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On March 25, 2020 the Department of Labor (DOL) issued compliance assistance materials for employers and employees clarifying, among other things, that paid leave benefits under the Families First Coronavirus Response Act (FFCRA) should be provided beginning April 1, 2020. Since then, the DOL updated its compliance assistance. Key issues clarified in the DOL’s updated compliance materials are the small business exemption, the amount of paid leave benefits to be provided, whether employees subject to worksite closures and lay-offs are entitled to paid leave under the FFCRA, the extent the paid leave benefits may be used intermittently, records to be collected by employers verifying the need for the paid leave, and group health insurance continuation obligations. The most notable clarifications are summarized below.
The DOL has clarified that employees are ineligible for Paid Sick Leave or Expanded FMLA Leave under the FFCRA if their employer closes their worksite or tells the employees that it no longer has work for them. [1] This is true even if an employee requested FFCRA leave prior to April 1, 2020, and/or if the employer intends to re-open.
If an employee begins to receive Paid Leave under the FFCRA and the employer closes the worksite after April 1, 2020, the employee remains entitled to Paid Leave time used prior to the employer’s closure. However, the entitlement to Paid Leave benefits ceases as the date of the employer’s closure. These rules apply regardless of whether the employer closes due to lack of business or pursuant to a federal, state, or local directive.
If an employer reduces employees’ hours due to lack of work, the employees will not be entitled to paid leave for the hours they are no longer scheduled to work, but may use FFCRA benefits if they need to take time off for a qualifying reason under their reduced schedule.
Employees who stopped working prior to April 1, 2020, due to COVID-19 reasons who stop working, or whose hours are reduced after April 1, 2020, due to a worksite closure or lack of work, will not be entitled to Paid Leave under the FFCRA. Rather, they may be entitled to receive unemployment benefits depending upon the particular state law where the employee works.
The DOL has clarified that employees may take up to a total of 80 hours of Paid Sick Leave under the FFCRA for any combination of qualifying reasons. [2] Employees who meet multiple qualifying reasons may not exceed the 80 total hours allotted, except for employees who are taking leave to care for a child whose school or childcare is unavailable due to COVID-19 reasons, in which case the employee may take a total of 12 weeks (480 hours) of paid leave by combining Paid Sick Leave with Expanded FMLA leave.
The DOL has confirmed that the FFCRA is not retroactive. Thus, paid sick leave provided before FFCRA’s April 1, 2020 start date does not count towards satisfying the obligations under FFCRA regardless of whether the previously provided leave was granted for one of FFCRA’s qualifying reasons.
Part-time [3] employees and full-time employees with varying schedules are entitled to receive Paid Leave benefits (up to the caps set by FFCRA) in amounts equivalent to the average number of hours they work over a two-week period.
If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, the six-month average may be used to calculate the amount of Paid Leave benefits due. If this calculation cannot be made (because the employee has not been employed for at least six months), employers should use the number of hours that were agreed upon at hire. If no such agreement existed, the employer may calculate the appropriate number of hours of leave based on the average daily hours the employee was scheduled to work during their entire term of employment.
Overtime hours that an employee would normally be scheduled to work should be included in the calculus when determining the amount of Paid Leave an employee is entitled to receive. Given that the Paid Sick Leave portion of the law caps out at 80 hours, overtime hours will not come into play very often when considering how much Paid Sick Leave is due to an employee but may impact how much is due an employee receiving Paid Leave under the Expanded FMLA Leave provided for under the FFCRA.
While overtime is important to consider when determining the number of work hours an employee should receive Paid Leave benefits, employers do not have to pay premiums for overtime hours under either the Paid Sick Leave or Expanded FMLA Leave.
An employee who has previously exhausted their entitlement to FMLA leave will still be entitled to take up to 80 hours of Paid Sick Leave under the FFCRA.
However, an employee’s prior use of FMLA leave during the applicable 12-month period prior to April 1, 2020, may impact their ability to take Expanded FMLA Leave. Employees may only take Expanded FMLA Leave if they have not previously utilized 12 workweeks of regular FMLA leave during the 12-month period previously designated by their employer.
Under the FMLA, employers are required to continue group health benefits for employees on FMLA leave under the same conditions as if they were working their regularly scheduled hours. The DOL has confirmed that the same is true for employees taking Expanded FMLA Leave under the FFCRA. Employers can require that employees continue to make their normal contributions to the cost of their group health benefits.
Group health insurance benefits must also be continued for employees who are taking Paid Sick Leave under the FFCRA. Additionally, the fact that an employee is on Paid Sick Leave cannot delay the waiting period for coverage under an employer’s health plan. If an employee is absent from work on Paid Sick Leave during the waiting period, the health coverage must take effect on the same day it would otherwise be effective.
While the FMLA allows for unpaid intermittent job-protected leave for qualifying reasons, it was not initially clear if employers could allow employees to take intermittent paid leave under the FFCRA and still make use of the employer tax credit. The DOL has now clarified that employees who take Expanded FMLA leave where their child’s school or childcare is unavailable for COVID-19 reasons, the employees may take that leave on an intermittent basis, provided their employer agrees to such an arrangement. The leave can be taken in any increment mutually agreed upon by the employer and employee.
