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Update on Implementation of Leave Requirements Related to COVID-19 Update on Implementation of Leave Requirements Related to COVID-19

Update on Implementation of Leave Requirements Related to COVID-19

Note: The Department of Labor issued a Q&A document on March 24, 2020 that states the leave provisions are effective April 1, 2010. We will watch for the regulations to confirm this effective date and provide further updates.

Late on Friday, March 21, 2020, the Department of Labor (DOL), U.S. Treasury, and IRS issued a news release ("Release") related to their plans to implement the leaves and corresponding tax credits contained in the Families First Coronavirus Response Act (Act) – i.e., the Public Health Emergency Leave and the Emergency Paid Sick Leave. The Release contains a few notable and potentially useful statements for employers.
First, the Release states that the agencies plan to include in their ultimate guidelines a 30-day non-enforcement period if the employer makes efforts to comply in good faith. According to the Release, the DOL will focus on compliance assistance during this period. This statement suggests that, so long as the employer is making its best efforts to comply, the employer will be excused from liability for technical violations of the law. 
Second, as to the tax credits available to employers who provide paid leave under the Act, the Release states that, "[e]ligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020." If this is the position taken by the agencies in their future guidance and regulations, this statement implies that any leave provided between now and the effective date – April 2, 2020 – will not count toward the leave requirements and will not be eligible for tax credits. Employers providing leave now would be denied a tax credit for the cost of such leave and will not be able to count such leave toward the requirements of the Act.
Third, the Release notes that small businesses with fewer than 50 employees will be eligible for an exemption based on simple and clear criteria and the DOL will provide emergency guidance and rulemaking to "clearly articulate this standard."
Finally, the agencies assert their guidance will be released "next week." This could be early or late in the week. We will monitor this further and provide meaningful updates as they are available.
If you have questions, please contact Tami A. Earnhart or any other member of our Labor, Employment & Immigration group. For matters related to COVID-19 outside of employment, please refer to our COVID-19 Resource Center and contact a member of our COVID-19 Task Force.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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