3 mistakes to avoid when implementing the FFCRA

3 mistakes to avoid when implementing the FFCRA
Table of contents
  • Mistake #1: Complying with the FFCRA when you might not have to

  • Mistake #2: Not calculating and re-calculating employee count correctly

  • Mistake #3: Not properly documenting and archiving

The Families First Coronavirus Response Act (FFCRA) went into effect April 1, 2020 and with it came a lot of uncertainty and ambiguity regarding how to best comply. In the days after the US Department Of Labor issued a series of frequent rolling updates in the form of PostersFAQ’s and a Webinar in hopes of providing more specific guidance.

With so many updates it’s easy to get lost in the ocean of information. Following is a list of three potential mistakes that you want to make sure to avoid.

Mistake #1: Complying with the FFCRA when you might not have to

FFCRA provides employers with 500 or less employees refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing up to two weeks of paid sick and up to 12 weeks of expanded family and medical leave wages to their employees for leave related to COVID-19.

However, your business might be exempt if you employ fewer than 50 employees and if providing an employee such leave would jeopardize the viability of the business. This can come in the form of:

  1. Your business expenses exceeding available business revenues that cause your business to cease operating at a minimal capacity;
  2. If the absence of the employee(s) requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the business;
  3. There aren’t sufficient workers to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

I’m certainly not encouraging companies with less than 50 employees to look for ways to not comply. Ultimately, your employees will remember how they were treated during these difficult times and if anything, this pandemic represents an opportunity for you reinforce and elevate your company culture. But if complying is going to bankrupt your business, you should seek an exception and communicate with your employees honestly about it. Going further, it’s a good time to crowdsource ideas from your employees about how to provide some level of benefit outside the FFCRA that would show them your business cares while not jeopardizing the company. Maybe you can’t do 12 weeks but six might enough.

Mistake #2: Not calculating and re-calculating employee count correctly

For the purposes of the FFCRA you’ll have to maintain an accurate headcount. This means that you’ll have to count full-time, part-time, employees on leave, temporary employees who are jointly employed by you and another employer and day laborers supplied by a temporary agency. You can exclude workers who are independent contractors under the Fair Labor Standards Act (FLSA). You’ll also have to recalculated total employees each time leave is requested by an employee between April 1, 2020 and December 31, 2020. Make it a point to maintain an up-to-date headcount and to speak to your managers often to make sure they are reporting leave correctly.

Mistake #3: Not properly documenting and archiving

In order to qualify for the FFCRA reimbursement employers are required to retain detailed documentation for four years. This applies regardless of whether an employer grants or denies a request for paid sick leave or expanded family and medical leave. The employer must document the following:

  • The name of the employee requesting leave;
  • The date(s) for which leave is requested;
  • The reason for leave; and
  • A statement from the employee that he or she is unable to work because of the reason.
  • If employee is subject to quarantine or isolation order, the name of the government entity.
  • If employee is subject to self-quarantine based on the advice of a health care provider, the name of the health care provider.

If your employee requests leave to care for his or her child whose school or place of care is closed, or childcare provider is unavailable, you must also document:

  • The name of the child being cared for;
  • The name of the school, place of care, or childcare provider that has closed or become unavailable; and
  • A statement from the employee that no other suitable person is available to care for the child.

Make sure that you come up with an easy to maintain and access record system. Some of the major HRIS’ like WorkdayUltimate Software and Ceridian and have already started updating their software to support for FFCRA leave and documentation requirements. I encourage you to reach out to them and enable those features if they already haven’t been.

More information on the details of the FFCRA can be found on the DOL’s COVID-19 and The American Workplace website.

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