SourcePointe Answers Your Frequently Asked COVID-19 Questions

May 4, 2020

As people around the globe grapple with the impact of COVID-19, business owners and leaders are searching for answers in order to keep their employees protected and companies running.

Today, the SourcePointe team is answering your most frequently asked questions on how COVID-19 is transforming workplace processes and policies across the country.

1. What’s the difference between FMLA and EFMLA?

For employees who have worked for their employer at least 12 months (with minimum of 1,250 workplace hours logged) and are at a location where at least 50 team members are employed within 75 miles, typical FMLA allows these workers to take leave for reasons of personal illness or care for a loved one with an illness.

However, emergency FMLA (EFMLA) restrictions have been enacted due to COVID-19, and the rules are slightly different from the traditional program. Under EFMLA, coverage has been expanded to all employers who employ less than 500 individuals, and team members need only work for the employer for at least 30 days in order to qualify for leave. In addition, coverage has been expanded to allow parents with a child under 18 whose school or place of care is closed to take leave.

2. If one of my employees takes a leave, does my company qualify for tax credits?

Generally, yes. According to the IRS, companies that offer leave during this time are entitled to fully refundable tax credits to cover the cost of leave taken during COVID-19. Under certain circumstances, this refund is also available to self-employed individuals. Businesses or tax-exempt organizations that have fewer than 500 employees and are required under the FFCRA to pay “qualified sick leave wages” and/or “qualified family leave wages” are eligible for tax credits.

Eligible employers can begin claiming credits on their federal tax returns, or, if they’d like to begin reaping benefits more quickly, may reduce their federal employment tax deposits.

It is important to note that these credits can be used to cover leave taken beginning April 1, 2020, and ending on December 31, 2020 – so be careful to watch your calendar to ensure that your employee’s leave is within this date range.

3. What is the difference between a layoff, a furlough and a reduction in force?

As businesses are struggling with tough decisions around staffing, it’s important to understand the details surrounding all of the options available.

Furloughs involve companies asking employees to work fewer hours or take unpaid time off. Unlike a layoff, individuals are still considered to be employed by the company during a furlough period. This method is often thought to be the most democratic, as it results in fewer layoffs to certain individuals since all employees share some of the hardship.

During layoffs, employees are temporarily separated from payroll and are not considered employees of the company. However, the hope is often that conditions will change and the company will be able to call employees back to return to their positions. When in the position of a layoff, employees can apply for unemployment benefits.

A reduction in force is the most aggressive choice, and involves positions being eliminated with no intention of replacing the individual. For the employee, it means a permanent separation from the company. For the business, it means an overall reduction in staffing.

While COVID-19 has caused uncertainty and confusion in many areas of our daily lives, know that our team of experts at SourcePointe is available to answer your workplace questions – no matter how complex. To reach out to our team with questions of your own, contact us today. 

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