What Documentation Must an Employee Provide for EPSL and/or E-FMLA Leave?
In the two weeks since the Families First Coronavirus Response Act (“FFCRA”) was enacted, we have received countless questions about the FFCRA’s refundable tax credit for paid wages and qualified health care expenses corresponding to employees’ use of Emergency Paid Sick Leave (“EPSL”) and Emergency FMLA Leave (“E-FMLA”). Many of these questions were echoed at our recent FFCRA webinar, which can be viewed here.
On March 31, the Internal Revenue Service (“IRS”) issued a lengthy and detailed Frequently Asked Questions addressing many of these questions, such as: how to determine the amount of the tax credit, how to claim the tax credit, and what kind of documentation is needed to support a claim for the credit. We wanted to highlight a few of the more noteworthy provisions of the FAQs that are of interest to employers covered by the FFCRA.
What Information Should an Employee Provide to Substantiate Eligibility for Leave?
The IRS indicates that an employee’s request for EPSL and/or E-FMLA Leave must be in writing and include: (1) the employee’s name; (2) the date(s) for which leave is requested; (3) a statement of the COVID-19-related reason that the employee is requesting leave and written support for such reason; and (4) a statement that the employee is unable to work (including by telework) for that reason.
If a request for EPSL is based on a quarantine order, the statement from the employee should include the name of the governmental entity ordering quarantine or the health care professional advising self-quarantine. If the person subject to quarantine or advised to self-quarantine is not the employee, the statement must include the person’s name and his/her relationship to the employee.
If a request for EPSL and/or E-FMLA Leave is based on a school closing or child care provider unavailability, the employee’s statement should include the child(ren)’s name(s) and age(s) to be cared for, the name of the school that has been closed or place of child care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving the leave. If an employee is unable to work or telework because of his/her “need to provide care for a child older than fourteen during daylight hours,” the employee’s statement must include an explanation of the “special circumstances exist” requiring him/her to provide care.
What Additional Records Should My Business Maintain to Substantiate Eligibility for the Tax Credit?
According to the IRS, in addition to the documentation that an employee should provide to substantiate his/her eligibility for EPSL and/or E-FMLA leave, the employer should create and maintain records that include the following information:
Documentation to show how the employer determined the amount of qualified EPSL and/or E-FMLA wages paid to employees that are eligible for the credit, including records of work, telework, and qualified EPSL and E-FMLA Leave.
Documentation to show how the employer determined the amount of qualified health plan expenses allocated to qualified EPSL and/or E-FMLA wages.
Copies of any completed Forms 7200, Advance of Employer Credits Due to COVID-19, that the employer submitted to the IRS.
Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS. Employers that use third-party payers to meet their employment tax obligations will need to have records of information provided to the third-party payer regarding the employer’s entitlement to the credit claimed on Form 941.
How Long Should My Business Maintain Such Records?
The IRS states that an employer should keep records of these documents for at least 4 years.
To stay updated on all key developments related to COVID-19 and its impact on the workplace, including the forthcoming FFCRA regulations from the Department of Labor, subscribe to our blog and follow us on social media. We remain committed to providing our clients and friends with timely updates and analysis on the issues that affect their workplaces. For questions about this or any other labor and employment law matter, please do not hesitate to contact the attorneys at Hoffman & Hlavac.