Paid Sick Leave benefits may also be taken intermittently in circumstances where the employee is teleworking [4] and/or caring for a son or daughter [5] whose school or childcare is unavailable due to the public health crisis, provided the employer and employee both agree to the intermittent leave. In all other circumstances — that is, where employees are still reporting to their regular worksite and not needing to reduce their schedules to care for a child whose school/childcare is unavailable — the Paid Sick Leave benefits must be taken in full-day increments.
However, employees do not need to exhaust the full amount of their Paid Sick Leave benefits within a two week (80-hour period). If the qualifying reason for taking paid sick leave ends but the employee has not exhausted Paid Sick Leave, the employee can use the remaining Paid Sick Leave through December 31, 2020, if another qualifying reason occurs.
The DOL has clarified that an employer may choose to pay employees in excess of the FFCRA requirements, but if they do, the employer cannot claim and will not receive tax credits for any amounts paid to employees in excess of the FFCRA’s statutory requirements.
An employer cannot, however, require that employees use existing paid leave benefits (such as state-mandated paid sick leave or paid vacation benefits) to supplement the amount the employee receives while on Paid Leave under the FFCRA. If, however, the employee requests to use pre-existing paid leave benefits to supplement their pay while on FFCRA leave, the employer may choose to allow the employee to do so. Again, any amount paid to employees on FFCRA leave in excess of the amounts required cannot be claimed for a tax credit under the law.
The DOL has clarified that employers must request and maintain records of employees taking paid leave under the FFCRA. For employees taking paid sick leave under the Emergency Paid Sick Leave Act, employers must request that employees provide documentation that includes the following information: the employee’s name; qualifying reason for requesting leave; statement the employee is unable to work or telework for that reason; and the date(s) the leave is requested. Employers must also require employees to provide documentation supporting the reason for the leave, such as the source of any quarantine or isolation order or the name of the health care provider who advised the employee to self-quarantine.
For employees taking leave under the Expanded FMLA to care for a child whose school is closed or childcare provider is unavailable due to COVID-19, employers must request documentation supporting the leave request. Examples of this documentation include a notice that has been posted on a government, school, or daycare website, a notice published in a newspaper, or notice provided via email. This requirement applies when the first two weeks of unpaid leave run concurrently with paid sick leave taken for the same reason.
Employers should retain this documentation regardless of whether they intend to file a claim for the tax credit under the FFCRA.
Employers part of a multiemployer collective bargaining agreement may satisfy their obligations under the Expanded Family and Medical Leave Act and Emergency Paid Sick Leave Act by making contributions to a multiemployer fund, plan, or another program in accordance with their existing collective barraging obligations. These contributions must be based on the amount of paid leave to which the employee(s) are entitled under the Acts based on each employee(s) work under the multiemployer collective bargaining agreement. However, employers may elect to satisfy their obligations under these Acts by other means so long as they are consistent with their bargaining obligations and collective bargaining agreement.
The DOL has articulated the criteria for small employers (those with less than 50 employees) to claim an exemption from the Expanded FMLA Leave and Emergency Paid Sick Leave Act. Notably, the DOL’s small business exemption applies only to leave related to school closures and childcare unavailability. It does not apply to other types of paid sick leave under the Act.
Specifically, the DOL has stated that the exemption to the obligation to pay Paid Sick Leave or Expanded FMLA leave applies if providing an employee these benefits would jeopardize the viability of the business. To claim this exemption, an authorized officer of the business must have determined that:
The DOL encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.
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We expect that the DOL will be issuing more guidance in the near future, including implementing regulations, and will provide further updates as information becomes available.
If you have questions or concerns related to the COVID-19 crisis and your workforce or any other employment matter, we are here to help. Please reach out to the Rogers Joseph O’Donnell attorney with whom you regularly work or the authors of this legal update.
[1] This is the case even if the employee requested leave prior to the worksite closure.
[2] Qualifying reasons for Paid Sick Leave are where the employee: (1) is subject to a federal, state, or local quarantine order related to COVID-19; (2) is advised by a healthcare provider to self-quarantine due to COVID-19 concerns; (3) is caring for an individual who is either subject to a federal, state, or local quarantine order related to COVID-19, or advised by a healthcare provider to self-quarantine due to COVID-19 concerns; (4) is caring for the employee’s son or daughter if the child’s school or childcare provider is unavailable due to public health emergency; or (5) is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
[3] A part-time employee is an employee who is normally scheduled to work less than 40 hours per week; a full-time employee is an employee who is normally scheduled to work 40 or more hours per week.
[4] The DOL has defined telework as work performed by an employee at home or at a location other than the employee’s normal workplace. Time spent teleworking cannot be compensated under the paid leave provisions of the FFCRA.
[5] The DOL has clarified “son” or “daughter” to include the employee’s biological, adopted, or foster child, your stepchild, a legal ward, or a child for whom you are standing in loco parentis—someone with day-to-day responsibilities to care for or financially support a child—and also an adult son or daughter (i.e., one who is 18 years of age or older), who (1) has a mental or physical disability, and (2) is incapable of self-care because of that disability.
