The onset of coronavirus has changed just about everything we all took for granted as “normal.” Employers have been forced to make critical decisions in short-order to respond to this public health crisis, all the while trying to balance supporting their employees and sustaining the viability of their businesses. At the same time, employers also have been called upon to learn and comply with brand new laws concerning virus-related leave benefits for their employees. In mid-March, Congress passed the Families First Coronavirus Response Act (FFCRA). Through 2 separate provisions, the Emergency Paid Sick Leave Act (“Paid Sick Leave Act”)[1] and Emergency Family and Medical Leave Expansion Act (“EFMLA Expansion Act”)[2], the FFCRA requires covered employers (those with fewer than 500 employees) to provide 1) paid sick leave and/or 2) expanded family and medical leave, for specified reasons related to coronavirus, with 100% reimbursement by the government via a tax credit for leave time paid out.
In the most recent development concerning the FFCRA, the United States Department of Labor issued Regulations concerning the FFCRA on April 1st. The Regulations explain in greater detail the FFCRA’s coverage and the limitations on leave benefits available, and the Regulations also clarify issues that were not fleshed out in the legislation because the FFCRA was passed so quickly.
As with any new law, employers should, with help of legal counsel, understand all aspects of the Regulations to ensure that they are complying with the FFCRA when making decisions about leave requests. In the meantime, here are some of noteworthy highlights from the DOL’s Regulations:
No Leave for Laid Off Employees. As most know at this point, employees are entitled to paid leave benefits under the FFCRA if they are unable to work because of 1 of 6 very specific COVID-19 related reasons, including that the employee is subject to a government quarantine or isolation order related to COVID-19.[3] There was some initial thought that employees let go because a business had to close in response to a Governor’s stay-at-home order would be entitled to paid leave under the FFCRA. The Regulations clarify that stay-at-home orders are indeed the type of isolation order for which an employee would receive paid leave, but only if the employee is unable to work “but for” the isolation order. The Regulations clarify that employees who are laid off or furloughed because of a downturn or business closure do not meet this test and are not entitled to paid leave, even if the closure or downturn is substantially related to an isolation order. The Regulations reason is that these employees are unable to work, not because they are subject to an isolation order but because the employer has no work for the employee. Furloughed or laid off employees in this scenario would be entitled to unemployment benefits only. This seems to be a major loop hole to the paid leave benefits provide for in the FFCRA.
Counting Employees. Both the Paid Sick Leave Act and the EFMLA Expansion Act parts of the FFCRA apply to private employers with fewer than 500 employees. The Regulations clarify that employees are counted at the time an employee would take leave for purposes of determining whether or not an employer has 500 employees. This means that an employer’s obligation to provide paid leave under the FFCRA may change over time depending on how many employees it has at the time leave will be taken. Employers who hover around the 500 employee mark will have to assess each time an employee requests leave whether they have fewer than 500 employees and therefor have to provide leave. The Regulations also clarify that employers must include full-time and part-time employees, employees on leave, temporary employees who are jointly employed by the employer and another employer, and day laborers supplied by a temporary placement agency. Independent contractors do not count towards the 500- employee threshold. Employees who have been laid off or furloughed but have not been reemployed also do NOT count toward the 500-employee threshold. This means that employers who at the time the FFCRA was passed had 500 employees, but have laid off or furloughed sufficient employees to bring them below 500 will have to provide qualifying paid leave to remaining employees.
Multi-Unit Employers. The Regulations clarify that joint or integrated employers must combine employees in determining whether or not they employ 500 employees. The FLSA’s test applies in determining who is a joint employer for purposes of coverage, and the FMLA’s test applies in determining who is an integrated employer, under both the Paid Sick Leave Act and the EFMLA Expansion Act parts of the FFCRA. This is a change from the DOL’s original position set forth in FAQ’s that the integrated employer test only applied to the paid sick leave portion of the FFCRA. All of this means that in order for an employer to determine the number of employees it has, all common employees of joint employers or all employees of integrated employers must be counted together. This means that businesses who operate multiple units under one umbrella corporation, and even businesses that operate multiple locations as separate and distinct entities, must count all employees of each of these units or entities together, if they are an integrated employer. In essence, if multi-location employers are integrated by common control, policies, pay, etc. such that they are counting all of their employees for purposes of determining if they meet the 50-employee threshold of the FMLA, then they should like count the employees of all locations to evaluate the 500 employee benchmark for the FFCRA.
Part-Time verses Full Time. The leave benefit available for employees under the FFCRA depends on whether they are a full or part- time employee. Yet the FFCRA did not define those terms. The Regulations rectify this issue. They define a full-time employee as someone who is normally scheduled to work at least 40 hours each workweek, or is scheduled to work on average 40 hours per week, in the case of an employee whose schedule varies. This weekly average is calculated over the six-months prior to the date leave is requested or over the entire period of employment if the employee has been employed for less than six months. A part-time employee is an employee who is normally scheduled to work fewer than 40 hours each workweek or—if the employee lacks a normal weekly schedule—who is scheduled to work, on average, fewer than 40 hours each workweek. The Regulations also address the amount of leave to which a part-time employee is entitled. A part-time employee working a normal schedule is entitled to paid sick leave equal to the number of hours he or she is normally scheduled over a two-workweek period. A part-time employee whose weekly work schedule varies is entitled to paid sick leave equal to 14 times the average number of hours that the employee was scheduled to work per calendar day over the six-month period ending when the employee takes paid sick leave, (including hours for of leave), or 14 times the expected number of hours the employee and employer agreed at the time of hiring that the employee would work, on average, each calendar day, if a part-time employee has been employed for fewer than six months.
