New Batch of Guidance on FFCRA From The Department of Labor

In our prior e-mail regarding the Families First Coronavirus Response Act (FFCRA), we summarized the new federal legislation extending leave benefits to employees affected by the spread of COVID-19 and stated that further guidance to employers would be forthcoming from the Department of Labor.

On March 26, 2020, the Department of Labor provided guidance on the new legislation, including a comprehensive Q&A (directly below), and an enforcement memo that lays out criteria for granting amnesty to businesses that wrongly deny workers time off in the first weeks after the statute takes effect (see further below).

New Questions & Answers From The Department

The Department of Labor issued answers to some frequently asked questions that bring clarity to certain areas of the new law. We have summarized the new guidance below:

When Will the Law Become Effective? 

• The DOL has identified April 1, 2020, as the effective date of the FFCRA. This is one day ahead of the 15-day deadline set forth in the statute. As of April 1, 2020, employers that extend benefits under the statute to their employees may claim a 100 percent payroll tax credit on those amounts.
• No tax credit is available for paid leave extended prior to that date.

As An Employer, How Do I Know If My Business Is Under The 500-Employee Threshold And Therefore Must Provide Paid Sick Leave Or Expanded Family And Medical Leave?

• If at the time the employee’s leave is taken, the employer employs fewer than 500 full-time and part-time employees within the United States (including all states, the District of Columbia, and any territory or possession of the United States), it is covered by the FFCRA.
• The following employees should be counted:
  • Employees on leave;
  • Temporary employees jointly employed by the employer and another employer (regardless of which employer maintains the employees on payroll); and
  • Day laborers supplied by a temporary employment agency (regardless of whether the employer is the agency employer or hiring employer).
• Independent contractors under the Fair Labor Standards Act (FLSA) are NOTconsidered employees for the purposes of this calculation.
• Separately incorporated business entities are presumed not to be joint or integrated employers. However:
  • If two entities are joint employers under the FLSA, then all common employees may be counted for the purposes of determining coverage 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. (See existing DOL Fact Sheet Regarding Joint Employers: https://www.dol.gov/agencies/whd/flsa/2020-joint-employment/fact-sheet.)
  • If two or more entities meet the integrated employer test under the FMLA of 1993 (29 CFR 825.104(c)), then employees of all entities may be counted in determining coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act. (See existing DOL guidance regarding the integrated employer test under the FMLA: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/FOH_Ch39.pdf.)

If Providing Child Care-Related Paid Sick Leave And Expanded Family And Medical Leave At My Business With Fewer Than 50 Employees Would Jeopardize The Viability Of My Business As A Going Concern, How Do I Take Advantage Of The Small Business Exemption?

• Small employers should internally document why their business meets the criteria set forth by the DOL, which will be provided in future regulations. There is no need to send any materials to the DOL to seek this exemption.

How Does An Employer Calculate An Employee’s Regular Rate Of Pay For The Purposes Of FFCRA?

• For purposes of the FFCRA, the regular rate of pay used to calculate your paid leave is the average of an employee’s regular rate over a period of up to six months prior to the date on which an employee takes leave. If an employee has worked for less than six months, the regular rate used to calculate paid leave is the average of the employee’s regular rate of pay for each week the employee worked.
• Importantly, commissions, tips, or piece rates, should be incorporated into the calculation.

Can An Employee Take 80 Hours Of Emergency Paid Sick Leave For Purposes Of Self-Quarantine And Also Take Additional Emergency Paid Sick Leave For Another Reason?

• No. An employee may take Emergency Paid Sick Leave for up to two full weeks (10 days) only (capped at 80 hours for full-time employees). 

Is An Employee Entitled To Both Emergency Paid Sick Leave And Expanded Family And Medical Leave If The Employee Needs To Care For A Child When The Child’s School Or Place Of Care Has Closed?

• Yes. But the combined paid leave may not exceed 12 weeks. The 10 days provided under Emergency Paid Sick Leave Act will cover the first 10 workdays of the expanded family and medical leave, which are normally unpaid (unless the employee simultaneously uses leave available under an employer policy).
• After the first 10 workdays have elapsed, the employee is eligible to receive two-thirds of regular rate of pay for the hours he or she would have been scheduled to work in the subsequent 10 weeks under the Emergency Family Medical Leave Expansion Act.

Can An Employer Deny Employee Paid Sick Leave If The Employer Gave Employee Paid Leave For A Reason Identified In The Emergency Paid Sick Leave Act Prior To The Act Going Into Effect?

• No. The Emergency Paid Sick Leave Act imposes a new leave requirement on employers that is effective beginning on April 1, 2020.

Is All Leave Under FMLA Now Paid Leave?

• No. The only type of family and medical leave that is paid leave is expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act when such leave exceeds ten days. This includes only leave taken because the employee must care for a child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons.

Are Paid Sick Leave And Expanded Family And Medical Leave Requirements Retroactive?

• No.

If An Employer Closed My Worksite Before April 1, 2020 (The Effective Date Of The FFCRA), Can An Employee Still Get Paid Sick Leave Or Expanded Family And Medical Leave?  

• No. If, prior to the FFCRA’s effective date, an employer sent an employee home and stops paying employee because it does not have work for an employee to do, the employee will not get paid sick leave or expanded family and medical leave, but the employee may be eligible for unemployment insurance benefits. This is true whether the employer closes its worksite for lack of business or because it is required to close pursuant to a Federal, State, or local directive.

• It should be noted, however, that if the employer is paying employee pursuant to a paid leave policy or State or local requirements, the employee is not eligible for unemployment insurance.

If An Employer Closes Its Worksite On Or After April 1, 2020 (The Effective Date Of The FFCRA), But Before An Employee Goes Out On Leave, Can The Employee Still Get Paid Sick Leave And/Or Expanded Family And Medical Leave?

• No. If the employer closes after the FFCRA’s effective date (even if employee requested leave prior to the closure), the employee will not get paid sick leave or expanded family and medical leave, but may be eligible for unemployment insurance benefits. This is true whether an employer closes the worksite for lack of business or because it was required to close pursuant to a Federal, State or local directive.

The Rest of the DOL Questions & Answers can be found here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions.

Amnesty To Business

In a memo issued by the DOL, the Department stated it will not bring enforcement actions against any public or private employer for violations of the Act occurring within 30 days of the enactment of the FFCRA, i.e. March 18 through April 17, 2020, provided that 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:

1. 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.
2. 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…”).
3. The Department receives a written commitment from the employer to comply with the Act in the future.

If the public or private employer either (i) violates the Act willfully, (ii) fails to provide a written commitment to future compliance with the Act, or (iii) fails to remedy the violation upon notification by Department, the employee seeking payment, or a representative of that employee, including by making all affected employees whole as soon as practicable, the Department reserves its right to exercise its enforcement authority.

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We anticipate further guidance to be provided and will continue to keep you updated accordingly.

Landegger Baron Law Group is available to help you understand and assess the legal implications of COVID-19 for your business and your employees.

By: Kristina Kourasis, Esq.