Updates on Furloughed Employees and Closed Worksites – Disaster Relief Payments to Employees – Benefits of Section 139
The FAQ guidance makes it clear that employees who are furloughed are not active employees and, thus, are not eligible to receive Emergency Paid Sick Leave (EPSL) or Emergency Family Medical Leave (EFML) benefits. They are only eligible for unemployment insurance benefits. This is true regardless of when the furlough occurs or if the furlough results from the employer not having enough work or business, the worksite is closed for lack of business or because the worksite was required to close via a government directive.
The FAQ guidance concludes that the employee is NOT eligible to receive EPSL or EFML under the following circumstances:
- Employer closes the worksite before April 1, 2020
- Employer closes the worksite on or after April 1, 2020 but before the employee takes EPSL or EFML leave.
- Employer remains open but furloughs the employee on or after April 1, 2020.
- Employer closes the worksite on or after April 1, 2020 but informs employees the closure is for a short period of time and the employer will reopen sometime in the future.
Note: if the worksite is closed while the employee is already receiving EPSL or EFML benefits the worksite closure stops employee entitlement to EPSL or EFML as of the closure date. The employer must pay for any leave used before the employer closed. The employee should seek unemployment benefits post-closure.
Employees may not collect unemployment insurance benefits and EPSL or EFML at the same time.
Reduction in Employee’s Scheduled Work Hours:
If work hours are reduced for lack of work available, employees are not eligible to receive EPSL or EFML for the hours they are no longer scheduled to work even though the reduction in hours was somehow related to COVID-19.
Specific Question and Response:
If my employer closes my worksite on or after April 1, 2020 (the effective date of the Family First Coronavirus Response Act (FFCRA)), but tells me that it will reopen at some time in the future, can I receive paid sick leave or expanded family and medical leave?
No, not while your worksite is closed. If your employer closes your worksite, even for a short period of time, you are not entitled to take paid sick leave or expanded family and medical leave. However, you may be eligible for unemployment insurance benefits. This is true whether your employer closes your worksite for lack of business or because it was required to close pursuant to a Federal, State, or local directive. You should contact your State workforce agency or State unemployment insurance office for specific questions about your eligibility. If your employer reopens and you resume work, you would then be eligible for paid sick leave or expanded family and medical leave as warranted.
With respect to employees holding H-1B visas:
- Employers are still required to pay the employees full pay
- If their employment ends, the H-1B worker is eligible for a one-time single grace period up to 60 days
For additional information please follow the link below for the DOL FAQ Page:
Disaster Relief Payments to Employees –
Benefits of Section 139
Although the IRS has not issued specific guidance regarding tax-free expense reimbursement, relating to the national pandemic, Section 139, provides that “qualified disaster relief payments” made by an employer to an employee are excluded from gross income and are not subject to any federal payroll taxes.
There are numerous categories of COVID-19 related expenses which, the underlying purpose of Section 139 seems to suggest, could be labeled as “qualified expenses”, including, out of pocket medical and funeral expenses (related to COVID-19) and Increased costs incurred due to childcare, utility and food expenses due to quarantine and work-from-home related costs.
Additional Employee Benefit Based on the CARES Act:
Employers can pay for student loan debt (up to $5,250) and have it not be taxable income to employees (although the loans are not required to be paid at the moment)
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