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Tuesday, June 02, 2020
You are here : About SSA  >  SSA News

21

Expanded Leave Law to Affect Self Storage Operators

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Expanded Leave Law to Affect Self Storage Operators

In mid-March, Congress passed and the President signed legislation to provide many employees with expanded paid family and medical leave in response to the COVID-19 pandemic. The Families First Coronavirus Response Act (the “Act”) will take effect on April 1, 2020. The Act will have a significant effect on self storage businesses and their employees. Read on to learn how the Act will affect you.

You can find a full set of FAQs from the Department of Labor here.

 

Which Employers Are Required To Comply?

The Act applies only to employers with fewer than full-time and part-time 500 employees in the United States. Businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern. See below for more details.

 

Does the Act Permanently Change the Family and Medical Leave Act?

No, the Act does not permanently change the federal Family and Medical Leave Act (FMLA). The Act’s expanded leave provisions apply only until December 31, 2020 and only if the employee requests leave for the reasons set forth below.

 

Which Small Businesses May Claim an Exemption From the Leave Requirements?

A small business is exempt from certain leave requirements only if the:

  • employer employs fewer than 50 employees;
  • leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
  • an authorized officer of the business has determined that at least one of the three conditions described below is satisfied:
  1. Providing this leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;  
  2. The absence of the employee or employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting leave, and these labor or services are needed for the small business to operate at a minimal capacity.

 

How Does a Small Business Claim the Exemption?

The Department of Labor has stated that “[t]o elect this small business exemption, the Employer must document that a determination has been made pursuant to the criteria set forth by the Department in § 826.40(b)(1) (the criteria above). The Employer should not send such documentation to the Department, but rather retain the records in its files.”

 

Which Employees Qualify for Leave?

Generally speaking, all employees, whether full-time or part-time and regardless of tenure, qualify for leave if they meet the criteria discussed below. An employee is eligible for additional leave to care for a child whose school or place of care is closed only if the employee has been employed a minimum of 30 days.

 

Must an Employee Provide Notice Before Taking Leave?

No. Where leave is foreseeable, an employee should provide notice of leave to the employer as is practicable. After the first workday of paid sick time, an employer may require employees to follow reasonable notice procedures in order to continue receiving paid sick time.

 

What Are the Reasons and Duration for Leave? What is the Required Rate of Pay?

Under the Act, an employee qualifies for expanded family and medical leave if the employee is unable to work (or unable to telework) for the following reasons. The amount of compensation and duration of leave differ depending on the reason for leave so employers are encouraged to review the requirements closely.

Reason 1: The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;

Duration: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

Rate of Pay: Either the employee’s regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).

Reason 2: The employee has been advised by a health care provider to self-quarantine related to COVID-19.

Duration: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

Rate of Pay: Either the employee’s regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).

Reason 3: The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis.

Duration: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

Rate of Pay: Either the employee’s regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).

Reason 4: The employee is caring for an individual subject to an order described in (1) or self-quarantine as described in (2).

Duration: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

Rate of Pay: 2/3 of the employee’s regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).

Reason 5: The employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.

Duration: A full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

Rate of Pay: 2/3 of the employee’s regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave. The ten weeks is available only if the employee has been employed for 30 days.).

Reason 6: The employee is experiencing any other substantially-similar condition specified by the certain Cabinet officials.

Duration: A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

Rate of Pay: 2/3 of the employee’s regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).

 

How Does an Employer Notify Its Employees of the Act?

Employers must post a notice about leave entitlements in a conspicuous location within the job site. The notice can be found here. An employer may satisfy the notice requirement by emailing or direct mailing the notice to employees, or posting the notice on an employee information internal or external website.

 

What Tax Credits Are Available to Employers That Make Qualifying Leave Payments?

Employers that who make qualifying leave payments may retain an amount of the payroll taxes equal to the amount of qualified leave wages that they paid, rather than deposit those taxes with the IRS. These tax credits are increased by the qualified health plan expenses allocable to, and the employer’s share of Medicare tax on, the qualified leave wages.  

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

 

What If Taxes Retained by the Employer Are Less Than the Qualifying Leave Payments?

The employer may request an advance by completing Form 7200, Advance Payment of Employer Credits Due to COVID-19. The employer will account for the amounts received as an advance when it files its Form 941, Employer’s Quarterly Federal Tax Return, for the relevant quarter.

A full set of FAQs from the IRS, including information on the records that the employer must retain and the forms that the employer must complete, is available here.

 

What Job Protection Does an Employee Have If Leave Is Taken?

Employers may not discharge, discipline, or otherwise discriminate against any employee who takes leaves under the Act or who files a complaint or proceeding pursuant to the Act. The extended leave available to care for a child is job protected; however, employers with fewer than 25 employees are exempt if the employee’s position is eliminated because of economic slowdowns related to the declaration of a public health emergency and the employer attempts to restore the employee’s employment within a year.

Please email Joe Doherty with any questions.

 

 

 

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