March 1, 2020
DOL Issues Families First Coronavirus Response Act Guidance
March 26, 2020 – Earlier this week, the U.S. Department of Labor (“DOL”) issued new guidance regarding the paid leave provisions of the Families First Coronavirus Response Act (“FFCRA”) that the president signed into law on March 18, 2020. The paid leave provisions of the FFCRA include the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) and the Emergency Paid Sick Leave Act (“EPSLA”). For more information, see Ulmer’s client alert and webinar for a detailed summary of the EFMLEA and EPSLA.
The DOL’s new guidance includes the following documents:
Importantly, this new guidance does not take the place of the regulations that the DOL is expected to publish in the near future. Here is a summary of the new guidance:
- The EFMLEA and EPSLA become effective April 1, not April 2. The FFCRA was enacted on March 18, 2020. Both the EFMLEA and EPSLA contain provisions making those laws effective 15 days after enactment, which would be April 2. It is unclear why the DOL is making the effective date April 1 instead of April 2. Although the DOL may change the effective date from April 1 to April 2 in the regulations, we recommend planning for an April 1 effective date based on this new guidance.
- The EFMLEA and EPSLA apply to leave taken between April 1, 2020 and December 31, 2020. Thus, the paid leave provisions of the FFCRA do not apply to leave taken prior to April 1.
- Part-time employees are included for purposes of determining the 500-employee threshold. A covered employer employs fewer than 500 employees. An employer has fewer than 500 employees “if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, the District of Columbia, or any Territory or Possession of the United States.”
- Full-time and part-time employees include: employees on leave, temporary employees who are jointly employed by two employers, and day laborers supplied by a temporary agency.
- Full-time and part-time employees do not include: independent contractors and employees outside of the United States or any territory or possession of the United States.
- Joint and integrated employers. The Fair Labor Standards Act’s Joint Employer test and the Family and Medical Leave Act’s Integrated Employer test may apply with respect to determining the 500-employee threshold. Some factors that may be considered when deciding whether multiple entities can be combined to reach the 500-employee threshold are: (1) whether the entities operate under common management; (2) the degree of interaction between operations; (3) whether there is centralized control of human resources functions including company policies, training, hiring and firing, and performance management; and (4) the degree of common ownership between entities. We recommend that employers carefully consider the ramifications of declaring their business a joint or integrated employer for purposes of avoiding the paid leave requirements of the EFMLEA and EPSLA.
- Employers with fewer than 50 employees. Employers that want to elect the small business exemption “should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.” Do not send documents to the DOL when seeking a small business exemption. Presumably, the DOL’s forthcoming regulations will establish the procedures for applying for a small business exemption.
- Part-time employees’ hours worked calculation. For purposes of paid sick leave under the EPSLA, employers should calculate part-time employees’ hours of leave based on the number of hours the employee is normally scheduled to work. If the number is unknown, employers can use a six-month average to calculate the average daily hours. Part-time employees may take paid sick leave for this number of hours per day for up to a two-week period (not to exceed 80 hours). Part-time employees may take EFMLEA leave for the same number of hours per day up to 10 weeks after that (assuming that the part-time employee cannot telework and that he or she is on leave for child care purposes).
- Calculating pay due under the EFMLEA and EPSLA. Overtime hours are included when calculating pay due to employees who are on EFMLEA leave. Overtime hours may be included in calculating pay due to employees on EPSLA leave but the total number of hours paid is capped at 80. Pay under the EFMLEA and EPSLA does not include a premium for overtime hours. The Q&A also addresses overtime pay when an employee’s schedule varies from week to week, and caps on daily and aggregate pay for EFMLEA and EPSLA leave.
- Substituting accrued leave under an employer policy. Employees may substitute any accrued vacation leave, personal leave, or medical or sick leave under an employer policy for the first 10 unpaid days under the EFMLEA. However, the employer may not require the employee to do so.
- Regular rate of pay for paid leave. The regular rate of pay used to calculate paid leave under the EFMLEA and EPSLA is the average of the regular rate, as defined by the Fair Labor Standards Act, over a period of up to six months prior to the day on which leave is taken. For employees who have not worked for an employer for six months, the regular rate used to calculate paid leave is the average of the employee’s regular rate of pay for each week worked for the current employer. Commissions, tips, and piece rate wages are incorporated into the above calculation.
