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Interpretation of the DOL’s FFRCA & IRS Regulations: What Documentation is Required?

April 3, 2020

The DOL issued more regulations on April 1 providing an additional interpretation of the FFRCA. One of the issues addressed included the notification employers can require for an employee requesting leave under either the additional paid sick leave or the expanded FMLA provisions.

For both forms of leave, an employer may require employees to follow reasonable notice procedures. Notice is required “as soon as practical” after the first workday or portion of a workday for which an employee receives paid sick leave to continue to receive such leave.

For sick leave for the employee, the employee must submit a signed statement containing:

  • Their name.
  • Dates for which leave is requested.
  • Coronavirus-qualifying reasons for leave.
  • A statement that the employee can’t work or telework because of this reason.

For leave caused by a quarantine or isolation order, an employee must provide the name of the government entity that issued the order.

For leave due to self-quarantining, the employee must provide the name of the healthcare provider making the recommendation.

To care for a quarantined person, the employee must provide either:

  • The government entity that issued the quarantine, isolation order.
  • The name of the healthcare provider who advised the individual to self-quarantine.

Normal FMLA certification rules apply for leave caused by an employee’s own serious health condition related to the coronavirus, or to care for the employee’s spouse, child, or parent with a serious health condition.

For leave under the expanded FMLA, the employee must provide:

  • The name of the child being cared for.
  • The name of the school, place of care, or childcare provider that closed or became unavailable due to Coronavirus-related reasons.
  • A statement representing that no other suitable person available to care for the child during the period of the requested leave.

If an employee fails to give proper notice, the employer should give them notice of the failure and an opportunity to provide the required documentation prior to denying the request for leave.

IRS Guidance

In order to claim a tax credit for leave paid under the FFCRA, an employer must submit proper documentation of the leave. The new IRS regulations provide some details about required documentation. The IRS Regulations say that employers must retain records and documentation related to and supporting each employee’s leave to substantiate the claims for the credits.

They must also retain:

  • Form 941, Employer’s Quarterly Federal Tax Return.
  • Form 7200, Advance of Employer Credits Due to COVID-19.
  • Any other applicable filings made to the IRS requesting the credit.

The information an employee must produce, maintained by the employer to substantiate eligibility for sick leave or family leave credits includes:

  • Their name.
  • The date or dates for which leave is requested.
  • A statement of the COVID-19 reason the employee is requesting leave and written support for such reason.
  • A statement that the employee is unable to work, including by means of telework, for such reason.
  • If based on a quarantine order or self-quarantine advice, the statement should include the name of the governmental entity ordering quarantine or the name of the healthcare professional advising self-quarantine.
  • When the person subject to quarantine is not the employee, that person’s name and relation to the employee shall be provided.

If due to a school closure or unavailability of a child care provider, the statement should include:

  • The name and age of the child or children.
  • The name of the school that has closed or the place of care unavailable.
  • A representation that no other person provides care for the child during the period for which the employee receives family medical leave.
  • With the care of a child older than 14 during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

Finally, additional documentation must be maintained, including:

  • Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees eligible for the credit, including:
    • Records of work, telework, qualified sick leave, and qualified family leaves.
  • Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.

This information is accurate as of April 3, 2020. It is subject to change based on any new legislation.

 

Anne-Marie L. Storey, Attorney at Law, Rudman Winchell
Anne-Marie Storey, Esq
Rudman Winchell
207-947-4501