COVID-19 Challenges: More Q&As for Employers – Department of Labor Regulations on Paid Leaves under the FFCRA

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By Bello Welsh LLP

The Families First Coronavirus Response Act (FFCRA) requires employers with fewer than 500 employees[1] to provide (1) up to 80 hours of paid sick leave to any employee who is unable to work for any of six enumerated reasons, and (2) up to twelve weeks of leave (of which ten weeks are paid) to any employee who has been employed for at least 30 days, in order for the employee to care for a child whose school or daycare has closed or whose childcare provider is unavailable.[2]  Our prior client alert provides a detailed overview of the fundamental requirements of the Emergency Paid Sick Leave Act (EPSLA) and expanded FMLA (E-FMLA) leave entitlements.  In recent days, the United States Department of Labor (DOL) has issued regulations and expanded its Q&A’s to provide additional clarification regarding several aspects of how the leaves are to be administered.  Following up on our prior set of Q&As, this document addresses some of the questions that employers may be facing as they create processes and policies to comply with the new laws.

Question 24:      Are there constraints on the qualifying reasons for leave pursuant to the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act? 

Answer 24:         Yes.  The DOL regulations provide detailed descriptions of the circumstances under which leave may be taken, which are important for employers to understand when evaluating leave requests.  For example, the regulations provide that an employee may take leave only if the employer has work for the employee, and the employee would be able to perform work (either at the normal workplace or by telework) but for the reason for leave.  Additional clarifications include the following:

Emergency Paid Sick Leave Act (EPSLA):  Paid sick leave may be taken for one of six qualifying reasons.

  1. The employee is subject to a government-issued “quarantine or isolation order” related to COVID-19. This includes quarantine, isolation, containment, shelter in place, or stay at home orders issued by any government authority that causes the employee to be unable to work, as well as a government advisory that categories of citizens, such as those of certain age ranges or with certain medical conditions, should shelter in place, stay at home, isolate, or quarantine.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. This encompasses a health care provider’s advising an employee to self-quarantine not only because the provider believes the employee has or may have COVID-19, but also where the provider believes the employee is “particularly vulnerable” to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis from a health care provider. The relevant symptoms include fever, dry cough, shortness of breath, or any other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention.
  • Importantly, leave taken for this reason is limited to time the employee is unable to work because the employee is taking “affirmative steps” to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.  Thus, while an employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis, the employee need not actually have received a diagnosis to be eligible for time off for this reason if, for example, the time is needed to try to get tested, or if the employee is continuing to experience symptoms while awaiting results and is unable to telework while the employer has work for the employee.  (In addition, if the employee exhibits COVID-19 symptoms, and seeks medical advice, but is told they do not meet the criteria for testing and is instead advised to self-quarantine, the employee may be eligible for leave under the second reason for EPSLA leave, described above, provided the employee meets all the requirements spelled out above.)
  1. The employee is caring for an individual who is subject to a government quarantine or isolation order related to COVID-19, or an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. While the use of the term “individual” in the statute could be interpreted as effectively limitless, the regulations clarify that the term refers to an immediate family member, a person who regularly resides in the employee’s home, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she were quarantined or self-quarantined. The leave also is not available if the individual in fact does not depend on the care.
  2. The employee is caring for his or her son or daughter[3] whose school or place of care has been closed for a period of time, or the child care provider is unavailable, for reasons related to COVID-19. An employee may take leave for this purpose only if no other suitable person (such as a co-parent, co-guardian, or the usual child care provider) is available to care for the son or daughter during the period of such leave.
  • The definitions here are intentionally broad. For example, “place of care” includes not only daycares, but also before and after school care programs, summer camps, and respite care programs, among others, while a “child care provider” includes any individuals who provide childcare on a regular basis, whether paid or unpaid, licensed or unlicensed, including babysitters, extended family and neighbors. In addition, a school or place of care is considered “closed” if the physical location is closed, even if the school or place of care has moved to online or similar instruction models.
  • The regulations do not specify how an employer would determine whether another suitable person is “available,” but presumably employers may inquire and accept the employee’s response.  In an apparent discrepancy, the regulations relating to required documentation require that in seeking such leave, the employee must represent that no other suitable person “will be caring” for the child.  Employers may wish to include both phrases in any documents used by employees to request leave.
  • As we discussed in our initial client alert regarding these regulations, employees must provide certain specific information regarding the child and the school or care provider at issue.  While, as noted above, an employee may qualify for leave only if another suitable individual is not “available,” the employer is required to obtain and maintain a record of the employee’s representation that no other suitable individual “will be caring” for the child.  In addition, the IRS guidance on documentation required for the associated tax credit provides that, as to children over the age of 14 where time off is sought during daylight hours, the employee must provide a statement that special circumstances exist requiring the employee to provide care. The regulations do not provide guidance on how employers are to determine whether someone else is “available” or “caring” or what “special circumstances” may be or to what extent they must be described or verified.  At a minimum, it is recommended that these items be included in any paid sick leave request form.
  1. The employee has a “substantially similar condition,” as specified by the Secretary of Health and Human Services (HHS). To date, HHS has not identified any “substantially similar condition” that would allow an employee to take leave for this purpose.

