By Bello Welsh LLP
The Department of Labor’s Wage and Hour Division has issued materials providing guidance (the “DOL Guidance”) on the Families First Coronavirus Response Act (“FFCRA”). These materials, which include Q&A documents and fact sheets for employers and employees, can be found here. The same page also includes links to the notices that employers must post. For a detailed summary of the paid sick leave and Emergency FMLA provisions of the FFCRA, please refer to our earlier alert, available here.
First, some context. The FFCRA creates a new two week paid sick leave entitlement for employees who need time off for one of six reasons delineated in the statute (which are described in detail in our earlier alert). This paid sick leave is available to all employees of employers covered by the law (fewer than 500 employees, unless exempted), regardless of tenure. In addition, the FFCRA modifies the Family and Medical Leave Act (“FMLA”) by creating a new Emergency FMLA leave (“E-FMLA”). This leave, in contrast, is available only to employees who have worked for at least 30 days and who are unable to work (or telework) in order to care for a child who is under 18 because the child’s school or place of care is closed or the child’s childcare provider is unavailable due to the public health emergency.
Following are the key issues addressed by the DOL guidance:
- The FFCRA states that it will go into effect no later than 15 days after the date of enactment, i.e., by April 2, 2020. The DOL guidance provides that the effective date will be April 1, 2020. Accordingly, employers should be prepared to comply with the FFCRA by April 1, 2020.
- The paid sick leave and E-FMLA provisions of the FFCRA apply to employers with fewer than 500 employees. The DOL guidance clarifies that only employees within the United States are counted for purposes of the 500-employee threshold. Employees on leave and temporary employees are included, even if those temporary employees are jointly employed with another employer (and regardless of whether they are on the other employer’s payroll) or are supplied by a temporary agency. However, independent contractors are not included. This is the same standard as normally applies under the FMLA.
- Employers that voluntarily give employees paid leave for one of the reasons enumerated in the paid sick leave portion of the FFCRA before it goes into effect must still provide the full amount of paid sick leave available under the new law as of April 1, 2020. In other words, an employer will not be able to deny an employee paid sick leave under FFCRA because the employee was given leave for the same reason before the law became effective. This indicates that employers will not be able to take a tax credit for paid leave provided before April 1, 2020. It is our hope and expectation that this will be definitively covered in the joint DOL/IRS guidance expected out this week.
- The DOL guidance discusses how hours of leave are to be calculated for part-time employees for purposes of paid sick leave or the paid portion of E- FMLA leave. Ordinarily, hours of leave are calculated based on the number of hours the employee is normally scheduled to work. The statutory text appears to make a distinction between the part-time employee calculation for sick time—which is based on an average over a 2-week period—and the calculation for E-FMLA purposes—where if the normal hours scheduled are unknown, or if a part-time employee’s schedule varies, the employer can use a six-month average to calculate the employee’s average daily hours (or if employment has lasted less than six months, then the number of hours that were agreed upon at hire). The guidance appears to apply the same calculations regardless of the type of leave, and adds that if there was no agreement as to hours at the time of hire, the employer may use the average hours per day the part-time employee was scheduled to work over the entire term of his or her employment.
- The E-FMLA provisions of the FFCRA provide for up to 10 weeks of paid leave for employees after an initial 2-week unpaid period. The DOL guidance confirms that overtime hours must be included for purposes of calculating an employee’s amount of pay during E-FMLA leave if the employee normally would have been scheduled to work overtime. However, these overtime hours do not need to be paid at a premium rate. Note that paid sick leave under the FFCRA is capped at 80 hours over a two-week period, and that pay under both provisions is subject to daily and aggregate monetary caps.
The DOL is expected to promulgate regulations under the FFCRA in April 2020. Among other things, these regulations will address the small business exemption available for businesses with fewer than 50 employees whose viability will be jeopardized by providing the required paid leave. We will provide an update when the regulations are issued.