iOn March 24, 2020 the U.S. Department of Labor (DOL) published additional guidance related to the Families First Coronavirus Response Act (the Act). The new guidance and accompanying FAQ included information that the Act's effective date will be Wednesday, April 1, 2020. Under the Act, the DOL was required to set an effective date no later than 15 days following the date of enactment, which occurred on March 18.
A 30-day non-enforcement period to enable employers to comply with the Act was announced by the DOL, Treasury Department and the IRS on March 20. During this time, employers must continue to act reasonably and in good faith to comply with the Act. Conflicting materials issued by the DOL have made it unclear whether the DOL's 30-day period of non-enforcement will begin on April 1 or start on March 18.
Another section of the new guidance appears to conflict with the March 20 joint announcement stating that employers could immediately begin taking advantage of the tax credits under the Act. The U.S. DOL FAQ states that paid sick time provided before April 1 for a qualifying purpose does not count against the employee's leave entitlement under the Act. The position of the IRS regarding the status of tax credits it had previously announced were immediately available on March 20 is unknown. Varnum has reached out to agency contacts in an effort to clarify the confusion created by conflicting documents and will continue to update as more information becomes available.
The new guidance also addresses how to count employees toward the Act's 500-employee threshold. The leave provisions of the Act only apply to private employers with fewer than 500 employees, and the guidance clarifies that temporary employees, employees on leave and employees of joint or integrated employers should be counted toward the 500-employee threshold. Please contact any member of Varnum's labor and employment team with questions about how these rules apply to your specific situation.
On March 25, the DOL also made available a poster that will fulfill the Act's notice requirement. A notice for federal employees is also available. Each covered employer must post a notice of the Families First Coronavirus Response Act requirements in a conspicuous place on its premises. An employer may also satisfy this requirement by mailing the notice to employees or posting the notice on the employer's internal or external website. The notice only needs to be given to current employees and does not need to be shared with recently laid-off individuals.
More guidance from the DOL is anticipated in the coming days, and the DOL will be developing more formal regulations that address these and other questions.