Emergency Family and Medical Leave Expansion Act (E-FMLA)

As discussed in our prior client alert, the E-FMLA provides that an employee may use E-FMLA leave if the employee is unable to work or telework due to a need to care for the employee’s son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons.  The requirements for taking leave for this purpose are the same as the requirements for taking such leave pursuant to the EPSLA.

Question 25:      Can a small business seek a hardship exemption from the EPSLA and E-FMLA, and if so, what is the process for doing so?

Answer 25:         Yes, but the exemption is limited, and available only to employers with fewer than 50 employees, if providing leave to employees to care for a son or daughter whose school or place of care is closed or unavailable would jeopardize the viability of the business as a going concern.  There is no such exemption from the need to provide EPSLA leave for reasons 1-4 or 6 (described above).  To be eligible for this exemption, an authorized officer of the small business must have determined that one of the following conditions exists (and must document that determination and retain the documentation):

  • the leave would result in the small business’s financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
  • the absence of the employee(s) requesting such leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
  • 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 work of the employee(s) requesting leave, and such work is needed for the small business to operate at a minimal capacity.

Employers should carefully consider whether a leave request would in fact result in one of these narrow circumstances occurring. For example, a request by a junior level employee for intermittent E-FMLA one day per week is unlikely to preclude the business from operating at minimal capacity or create a substantial risk to its finances or operations, even in a relatively small business.  (See also our Q&A for Employers #22, discussing intermittent leave.)

Question 26:      How does an employer determine if it has fewer than 500 employees, for purposes of coverage under the EPSLA and E-FMLA?

Answer 26:         Employers must count all full-time and part-time employees employed within the U.S. (including the District of Columbia and all U.S. territories and possessions), measured at the time the employee would take leave. This includes all current employees regardless of tenure, employees on leave of any kind, employees of temporary placement agencies who are jointly employed by the employer and another employer, and day laborers supplied by a temporary placement agency.

Of note, an employer that implements a “furlough” under the FFCRA may still be obligated to count those employees for purposes of determining employer coverage if the terms of the job action make it more akin an unpaid leave than a to a layoff.  However, such furloughed employees would not be entitled to take EPSLA or E-FMLA leave for any time when no work is available to them (e.g. during the furlough).

A corporation is typically considered a single employer, and all of its employees within the U.S. should be counted together regardless of their location. Two or more entities are generally separate employers, unless they meet the joint employer test under the FLSA or the integrated employer test under the FMLA, in which case, the employees of all entities making up the joint or integrated employer must be counted.

Question 27:      The EPSLA and E-FMLA provisions of the FFCRA apply to employers with fewer than 500 employees.  What date is used for purposes of determining the 500-employee threshold?

Answer 27:         The temporary regulations provide that the 500-employee threshold is determined as of the date an employee needs to take leave.  Therefore, if an employer that currently has more than 500 employees goes below the 500-employee threshold while the FFCRA is in effect (through December 31, 2020), for example as a result of layoffs due to the COVID-19 pandemic, the employer will be subject to the FFCRA as of the date its headcount falls below 500.

For example, if an employer has 525 employees on April 30, 2020, and one of its employees is unable to work starting on that date because s/he has been advised by a health care provider to self-quarantine due to COVID-19 concerns, the employer will not be required to provide paid leave under the FFCRA to that employee.  If, however, the employer lays off 25 employees on May 1, 2020 and another 25 employees on June 30, 2020, the employer will be required to provide paid leave to another employee who is unable to work for the same reason starting on July 1, 2020.  Under current DOL guidance, an employer that drops below the 500-employee threshold would not be required to provide leave retroactively to an employee who did not qualify at the time leave would have started but whose leave, if available, would have been in effect on the date the employer begins to be subject to the FFCRA.  Conversely, an employee who qualifies for and goes out on leave is entitled to the full amount of leave even if the employer’s employee headcount goes above the threshold during the leave.

Question 28:      Do the usual FMLA job restoration regulations, including the exception for employers that are able to demonstrate that an employee would not otherwise have been employed at the time s/he requests reinstatement, apply to employees who take E-FMLA leave under the FFCRA?

Answer 28:         Yes.  Employers subject to the E-FMLA are also subject to the usual FMLA job restoration obligation, and therefore must restore any employee who has taken E-FMLA leave to the same or equivalent position at the end of the leave.  The temporary regulations track the existing FMLA regulations by providing that the FFCRA does not protect an employee from employment actions, such as layoffs, that would have affected the employee regardless of whether leave was taken.  The employer also has the same burden to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration to employment.