Paying for Telework. Employees are entitled to paid leave under the FFCRA only if they are unable to work or telework because of the qualifying COVID-19 related reasons. Employees who are teleworking for COVID-19 related reasons must be compensated for all hours actually worked, including overtime, in accordance with the requirements of the FLSA. However, the FLSA’s continuous workday guidance which generally requires that all time between performance of the first and last principal activities is counted as compensable work time, does not apply for teleworking because of COVID-19. This means that an if an employer and employee agree to a flexible schedule, allowing telework for COVID-19 related reasons on a from 6-9 a.m., 12:00- 1 p.m., and 7-10 p.m., the employer need only pay for the 7 hours of time actually worked, not all 14 hours between the first principal activity at 7 a.m. and the last at 10 p.m. The FLSA guidance regarding the continuous workday would still apply, however, to all employees who are teleworking for reasons other than COVID-19.
Effect on other Leave. The 12 weeks of paid expanded family and medical leave provided by the EFMLA Expansion Act of the FFCRA is a type of FMLA leave. As such, the Regulations clarify that any time taken as expanded family and medical leave counts towards the total 12 workweeks of regular, unpaid FMLA leave to which the employee is entitled. This means that if an employer was covered by FMLA before the FFCRA’s April 1, 2020 effective date and an employee has taken FMLA time for some non-COVID19 related reason in the employer’s 12-month period, an employee will have fewer than 12 weeks of expanded family and medical leave available to take under the FFRA. It also means that any expanded family and medical leave taken under the FFCRA would count against the employee’s entitlement to preexisting FMLA leave. In other words, if an employee uses all 12 weeks of expanded family and medicl leave, and later in the employee’s 12-month leave period needs leave time for a different serious health condition, the employee will not be eligible for FMLA leave. If an employer has fewer than 50 employees and becomes covered under the FMLA on April 1, 2020 on pursuant to the FFCRA, this analysis does not apply. The Regulations further clarify that an employee may elect or an employer may require an employee to use, accrued leave that under the employer’s policies would be available to the employee to care for a child, such as vacation or personal leave or paid time off, concurrently with the expanded family and medical leave under the EFMLEA. The DOL explained that this allows employees to receive full pay during the period for which they have preexisting accrued vacation or personal leave or paid time off, and allows employers to require employees to take such leave and minimize employee absences.
Other Suitable Child Care Provider. The Regulations clarify that an employee may take paid sick leave to care for his or her child because school or child care is closed only when the employee needs to, and actually is, caring for the child. According to the Regulations, this generally will not be the case if another suitable individual— such as a co-parent, co-guardian, or the usual child care provider—is available to provide the care the employee’s child needs.
Small Business Exemption. The FFCRA includes an exemption for small employers (those with fewer than 50 employees) from having to provide certain paid leave “when doing so would jeopardize the viability of the small business as a going concern.” The Regulations now clarify that exemption will be met if an authorized officer of the business has determined that:
1. The provision of paid sick leave or expanded family and medical 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 paid sick leave or expanded family and medical 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 paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
Importantly, the Regulations clearly state that this exemption is ONLY AVAILABLE for paid sick leave or expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related. It is NOT available for paid sick leave available for other qualifying reasons, i.e. for paid sick leave because the employee has been advised by a health care provider to self-quarantine related to COVID-19; is experiencing COVID-19 symptoms and is seeking a medical diagnosis; or is caring for an individual subject to an order described in (1) or self-quarantine as described in (2). To elect this small business exemption, the employer must document and maintain records that support its that the 3-part exemption criteria is met. Such documentation is not sent to the DOL, but retained in a file with the employer. Regardless of whether a small employer elects to this exemption for one or more employees, the employer is still required to post this required FFCRA notice as a covered employer.
Further considerations. In addition to the above, the Regulations are chalk full of additional clarifications and details about the paid sick leave and expanded family and medical leave benefits provide for by the FFRCA. Employers are well-advised to understand all parts of the Regulations applicable to their particular situation. Otherwise employers face significant potential consequences. As noted in the Regulations, employers who fail to provide paid sick leave will be considered to have failed to pay minimum wages in violation of FLSA and will be subject to the related penalties, including multiple damages and attorney’s fees. The FMLA’s enforcement provisions apply for purposes of a failure to provide the expanded family and medical leave benefits of the FFCRA, except that an employee’s right to file a lawsuit directly against an employer does not extend to employers who were not previously covered by the FMLA. Given these consequences, employers who understand their obligations under the FFCRA may still wish to seek advice of employment counsel before deciding whether and to what extent employers will provide paid sick and/or expanded medical and family leave. Such legal guidance may help employers avoid the legal pitfalls of the FFCRA and provide a sense of clarity in these uncertain times.
[1]This part of the FFCRA generally provides for two weeks of paid sick leave to all employees, at full pay for employees out of work because the employee is him/herself dealing with COVID-19 related illness or isolation order, or at 2/3 pay when taking care of someone else dealing with COVID-19 related illness or isolation order or is caring for a son or daughter whose school or child care is closed.
[2]This separate provision of the FFCRA provides for up to twelve weeks of expanded family and medical leave, up to ten weeks of which must be paid at partial pay, up to a specified cap, when an eligible employee is unable to work because of a need to care for the employee’s son or daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.
[3] The other 5 qualifying reasons for FFCRA leave are that the employee: (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; (4) is caring for an individual who is subject to an order as described in (1), or who has been advised as described in (2); (5) is caring for his or her son or daughter whose school or place of care has been closed or whose child care provider is unavailable due to COVID-19 related reasons; or (6) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services