DOL Publishes New FFCRA Guidance; Regulations Still Pending
As we await regulations from the Department of Labor (DOL) related to the Families First Coronavirus Response Act (FFCRA), the DOL has issued several guidance documents related to employer and employee responsibilities under the FFCRA. These guidance documents provide employers with initial assistance in interpreting the FFCRA’s more ambiguous sections. We caution, however, that these guidance documents are merely that—guidance—and not the formal implementing regulations which we expect in the coming days.
Families First Coronavirus Response Act: “Questions and Answers” Guidance
The DOL’s “Families First Coronavirus Response Act: Questions and Answers” guidance document provides employers and employees with FFCRA insight in a helpful “question and answer” format. The following summarizes a few of the more noteworthy responses:
- Effective Date
The effective date of the FFCRA will be April 1, 2020.
- 500-Employee Threshold—Who Do You Count?
The DOL states that a private employer will be considered to have fewer than 500 employees if, at the time the employee’s leave is to be taken, the employer employs fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States.
In making this determination, employers should include employees on leave; temporary employees who are jointly employed by the employer and another employer (regardless of whether the jointly-employed employees are maintained on only the employer’s or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether the employer is the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA) are not considered employees for purposes of the 500-employee threshold.
- Corporations/Affiliates/Divisions—Are They Considered Together?
The DOL states that a corporation (including its separate establishments or divisions) is considered to be a single employer, and its employees must each be counted towards the 500-employee threshold.
Where a corporation has an ownership interest in another corporation, the two corporations are considered separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act, and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.
Additionally, the DOL clarifies that for purposes of the Expanded FMLA, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.
- Possible Exemption from Child Care-Related Paid Sick Leave/Expanded FMLA
The FFCRA states that the Secretary of Labor may exempt employers with fewer than 50 employees from the child care-related paid sick leave and the child care-related Expanded FMLA obligations “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” The DOL’s guidance states that small employers can “elect” this “small business exemption,” and that they should document why the business meets specific criteria to be set forth in the forthcoming regulations.
The DOL also emphasizes that employers should not send any materials to the DOL when seeking the exemption. It is unclear whether the DOL will not require the employer to provide such proof, or if they merely do not want submissions before the regulations come out.
In the end, while this section provides smaller employers with hope that the Secretary of Labor will move forward with the exemption, the details of who would specifically qualify remain unknown. And so we wait…
- Calculating Hours Worked for Part-Time Employees
According to the guidance, a part-time employee is entitled to leave for his/her average number of work hours in a two-week period. Therefore, an employer should calculate hours of leave based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, employers may use a six-month average to calculate the average daily hours. Such a part-time employee may take paid sick leave for this number of hours per day for up to a two-week period, and may take Expanded FMLA for the same number of hours per day up to ten weeks after that.
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 agreed upon by the employer and employee at the time of hire. And if there is no such agreement, employers may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his/her employment.
- Does Pay Include Scheduled Overtime?
The DOL clarifies that the Expanded FMLA requires employers to pay an employee for hours the employee would have been normally scheduled to work, even if that is more than 40 hours in a week.
However, the Emergency Paid Sick Leave Act requires that paid sick leave be paid only up to 80 hours over a two-week period. For example, an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week. In any event, the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80.
Pay does not need to include a premium for overtime hours under either the Emergency Paid Sick Leave Act or the Expanded FMLA.
- Regular Rate
For purposes of the FFCRA, the regular rate of pay used to calculate paid leave is the average of the employee’s regular rate over a period of up to six months prior to date on which the employee takes leave. If an employee has not worked for the current employer for six months, the regular rate used to calculate the employee’s paid leave is the average of his/her regular rate of pay for each week he/she has worked for the current employer.
Commissions, tips, or piece rates, must be incorporated into the above calculation.
Employers may also compute this amount for each employee by adding all compensation that is part of the regular rate over the above period and divide that sum by all hours actually worked in the same period.
The DOL clarified that the paid sick leave and Expanded FMLA requirements are not retroactive.
- Expanded FMLA—Eligible Employees and 30 Calendar Days
According to the guidance, an employee is considered to have been employed by the employer for at least 30 calendar days if the employee was on the payroll for the 30 calendar days immediately prior to the day leave would begin. For example, if an employee wants to take leave on April 1, 2020, he/she would need to have been on the employer’s payroll as of March 2, 2020.