As to employers with fewer than 25 employees, the FFCRA includes an additional exception to the job restoration obligation, which appears to impose a greater obligation on small businesses.  As per the FFCRA, such small employers are excluded from the job restoration obligation if the position no longer exists when an employee seeks to return from E-FMLA leave because of an economic downturn or other conditions caused by a public health emergency (i.e., due to COVID-19 related reasons), although the employer must attempt to contact the employee if an equivalent position becomes available in the next year.

Question 29:      Do the 80 hours / 2 weeks of paid sick leave available under the EPSLA for caring for a child whose school or childcare is closed or unavailable due to COVID-19 cover the first 10 days of unpaid leave under the E-FMLA?

Answer 29:         Yes, if the employee has not previously used EPSL for other reasons, the first two weeks of E-FMLA may be paid as EPSL (up to 80 hours), regardless of whether this is more or less than 10 workdays for the employee in question.  Of note, however, the pay available through EPSL is capped at 80 hours, regardless of the employee’s regular hours of work in an average workweek, whereas the pay available through E-FMLA for the remaining 10 weeks does not have an hours cap.  Therefore, full-time employees who regularly work more than 80 hours in a two-week period will not recover pay for their full hours of work through EPSL, but their full hours of work must be taken into account when determining E-FMLA pay.

Question 30:      Can an employee take EPSLA or E-FMLA leave for periods of time that work is not available to that employee, for example if the employee’s hours have been reduced or if the employee’s place of work has temporarily closed due to COVID-19 related government orders?

Answer 30:         No.  EPSLA and E-FMLA leaves are only available when the employer has work for the employee, which the employee is unable to perform due to a qualifying reason.  For example, an employee whose hours of work were reduced by the employer from 5 days to 3 days per week because of a COVID-19 related business downturn may not take either EPSLA or E-FMLA leave to cover the 2 days the employee is no longer scheduled to work, and an employee whose workplace has closed (and who cannot work from home) also may not take EPSLA or E-FMLA leave for any reason.

Question 31:      If a new hire took EPSLA or E-FMLA leave with their prior employer, do they get the full amount of leave entitlement at my company? 

Answer 31:         No.  Each individual is only eligible for 2 weeks of EPSLA leave and 12 weeks of E-FMLA leave total between April 1, 2020 and December 31, 2020, regardless of where they are employed at the time they take leave.  This also suggests that the non-retaliation provisions apply regardless of whether the individual took leave at a prior employer.  Because employers may only receive tax credits for payments made pursuant to the FFCRA, employers should consider inquiring about prior EPSLA and E-FMLA leave use on any employee leave request form to avoid paying out leave for which the employer will not be reimbursed.

Question 32:      How do we calculate EPSL or E-FMLA pay to an employee who regularly works overtime?  What if the employee works some shifts for which the employee is paid a shift differential?

Answer 32:         For pay under both the EPSLA and E-FMLA, the employer must determine the employee’s “average regular rate.”  First, the “regular rate” is determined by taking the employee’s pay over a six-month period, excluding the amounts specified in Section 7(e) of the Fair Labor Standards Act, such as gifts, vacation or holiday pay, expense reimbursements, discretionary bonuses, and premium pay for overtime (that is, the additional 0.5x of pay).  Second, the “average regular rate” is determined by taking a weighted average based on the number of hours worked over the 6-month period (or, if the employee has not been employed for 6 months, then over the entire term of employment).  That rate is then used to calculate pay during leave covered by the EPSLA and the E-FMLA.

In the case of an employee who is paid based solely on a single hourly rate, the average regular rate for purposes of the EPSLA and E-FMLA is simply the employee’s usual hourly pay rate.  This is so regardless of whether the employee regularly works and is paid overtime because overtime premiums are not included in the calculation of the average regular rate.

In the case of an hourly employee who is sometimes paid a shift differential, the average regular rate must include not just the usual hourly rate, but also the shift differential.  Accordingly, the regular rate is determined by taking the employee’s total pay (including shift differentials paid but not including the premium portion of overtime pay or other excluded amounts) and dividing this by the total hours of work (including overtime hours).  This results in a (weighted) average regular rate, and it is this rate that is used to calculate pay during paid time off, rather than, for example, the rate that would apply to the hours or shift for which the employee takes leave.

[1] In addition, public employers are subject to the FFCRA regardless of size, as follows: the sick leave provisions apply to the federal government, federal agencies, and state and local governments, while the extended family leave provisions apply to non-federal public agencies, and federal employees covered by Title I or Title II of the FMLA.

[2] An employer of a health care provider or emergency responder may elect to exclude such employee from these leave provisions.

[3] The term “son or daughter” includes the employee’s own biological, adopted, or foster child, stepchild, legal ward, or child for whom the employee is standing in loco parentis (i.e., someone with day-to-day responsibilities to care for and financially support the child), under the age of 18. The term also includes an adult son or daughter who is incapable of self-care because of a mental or physical disability.