On March 23, 2020, the Department of Labor (“DOL”) issued guidance regarding the Families First Coronavirus Response Act, which goes into effect on April 1, 2020, and which we wrote about here. Here are the takeaways from the guidance.
- The DOL expects to issue regulations in “April 2020,” but did not provide a date certain. The regulations will include guidance on whether, when, and to what extent employers with fewer than 50 employees are exempted from the leave requirements.
- The DOL will observe a temporary period of non-enforcement for 30 days after the Act takes effect, as long as the employer has acted reasonably and in good faith to comply with the Act. Good faith exists when the employer remedies a violation and makes the employee whole as soon as practicable, the violations were not willful, and the DOL received a written commitment from the employer to comply with the law in the future.
- In addition to tax credits for leave benefits provided under the Act, employers are also entitled to dollar for dollar reimbursement through a tax credit for amounts paid or incurred to maintain health insurance coverage.
- The guidance confirms that employees taking leave related to child care are entitled to up to $12,000 in the aggregate -- $2,000 for the 2 weeks of paid sick leave plus $10,000 for the 10 additional weeks of paid FMLA leave.
- Today, DOL provided a model notice for employers to post in the workplace, which can be found here.
We are also tracking another important development with respect to the CARES Act, Phase III of the relief package, which is currently part of ongoing negotiations before the Senate. Notably, a relevant provision in that proposed law would permit employers to take an advance on the tax credits during each payroll period. This section is important for employers because it provides financial relief to employers immediately and confirms that the IRS will not penalize them for failing to make tax deposits as required by Sections 3111(a) or 3221(a) of the Internal Revenue Service Code if the employer anticipates receiving an advance tax credit under this section.
We will continue to monitor movement of the CARES Act and provide updates as they occur.