Additional guidance released on emergency sick and family leave related to COVID-19

    office windows with a view

    The Families First Coronavirus Response Act (the Act) temporarily expanded the Family and Medical Leave Act of 1993 (FMLA) and created new paid sick leave requirements to offer relief to Americans affected by the COVID-19 coronavirus outbreak. 

    On April 1, the U.S. Department of Labor (DOL) issued temporary regulations (Regulations) to provide employers with additional guidance on the requirements, clarifications of some rules, and subtle changes to others.

    See our previous article for an in-depth look at the Act’s requirements and guidelines for these new paid sick leave and family leave requirements  (“sick leave” and “family leave”; collectively “emergency leave”), and read on for highlights of the latest changes and clarifications.

    New DOL Regulations

    In the order of their appearance, the changes from the existing Act provisions and additional requirements under the Regulations are as follows:

    Child care providers: For emergency leave requirements triggered by the unavailability of a child care provider, under the Act the child care provider is required to be a professional. The Regulations eliminate this requirement and extend the standard to uncompensated and unlicensed child care providers who are family members or friends who regularly care for the child.

    Children: For emergency leave requirements triggered by the need to care for a child, under the Act the child must be under age 18 and whose school is closed or child care is unavailable due to COVID-19. The Regulations expand this to include a child of any age who is unable to self-care due to a physical or mental disability.

    Clarification of effect on leave requirements of the employer not having work for the employee: Under the Regulations, where the employer does not have work for an employee, the employee is not entitled to a paid sick leave where the employee is “unable to work” because the employee is:

    • Subject to a federal, state, or local quarantine or isolation order related to COVID-19;
    • Caring for an individual subject to a quarantine or isolation order or who has been advised by a health care provider to self-quarantine because of COVID-19;

    In addition, where the employer does not have work for the employee, the employee is not entitled to sick leave or family leave if the employee is “unable to work” because the employee is caring for a child younger than age 18 whose school or place of care is closed or whose child care provider is unavailable due to COVID-19 precautions, or because the employee is caring for a child incapable of self-care due to a physical or mental disability.

    Definitions for purposes of permissible employer exclusion of employees who are “health care providers” or “emergency responders” from emergency leave requirements: Under the Act, an employer of a “health care provider” or an “emergency responder” can elect to exclude that employee from eligibility for emergency leave. The Act did not provide definitions for these terms. The Regulations have now provided these definitions

    Health care provider: Anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, pharmacy, or any facility that performs laboratory or medical testing, or any individual employed by an entity that contracts with any of these institutions to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility.

    Emergency responder: Anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of such patients, or others needed for the response to COVID-19, including but not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, child welfare workers and service providers, and persons with skills or training in operating specialized equipment to provide aid in a declared emergency.

    Employer Aggregation: The “employers with fewer than 500/50/25 employees” tests for purposes of the emergency leave requirements under the Act is a very critical aspect for employers doing business through related affiliates. In this regard, the Regulations specify that for purposes of counting an “employer’s” employees, the employees of an employer’s affiliates are to be aggregated, using the DOL’s “integrated employer” standard developed under the FMLA. The DOL’s “integrated employer standard” does not provide a bright-line test, but rather is facts- and circumstances-based. The analysis is not to be determined on the basis of any single criterion, but rather on the entire relationship “in its totality.” The factors to be considered under the “integrated employer” analysis are:

    •  Common management;
    •  Interrelationship between operations;
    •  Centralized control of labor relations; and
    •  Degree of common ownership or financial control.

    Available exemption from emergency paid leave requirements for employers with fewer than 50 employees: Under the Regulations, an employer with fewer than 50 employees is exempt from providing sick leave or family leave on account of the need to care for a son or daughter under 18 whose school or place of care is closed or child care provider is unavailable, or of any age who is incapable of self-care on account of a disability, in any case due to COVID-19 precautions, where providing the leave “would jeopardize the viability of the business as a going concern.” To utilize this exemption, the Regulations require that an authorized officer of the business determine and the employer retain for four years (not send to the DOL) documentation that:

    • The requested leave would result in the business’s expenses and financial obligations exceeding available business revenues and would cause the business “to cease operating at a minimal capacity”;
    • The absence of the employee(s) requesting the leave would entail a substantial risk to the financial health or operational capabilities of the business on account of the “specialized skills, knowledge of the business, or responsibilities” of the requesting employee(s); or
    • There are not sufficient workers who are able, willing, qualified, and available at the time and place needed to perform the labor and services provided by the requesting employee(s). (The employer must also document that such services are needed for the business to operate at a minimal capacity.)