- The paid sick leave cap. Employees are only entitled to a maximum of 10 days of paid sick leave under the EPSLA. Employees who exhaust this 10-day allotment are not entitled to additional paid sick leave under the EPSLA even if they experience another qualifying event in the future. Similarly, employees who are eligible for an additional 10 weeks of paid leave under the EFMLEA are not entitled to any additional EFMLEA leave after the 10 weeks is exhausted, regardless of whether the employees experience another EFMLEA-qualifying event.
- Employment for 30 calendar days defined. An employee has been employed for at least 30 calendar days if the employee has been on the employer’s payroll for the 30 calendar days immediately prior to the day the employee’s leave would begin (e.g., an employee would need to have been on the employer’s payroll as of March 2, 2020, for leave beginning on April 1, 2020). If a temporary employee is hired as a full-time employee, days worked as a part-time employee count toward the 30-calendar day eligibility period.
While the Q&A answers some important questions, there are still many questions left unanswered, including whether the DOL will define “emergency responder,” expand the Family and Medical Leave Act’s definition of “health care provider,” and exclude specific health care employers and their staffs (i.e., long-term care and skilled nursing facilities) from coverage under the FFCRA.
Employee Rights Poster and Frequently Asked Questions Regarding Notice Requirements
- All employers with fewer than 500 employees must post a notice (i.e., the poster) in a conspicuous place on its premises where employees can see it, including any worksite locations or stand-alone facilities if employees do not report to a central location. The poster does not have to be posted in every break room if all employees visit one break room.
- The notice posting requirement may be met by emailing or direct mailing the poster to employees or posting it on an employee information internal or external website.
- The notice is not required to be posted in multiple languages, but the DOL is working to translate the poster into other languages. The DOL’s implementing regulations may address notice posting requirements for other languages.
- The poster only applies to current employees and does not have to be shared with recently laid-off employees or prospective employees (i.e., job applicants). Employers, however, must provide the poster to new hires.
- Any new or updated notices will be issued via the DOL Wage and Hour Division’s website. Employers should check this website on a regular basis for updates regarding compliance with the FFCRA, including notice requirements.
We recommend that employers air on the side of caution by posting the notice in as many locations as necessary to ensure that the notice is easily visible to all employees.
Field Assistance Bulletin 2020-1
- The DOL Wage and Hour Division will not bring enforcement actions against employers for violations occurring between March 18 and April 17, 2020, provided that the employer has made “reasonable, good faith efforts to comply with the [FFCRA].”
- An employer acts “reasonably” and in “good faith” when all of the following facts are present:
- The employer remedies any violations, including by making all affected employees whole as soon as practicable;
- The violations of the Act were not “willful” based on the criteria set forth in McLaughlin v. Richland Shoe, 486 U.S. 128, 133 (1988) (the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited…”); and
- The Department receives a written commitment from the employer to comply with the Act in the future.
Importantly, footnote 3 to the first sub-bullet, above, explains how employers with insufficient cash flow can delay making payments for EMFLEA and EPSLA paid leave:
“For purposes of this non-enforcement policy, employers who are eligible for tax credits but who have insufficient cash flow should make payment of sick leave or family leave wages as soon as possible, but not later than seven 7 calendar days after the employer has withdrawn an amount equal to the required paid sick leave and expanded family and medical leave wages from the employer’s Federal payroll tax deposits or, to the extent such deposits are not sufficient, has received a refund of the credit amount from the IRS to cover the required wages.”
Although the footnote lacks detail, it should be a welcome relief to employers who continue to operate but are short on cash because of the devastating economic impact caused by COVID-19.
As noted above, the DOL has yet to issue regulations implementing the EFMLEA and EPSLA. Employers desperately need the regulations to develop their policies and communicate to their employees.
Ulmer’s Employment & Labor Practice Group is closely monitoring developments related to the EFMLEA and EPSLA, and expects the DOL to publish the regulations prior to the April 1 implementation date. Please reach out to our attorneys if you have any questions.