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CARES Act – Includes Modifications and Clarifications to Paid Leave Requirements

Natalie Tocco

March 31, 2020

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), commonly referred to as the Phase 3 stimulus package, included modifications and clarifications to paid leave requirements that were enacted under the phase 2 stimulus package, the Families First Coronavirus Response Act (FFCRA). 

Limitation on Paid Leave

The CARES Act clarified that employers who are required to provide paid leave are not required to pay more than the thresholds as determined in the FFCRA per employee for emergency paid sick leave and emergency family and medical leave expansion.

Authority to Exclude Certain Employees

The Director of the Office of Management and Budget can exclude Executive Branch employees as covered employees for paid leave requirements under FFCRA.

Paid Leave for Rehired Employees Under the Emergency Family and Medical Leave Expansion Act

The definition of an eligible employee was expanded to include any employee who was laid off by the employer on or after March 1, 2020 and was rehired, if the employee was employed for 30 of the last 60 calendar days prior to the layoff.

Advance Refunding of Payroll Credits

The payroll credit for required emergency paid sick leave or emergency family and medical leave may be advanced to an eligible employer.  The CARES Act calls for further regulations and guidance to facilitate any advanced credit.  Form 7200 was issued in draft form on Tuesday to file for advance payment of employer credits.  In addition, the penalty for an employer failing to make a timely deposit of payroll taxes will be waived if the employer didn’t make the deposit in anticipation of payroll credits for required paid leave.

Expansion of DOL Questions & Answers for paid leave requirements under FFCRA

The Department of Labor (DOL) has expanded their Q&A to clarify FFCRA requirements for emergency paid sick leave and emergency family and medical leave expansion.  The Q&A is in lieu of regulations and can be relied on for guidance.  Clarifications include exemption of health care providers and emergency responders as covered employees and further guidance on small businesses who may be exempt from paid leave requirements.  More information can be found here.

To review other provisions from the CARES Act, click here.

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