide the total pay over the six-month period by all hours worked. The result is the average regular rate.
To read “DOL Helps Employers Calculate FFCRA Leave Hours, Rates” in full, please visit hrwatchdog.calchamber.com.