The guidance further suggests that if an employee has been working for the employer as a temporary employee, and then the employer hires him/her on a full-time basis, the days worked as a temporary employee count toward the 30-day eligibility period.
DOL Summaries—Employee Paid Leave Rights/Employer Paid Leave Obligations
The DOL also issued separate summaries for employees and employers regarding the FFCRA—the “Families First Coronavirus Response Act: Employee Paid Leave Rights” for employees, and the “Families First Coronavirus Response Act: Employer Paid Leave Requirements” for employers. In both documents, the DOL characterizes the Expanded FMLA provision to apply when there is a “bona fide need” for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.” The paid sick leave summaries in these documents, on the other hand, do not include the “bona fide need” language, and neither does either provision in the FFCRA. We suspect that the addition of such language is intended to narrow who can take the leave. In other words, the mere fact children are at home would not automatically qualify for the Expanded FMLA; rather, the employee must be needed to care for them. We will monitor to see if the regulations include such language, and whether it is also used for the paid sick leave entitlement.
We note further that the summaries add the phrase “bona fide need to care” to the right to take paid sick leave to care for “an individual subject to quarantine” (pursuant to Federal, State, or local government order or advice of a health care provider). Such language is not included in the FFCRA. Again, we see this as an indication that the DOL will further narrow this area in the regulations.
We also noticed an inconsistency between the FFCRA’s language and the language used in these DOL summaries. Specifically, when referencing care for a child due to school closures for Expanded FMLA, the FFCRA specifies that the “son or daughter” requiring care must be under the age of 18. On the other hand, the FFCRA’s Emergency Paid Sick Leave Act allows for the leave to care “for a son or daughter,” without the age limitation. The paid sick leave provision later references the definition of “son or daughter” from the FMLA regulations, which defines “son or daughter” as individuals under the age of 18 and individuals over the age of 18 who are “incapable of self-care because of a mental or physical disability.” In other words, it appears that Expanded FMLA may only be taken if the child is under 18, but paid sick leave may be taken if the child is over 18 and incapable of self-care.
While this certainly reflects an internal inconsistency between the FFCRA’s paid sick leave and Expanded FMLA components, we note that the DOL’s summaries are also inconsistent in this same respect, but in reverse—the paid sick leave specifies son or daughter under 18, and the FMLA does not.
To be clear, these comments are not intended to “pile on” to the DOL who is certainly scrambling to provide assistance to employers and employees in this crisis, but it highlights the importance of treating these summaries as guidance only, and not rule of law, as we await regulations.
Field Assistance Bulletin
The DOL also published a Field Assistance Bulletin dated March 24, 2020, in which it directs Wage and Hour Division field staff to not bring enforcement actions against FFCRA-covered employers for violations occurring within 30 days of the FFCRA’s enactment (i.e., March 18, 2020-April 17, 2020). This 30-day non-enforcement order is only applicable if the employer has made reasonable, good faith efforts to comply with the Act. For purposes of this non-enforcement position, an employer who is found to have violated the FFCRA 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. As explained in a Joint Statement by the Department, the Treasury Department and the Internal Revenue Service (IRS) issued on March 20, 2020, this program is designed to ensure that all covered employers have access to sufficient resources to pay required sick leave and family leave wages.
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.
- 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…”).
- The Department receives a written commitment from the employer to comply with the Act in the future.
If the employer fails to meet any of these conditions, and fails to remedy any violation upon notification by the DOL, the DOL shall have the right to exercise its enforcement authority.
While such non-enforcement is intended to help employers come into compliance with the new FFCRA rules, the DOL intends to fully enforce the obligations following the conclusion of the 30-day non-enforcement period.
Finally, the DOL has issued its FFCRA Paid Sick Leave poster, available here. https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
Each covered employer must post the notice in a conspicuous place on its premises. Considering many employees are teleworking, an employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting the notice on an internal or external informational employee website.
Employers do not have to post the notice in other languages, although the DOL is working on translations for other languages in the event the employer needs them.
The notice does not have to be provided to recently laid-off individuals, or new job applicants; however, new hires must get the notice by either email, direct mail, or posting on the premises or internal/external website.
We will continue to monitor developments as they occur.