    Employee documentation and employer recordkeeping requirements: The Regulations provide detailed requirements for purposes of emergency leave purposes under the Act. An employer is required to retain certain emergency leave-related documentation for four years, regardless of whether the leave was granted or denied. (Also, if an employee provided oral statements to support his or her leave request, the employer must document and maintain that information for four years). An employee must provide the employer with documentation containing the following information prior to taking an emergency leave:

    • Employee’s name; 
    • Date(s) for which the leave is requested; 
    • Qualifying reason for the leave; and 
    • Oral or written statement that the employee is unable to work because of the reason for the leave.

    To take sick leave because the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19, the employee must provide the name of that health care provider. To take a sick leave because the employee is caring for someone experiencing symptoms of COVID-19, the employee must provide either the name of the government entity that issued the quarantine or isolation order to which the individual being cared for is subject, or the name of the health care provider who advised the individual to self-quarantine. To take either type of leave to care for the employee’s child under age 18 because the child’s school is closed or whose place of care or caretaker is unavailable, or to care for a child of any age who is unable to self-care due to a physical or mental disability, the employee must also provide:

    • The child’s name;
    • The name of the school, place of care, or child care provider; and
    • A representation that “no other suitable person” will be caring for the employee’s child during the period of the employee’s leave.

    Requirement to maintain health coverage during emergency leave period: The Regulations specify that while an employee is taking emergency leave, the employer must maintain the employee’s coverage under the employer’s group health plan “on the same conditions as coverage would have been provided if the employee had been continuously employed during the entire leave period.”

    Job restoration: Under the Regulations, upon return to work from emergency leave, an employee has the right to be restored to “the same or an equivalent position.” An exception applies where an employment action occurred that would have affected the employee regardless of the leave, such as a layoff, in which case the employer must be able to show that the employee would not otherwise have been employed at the time reinstatement is requested. 

    However, an employer may deny job restoration to key “eligible employees” returning from family leave if the denial is “necessary to prevent substantial and grievous economic injury to the operations of the employer.” For this purpose, an “eligible employee” is defined as an employee “who is among the highest-paid 10% of all the employees employed by the employer within 75 miles of the employee’s worksite.” 

    In addition, an employer with fewer than 25 “eligible employees” can deny job restoration to one who has taken a family leave if all of the following conditions exist:

    • The employee took leave to care for the employee’s child whose school or care location was closed, or whose child care provider was unavailable, for COVID-19 related reasons;
    • The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in the employer’s operating conditions that affect employment and are caused by a public health emergency during the leave period; 
    • The employer makes “reasonable efforts” to restore the employee to a position equivalent to the one held when the leave commenced, with equivalent employment benefits, pay, and “other terms and conditions of employment”; and 
    • Where those reasonable efforts fail, the employer makes reasonable efforts to contact the employee during a one-year period if an equivalent position becomes available. The one-year period begins on the earlier of the date the leave concludes or the date 12 weeks after the leave began. 

    Employer records retention requirements for purposes of federal payroll tax credits: The Regulations provide that to claim the Act’s emergency leave federal payroll tax credits, the employer should maintain the following records for four years: 

    • Documentation to show how the employer determined the amount of emergency leave paid to employees that are eligible for the credit, including records of work, telework and the leaves; 
    • Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages; 
    • Copies of any completed IRS Forms 7200 that the employer submitted to the IRS; 
    • Copies of the completed IRS Forms 941 that the employer submitted to the IRS or, for employers that use third-party payers to meet their employment tax obligations, records of information provided to the payer regarding the employer’s entitlement to the credit claimed on Form 941; and 
    • Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit.

    What does CohnReznick think? 

    The Regulations provide important guidance for employers looking to avail themselves of various exceptions, exemptions, and credits under the Act. However, they impose significant documentation and recordkeeping requirements. Further, rather than providing a helpful “bright-line” approach to the employer aggregation requirements, in the Regulations the DOL has specifically continued the applicability of its subjective “integrated employer” analysis, which will likely result in confusion and potential problems for employers with numerous affiliates. We will continue to monitor for further guidance under the Act.


    Dana Fried, JD, LLM, Managing Director, National Tax Services


    Subject matter expertise

    • dana fried
      Contact Dana Dana+Fried
      Dana Fried

      JD, LLM, Managing Director - National Tax Services

    • Close


      Let’s start a conversation about your company’s strategic goals and vision for the future.

      Please fill all required fields*

      Please verify your information and check to see if all require fields have been filled in.

      Please select job function
      Please select job level
      Please select country
      Please select state
      Please select industry
      Please select topic
    tax cares webinar

    On-Demand Webinar: The CARES Act – A Practical Perspective & What You Need to Know Now


    Coronavirus Resource Center

    Related services

    Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.